Common use of Example 3 Clause in Contracts

Example 3. In this example the fixed term tenancy is for 3 years and the rent is agreed at £650.00 per month for the first year with a CPI linked rent review provision. The tenancy commences on 1 April 2020. The first review date is, therefore, 1 April 2021. The landlord must give notice of the review at least 28 days, but no more than 90 days before 1 April. If the landlord serves the notice on the tenant on, say, 1 March the relevant CPI data would be the data for the year ending January 2020 (as this will be the latest available data). In this example we assume this is 1.8% and that the landlord chooses to increase the rent by the full amount. The following year (year 3) the landlord again decides to serve a rent review notice on the tenant on 1 March and to charge the full increase. The latest available CPI data will be for the year to January 2022 and for the purposes of this example we will assume the percentage change over the 12 months to January 2022 is 1.6%. In this example, the rent payable each year will be (rounded to the nearest xxxxx): Year 1 (from 1 April 2020) Year 2 (from 1 April 2021) Year 3 (from 1 April 2022) £650 per month £650 x 1.018 = £661.70 per month £661.70 x 1.016 = £672.23 per month