Indexing rental properties using a model letter
The Model Letter for Indexation of Rent to Tenants is a document used by landlords to notify tenants in writing of the indexation of rent.
The indexation of rent is a legal document that establishes the new rent after the renewal of the lease. It is a legal requirement that the landlord informs the tenant in writing of the new rent.
Fact: Each year, rents can increase by 1.5% to 4%.
The model letter for indexation of rent to tenants provides a fill-in-the-blank template/model that the landlord can use to notify the tenant in writing of the indexation of rent.
Rent indexing is an important factor to consider when renting a home. There are many reasons why rent indexing is necessary. It is important for the landlord to notify the tenant in writing of the rent indexation to avoid any disputes.
Indexing the rent is done to increase the value of the property. This will ensure that the tenant pays a fair rent.
Looking for a model letter for indexing rent?
What is rental indexation?
Rent indexing is a method used to measure the change in the value of real estate. In other words, rent indexing is the increase in the price of homes that occurs over time. If your home was originally purchased for €200,000 and the value has increased to €250,000, you would have a rent indexation of +10%.
On the anniversary of the entry into force of the contract, the rent may be adjusted to take into account the cost of living. Before December 1993, the fluctuations of the consumer price index formed the basis for the indexation. From January 1994, it was mandatory to use the health index.
How is rental indexation calculated?
De index van de gezondheidsprijzen kan worden gebruikt om de huur van uw appartement of huis te berekenen. Er bestaat een verplichte formule voor de toepassing van een indexering waarin de huurwet voorziet.
The health price index can be used to calculate the rent for your apartment or house. There is a mandatory formula for applying an indexation provided in the Rent Act.
The formula for calculating the indexation of rents in Belgium is as follows:
(Base rent x New index) / Start index.
When a lease is signed, the base rent is determined. No costs or charges may be taken into account in the calculation. The health index is published by the Federal Public Service Economy. The health index is published in the month in which the rent is calculated. The base index is the index of the month preceding the anniversary of the lease.
Using this handy index calculator, you can calculate the rent to be indexed for your home or apartment
When may a landlord index the rent?
The anniversary of the lease is the time when the owner must notify the tenant in writing of the indexation of the rent. The tenant has effectively occupied the leased property on this date.
If the landlord does not inform the tenant of the indexation in time, he has three months to do so. It is possible to apply the indexation retroactively to the previous three months. He can get back up to three months of his adjusted rent after this period.
Is the rent of the property automatically indexed?
The owner must request his tenant in writing to index the rent through a rent indexation letter. He can do this once a year, but not earlier than the anniversary of the entry into force of the lease, i.e. the date on which the tenant actually moved into the rental property.
Unless the lease expressly excludes the possibility of indexation, it is not necessary to include it in the lease.
What if the landlord forgot to index the rent?
A written notice from the landlord to the tenant is always necessary, as indexation is not automatic. The regulations do provide for the possibility of retroactive offsetting of indexation, but only up to the rents of the last three months preceding the written request of the rent indexation letter.
Thus, it is in your best interest to send this rent indexation letter as soon as possible after the anniversary of the signing of the lease.
Feel free to download this model letter for indexing rent.