A Complete Guide to the Ins and Outs of Rental Increases
While a competitive market can make tenants cautious about making waves with their landlords, some protections in place can help tenants in the wake of rising rent costs.
If you’re a renter, this guide can help you understand your rights when it comes to rental increase laws along with the tactics landlords can employ to ensure they and their tenants remain on the same page.
Rental increase laws
Why do rental prices rise?
A major reason behind rental increases is when the number of properties for lease nationwide has drops significantly. As of 2023, ‘vacancy rate’ is currently at the lowest level in over a decade. Such economic situations will fuel competition among renters and allow landlords an opportunity to raise their rental prices.
Rental increases are often a natural consequence of economic factors such as supply and demand for rental properties in a particular area, inflation, population growth, and changes in the local housing market.
How often can landlords increase rent?
The answer to this question depends entirely on where you live and the type of lease you have.
In most states, including New South Wales and Victoria, rent cannot be raised during a fixed lease period unless it's actually specified in the lease at the outset.
Generally speaking, landlords cannot increase the rent more than once every six months or once every twelve months.
Legal rights as a tenant
What are my rights for rent increases - can I appeal?
The first step for any renter wanting to dispute a rent rise is to start a conversation with their landlord. Failing that, the next step is to appeal excessive rent via a tribunal.
Most jurisdictions have a process where you can appeal against an excessive increase, but in this case, they will only take into account the state of the rental market when finalising their decision and not individual income or the quality of the property.
Your rent cannot be increased if you are on a fixed-term agreement unless the contract states it can.
If it does, 60 days written notice must be provided. The same notice period must be given to those on a month-by-month agreement.
Victoria's laws do not restrict how much your rent can be increased, but typically it can only be hiked once every 12 months.
If you want to negotiate the rent rise with your landlord, you can do so. If you cannot reach an agreement, you can ask Consumer Affairs Victoria (CAV) to conduct a free rent assessment within 30 days of receiving the notice of their intention to increase the price.
For renters on a fixed-term agreement of fewer than two years, a rental increase can only occur if specified in your contract. In this case, the increase must be clearly stated along with an explanation of how it was calculated.
Rental increases are restricted to once every 12 months for those on agreements of two years or more, and you must be provided with at least 60 days written notice.
If you think your rent increase is unreasonable, you can try to negotiate with your landlord or apply to have the matter heard at the NSW Civil and Administrative Tribunal.
Rent cannot be hiked for those on fixed-term agreements unless specified in the tenancy agreement.
If there is a provision for an increase, it can only occur six months after the tenancy starts or since the last increase.
Two months' written notice of the increase must be provided, with reference to the increased amount and the day it takes effect.
Renters on periodic agreements must also be given 60 days written notice of an increase, which can only apply six months after the last.
If you find your rent too excessive, you may choose to apply for a free dispute resolution through the Residential Tenancies Authority.
Rent increases cannot be served to tenants on fixed-term agreements unless there is a condition that allows for it in the agreement. It will need to specify how the increase will be calculated, such as with reference to inflation.
You still need to be provided with 60 days written notice even if an increase is detailed in your agreement. One can only be imposed 12 months after the last rent increase, or 12 months after the agreement started.
For periodic agreements, the same written notice requirement as outlined above also applies.
If your rent has increased and you do not agree with it, you can apply to have the matter heard at the South Australian Civil & Administrative Tribunal.
If you are on a fixed-term tenancy agreement, a rent increase can only be applied if there is a provision in the contract that allows it. If there is, it must state the amount of the increase or detail how it would be calculated.
If a fixed-term agreement of at least 12 months has expired, an increase can be applied if eight weeks’ notice is given.
For tenants in a periodic tenancy, the rent can be increased once every 12 months.
A landlord can seek a rent increase above the prescribed amount but will have the onus to seek approval for that size of increase through the ACT Civil and Administrative Tribunal (ACAT).
Tenants seeking to challenge a rent increase can lodge an application with ACAT at least a fortnight before the start date of the proposed increase.
Rent can only be increased for tenants who are living under a written lease that provides for rent increases, or if the agreement is not in writing.
The rent increase can only proceed if the written notice rules are properly complied with, including at least 60 days' notice and an outline of the new rent amount and the start date.
Increases can only occur once every 12 months.
For tenants who believe a rent increase is unreasonably high, they can seek to have it reviewed by applying to the Residential Tenancy Commissioner.
Rent can only be increased during a tenancy if there is a provision in the agreement, which must also include the method of calculation for the increase.
An increase must come with at least 30 days written notice, and the date it starts has to be at least six months after the last increase, or at least six months after the tenancy began.
An increase can be applied during the tenancy if there is no provision, but only if you and your landlord agree.
Tenants can seek to review the rent increase if they believe it is excessive, by applying to the NT Civil and Administrative Tribunal.
Under a fixed-term residency, rent increases can only occur if stated in the agreement.
The rent increase can only take place six months after the last increase, or six months after the tenancy agreement starts. Separate written notice of at least 60 days must be provided.
For a periodic tenancy agreement, rent increases cannot occur until six months after the last increase. Separate written notice of at least 60 days must be provided as outlined above.
If you believe your rent is too high, you can contest it by applying to the local court.
What must a landlord inform me of?
Generally, landlords do not need to provide a reason for increasing the rent. However, they are required by law to follow the strict notification procedures which include written notification to the tenant, the use of related and relevant forms, and giving you advanced notice of the increase.
Minimum notice periods are usually 60 days in most states and territories (see above) and 30 days in the Northern Territory.
If your landlord does not comply with these requirements, you are not obliged to pay the higher rent.
Should you increase the rent as a landlord?
Landlords must consider whether a higher rent will be more beneficial than having tenants stay in their property for longer. Increasing the rent quite simply puts more dollars into your pocket as a landlord but it can come at the risk of losing loyal tenants who may disapprove of the increase or cannot afford it. However, If your property is in a skyrocketing rental market, it only makes sense to increase the rent to keep up with those local forces. Deciding not to do so may see you quickly fall behind the market and essentially lose out on precious money.
Is it ever wise to not increase the rent?
Sometimes increasing the rent may not be the wise choice for landlords. If you have a good tenant who always pays their rent on time and keeps the property neat, you may not want to raise the rent or increase it by too much. Doing so could lose you a reliable tenant and you may end up with someone difficult to deal with.
If you think a rental increase is justified, you should discuss it with your tenant. Ultimately, both you and your tenant should come to a middle ground when negotiating rent increases. Most tenants understand their landlords have expenses, too. If rates have gone up, you’re in a hot market, or you have improved the property, a higher rent can be justified. Open communication will ensure the best outcome for both landlord and tenant.
There is rental reprieve
It’s no surprise that rental increases are a great source of stress for many tenants and landlords nationwide. For renters, there’s a worry about keeping a roof over their heads while landlords want to ensure the best return on investment. While there’s no real easy way to navigate these challenges, tenants can gain some reassurance by knowing they have some rights concerning rental increase laws and may be justified to dispute a rental increase if an initial negotiation with their landlord fails.
DISCLAIMER - The information provided is for guidance and informational purposes only and does not replace independent business, legal and financial advice which we strongly recommend. Whilst the information is considered true and correct at the date of publication, changes in circumstances after the time of publication may impact the accuracy of the information provided. LJ Hooker will not accept responsibility or liability for any reliance on the blog information, including but not limited to, the accuracy, currency or completeness of any information or links.Share