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24 Mar 2017

Rent Increases – Your questions answered

The tenant is on a periodic tenancy. Can I increase their rent?   Yes, with minimum 2 months written notice.  The notice could be given to the tenant at any time, but the rent increase cannot commence sooner than 6 months after they started paying the current rent amount.  

The tenant is on a fixed term tenancy. Can I increase their rent during their fixed term?  Yes but only if: 

• The rent increase was included as a special term of the signed tenancy agreement from the very beginning, stating when the rent would increase and the amount of the increase or how

this is to be worked out

• Minimum 2 months written notice is provided

• The increase does not commence sooner than 6 months after they started paying the initial (current) rent amount.   We had negotiated a three month tenancy with new tenants to move into a property. At the end of that three month agreement we are negotiating a new 3 month agreement with the same tenants at a higher rent. Is this permitted?    No. Because it is with the same tenants, the rent increase cannot commence if it is sooner than 6 months after the current rent became payable, even if the increase takes effect from one agreement to the next.

I rented the property to two tenants for a 6 month agreement. Three months later, one of the tenants has vacated, one has stayed, and a different co-tenant has been approved.    Can we increase the rent?   No. The increase cannot commence sooner than 6 months after they started paying the current rent amount in situations where even one of the tenants paying the current rent will be subject to the increase. 

We had previously negotiated a three month tenancy on a property. That agreement is now ending, and all of the tenants are vacating. We have found completely new tenants to commence a new agreement. The previous tenants were only paying their rental amount for less than 6 months, but we want to charge the new tenants a higher rent than the previous tenants were paying. Can we do this? Yes. In this case, none of the tenants paying the current rent will be subject to the increase, as they are all moving out. The higher rent will be payable by completely new tenants. You can charge the new tenants a higher rent from day one of their tenancy because they were not the tenants paying the lower rent. The higher rent is stated in item 7 of the new agreement and is payable by the new tenants from the start date of the new tenants’ tenancy agreement.

The tenant is on a fixed term agreement which expires in a few days time. The owner has only just instructed me to have a new agreement signed at a higher rent. Do I have to give the tenant 2 months notice?  Not if the tenant signs a new agreement with the higher rent. The two months notice only applies to a rent increase for a periodic tenancy, or for a rent increase coming into effect during the term of a fixed term agreement.    In a situation where a tenant is entering into a new fixed term at the end of their current fixed term, and the new fixed term agreement is at a higher rent, the rent increase is not occurring during the original fixed term.

In these situations the RTRA Act does not require any particular period of notice to the tenant regarding the rent increase. If the tenant signs the new tenancy agreement, then whatever rent is stated in item 7 will be payable from whatever date is stated in item 6.2, even if that is immediately. Best practice is to give the tenant as much notice as possible to increase the chance of them signing the new agreement, and to ensure that good tenants are persuaded to stay. 

The tenant has been paying the same rent for at least 6 months, and is currently on a periodic agreement. The owner has instructed me to have a new fixed term agreement signed at a higher rent. Do I have to give the tenant 2 months notice?  Not if the tenant signs a new agreement with the higher rent. The two months notice only applies to a rent increase for a periodic tenancy, or for a rent increase coming into effect during the term of a fixed term agreement.

In a situation where a tenant is entering into a new fixed term, and the new fixed term agreement is at a higher rent, the rent increase is not occurring during the periodic tenancy. In these situations the RTRA Act does not require any particular period of notice to the tenant regarding the rent increase. If the tenant signs the new tenancy agreement, then whatever rent is stated in item 7 will be payable from whatever date is stated in item 6.2, even if that is immediately. 

A new owner has bought a tenanted property. Seeing as the current rent was negotiated with the previous lessor, she now wants to increase the rent. Can she?    Regardless of a change of lessor (or agent), the rules about rent increases still apply to the tenancy. Therefore this answer will depend on the type of tenancy in place, and how long it has been since the current rent amount became payable with the tenants.    

Is there a particular form used to notify a tenant of a rent increase?  There is no form provided by RTA, but the notice must state the amount of the increased rent, and the day from when the increase is payable.

Can a tenant object to a rent increase?   Yes.   When a tenant is notified of a rent increase, they can make an application to QCAT within 30 days (and before the end of the fixed term). QCAT must have regard for the types of issues mentioned in section 92(4) of the RTRA Act. 

What sections of the RTRA Act cover rent increases?   Section 91, 92, and 93.4

 

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