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The laws relating to rent increases vary and will depend on the type of tenancy:
In a periodic tenancy (no pre-determined finish date) rent may not be increased within the first six months of the tenancy. After that, increases can occur at six-monthly intervals (but no sooner) and tenant/s must be given at least 60 days notice in writing, with details of the amount of the rise and the day it will take effect. The lessor must use Form 10 or Form 11 available from the notices page. You only have to pay the increase if proper notice has been given.
In a fixed-term tenancy (specific start and finish dates) the agreement will not automatically terminate on the end date unless either the tenant or the lessor gives 30 days’ notice of intention not to renew the agreement. If less than 30 days notice is given before the fixed term expires, the day the tenant needs to move out is extended so 30 days notice is given.
The lessor must use the notice of termination (Form 1C, option 5) and tenants can write a letter or use the notice of termination from tenant to lessor (Form 22) both available from the notices page.
Rent in a fixed-term tenancy can only be increased if the written agreement specifies how much the rent increase will be or the method of calculating the rent increase is shown (eg by CPI). If the rent is able to be increased, it can take effect no sooner than six months after the commencement of the tenancy agreement and the date of the last increase. The lessor must give at least 60 days’ notice of the increase.
Increasing the rent at the end of a fixed term tenancy agreement
If it is agreed that the tenant/s will keep renting the same property at the end of the fixed term tenancy agreement and the lessor wants to increase the rent, the rent cannot increase for the first 30 days of the new agreement.
Note: If the rent is calculated by reference to the tenant/s income (eg the tenant/s employer provides the rental premises and the rent is set as a percentage of the tenant/s income), a notice of rent increase is only required if the method of calculating the rent is changed.
Excessive rent – paying too much?
The amount of rent charged at the start of a new tenancy is generally controlled by market forces, but if the tenant/s believe the rent is too high they can apply to the Magistrates Court requesting a reduction, or to argue against a proposed increase.
The court will consider a range of things, including:
- if the rent remains comparable with other properties in the area;
- the estimated value of the premises;
- the cost of upkeep of the property paid by the lessor;
- the cost of services provided by the lessor (or tenant);
- the value of the contents provided by the lessor for the tenants use;
- the state of repair and general condition of the property; and
- any other considerations (eg if the lessor is putting up the rent simply to force the tenant out).
The laws affecting rent increases changed in 2013. The rent increase frequently asked questions sheet provides more information about when and how rent can be increased.
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