Rental affordability is a hot button issue in Australia and for many people, any increase in rent can amplify any cost pressures that a family may be facing. For anyone who may have questions relating to rental increases, this piece will provide a broad outline to some of the more general questions that may arise in such a situation.
Under what circumstance are landlords not allowed to increase rent?
Generally speaking, for fixed term contracts of less than two years, a landlord cannot increase rent unless 60 days’ written notice has been provided, and that the rental agreement either specifies the increase in rent, or there is an outline of the method for which the increase will be calculated.
In relation to fixed term agreements of two years or more in duration, the 60 days’ written agreement can be applied, and a maximum of one increase is allowable for a 12 month period.
Can tenants end a rental agreement due to an increase in rent?
For fixed term agreements that are at least two years in duration, tenants usually can terminate an agreement on the grounds of an increase in rent provided that 21 days’ written notice has been given to the landlord. In specifying a date, tenants may state a date of termination of the agreement, and they may not be liable for any additional amount related to the early termination of the agreement.
If an agreement becomes a periodic tenancy, any increases in rent may be done so provided the landlord has given the tenant 60 days’ written notice. Failure to provide notice, may not make the increase binding, and the tenant may be reimbursed for any excess rental payments.
What if rent has been increased illegally?
In the event that an increase is illegal, the tenant may make an application to the relevant State or Territory administrative tribunal for an order for a refund of up to 12 months of the overpayment after notice was given. Failure of a tenant to bring any action before a tribunal after 12 months may mean that the increase may be considered valid. However, the tenant may take action in the Local Court for a refund of overpayment of rent.
What if the tenant believes that the rent increase is too high?
If a tenant believes that the increase is too high, then it may be useful for the tenant to negotiate with the landlord. If the landlord is unwilling to negotiate and the tenant still believes that the increase is too high and is excessive when compared to other rental properties in the area, they can make an application to the relevant State or Territory Tribunal for an order that the increase is excessive within 30 days upon receiving notice of the rent increase.
The Tribunal may make an order in agreement with the tenant that the increase is excessive, and that rent may not exceed a specified amount. Such orders may have an effect for up to a year and may only apply to the tenants rather than the property.
If a tenant is unsuccessful in either reaching a compromise with the landlord or in their appeal to the Tribunal, the new rental amount may take effect after 60 days.
Please keep in mind that this is only a broad outline and that if you have any tenancy issues, please seek the help of a lawyer who will be able to help with your matter.