Rent can only be increased once in any 12-month period.
ADDITIONAL TERM – RENT INCREASES DURING THE FIXED TERM
(for a fixed term of less than 2 years)
70. By completing this clause, the parties agree that the rent will be increased during the fixed term of the agreement.
Note: The rent payable under a fixed term agreement for a fixed term of less than 2 years must not be increased during the fixed term unless the agreement specifies the increased rent or the method of calculating the increase.
Note: Generally, the rent payable under a Residential Tenancy Agreement may be increased only if the tenant is given written notice by the landlord or the landlords agent specifying the increased rent and the day from which it is payable, and the notice is given at least 60 days before the increased rent is payable. This extends to an increase in the rent payable under a Residential Tenancy Agreement on renewal of the agreement as if the increase were an increase during the term of the agreement.
Tenants must receive 60 days’ notice in writing. The new rent cannot start any earlier than the start date of the existing rent. The written notice can be served 60 days prior to the anniversary date so that the new rent can begin the day after the 12-month period expires.
Is there any rule about how much the rent can be increased by?
There seems to be this idea that consumer price index and inflation determine the size of the increase. The size of the increase is determined by supply and demand. Landlords or their Agents should provide evidence to the tenant of similar properties leased in the general area.
Tenants can challenge the increase, but they also need to provide evidence showing similar properties have recently been re-let for less than the increased rent that they have been asked to pay.
Do I have to sign a new Lease?
No, but sometimes the Landlord or Agent might offer you a new lease.
Why do rents increase?
Quite often it is due to a shortage of available properties in a given area. Investors do try and maintain a certain return on the value of their investment. Also rent increases are necessary to help landlords recover some of the increases in their costs, such as:
- Fluctuating interest rates, increasing mortgage repayments
- Increase in strata levies (sinking funds) strata developments
- Increasing insurance premiums
- Increasing taxes, i.e. capital gains.
- Increasing maintenance costs, materials/labour.
Quite often the size of the increase doesn’t cover the total increases in all the above, the landlords absorb any shortfall.
In our experience, we encourage our landlords to provide a discount off the market rent for excellent long-term tenants.
It’s been suggested that a “freeze” be put on rents. For that to work it would also be necessary to freeze all the above expenses incurred by landlords.
If you would like to have a chat with Steve about this blog or any other blogs, please don’t hesitate to contact him on either of the below:
0419 947 980 or (02) 4969 2600
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