Increasing the rent during a tenancy - Residential parks bulletin 20
24 November 2021
Increasing the rent during a tenancy
Consumer Protection has recently received a rise in queries about rental increases.
A park operator can increase the rent for a long-stay tenancy as long as they follow the rules about how to do so. Those rules are outlined in this bulletin.
During an on-site tenancy agreement
A long-stay tenancy agreement with specific start and expiry dates is known as a fixed-term long-stay tenancy agreement. A park operator cannot seek to increase the rent during a fixed-term tenancy unless there is a clause within the agreement that allows for an increase.
Long-stay tenancy agreements that do not have an end date are known as periodic long-stay tenancy agreements. A tenancy can either start off as a periodic agreement or occur when a fixed-term agreement expires but the tenancy does not end.
With either a fixed-term or periodic agreement, the rent can increase once every six months from either the start of the tenancy or the last rental increase, as long as the park operator provides the correct written notice to the tenant.
If the park operator reviews the rent under a review date schedule, the first rent increase can occur sooner than six months after the start of the agreement. However, the tenant must receive written notice of the set review date schedule before the long-stay agreement is made.
During a site only tenancy agreement
To increase the rent under a site-only agreement, the long-stay agreement must contain a clause that allows for a rent review. The site rent reviews can only occur once in a 12-month cycle. If the agreement states a method of rent reduction, such as being linked to a lower Consumer Price Index (CPI), then this must also be passed on for that review period.
What kind of notice does the park operator have to provide for the increase?
To lawfully cause a rent increase, the park operator needs to:
- check if the agreement allows for a rent increase or review during the tenancy;
- provide the required written notice to the tenant;
- state the amount the rent will increase to. Where the increase is based on ‘market rent’, the park operator must base the increase on a report obtained for that purpose from a licensed land valuer;
- include the date that the tenant will need to start paying the new rent. For an on-site agreement, this date must be at least 60 days after the notice is given to the tenant; and
- only seek to increase the rent once every six months after either the tenancy started or the last rent increase occurred for on-site agreements, unless the tenant was provided with written notice of the set review date schedule prior to the commencement of the tenancy.
If a tenant does not receive the correct written notice, they can lodge a complaint with Consumer Protection for assistance.
What if the tenant does not agree to the increase?
If the park operator has correctly sent the required notice to the tenant and the tenant does not agree with the increase, the tenant may choose to:
- try to negotiate with the park operator about the increase;
- end their periodic tenancy by providing at least 21 days written notice;
- not renew the fixed-term tenancy by declining the offer of a new agreement and vacating the property when the existing agreement expires; or
- apply to the State Administrative Tribunal for a decision on whether the increase is excessive under the circumstances, such as if the property is not being properly maintained.
Where a tenant is struggling to pay a rent increase the Residential Rent Relief Grant Scheme offers future rent support for eligible tenants who are struggling financially now the emergency period has ended. Applications for assistance close on 31 December 2021.
If you have any questions about rent increases, you can contact Consumer Protection’s advice line on 1300 304 054 or email, email@example.com.
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