Paul Hill Realty knows both tenants and landlords have questions regarding rent increases. Below are the FAQs supplied from the Real Estate Institute of Queensland (REIQ) on the topic of Rent Increases.
Q: The vacancy rate is really low in our area. The current tenant’s 12-month tenancy agreement is due to expire in the next few months and the owner is requesting the rent to be increased significantly when we offer another 12-month fixed-term agreement. Can this be done?
A: Any rent increase should be supported by a Comparative Market Analysis (CMA). If the CMA suggests that a tenant would pay a similar amount in rent for a property this indicates the new terms offered for a new agreement are consistent with current rental market conditions.
Q: The tenant is on a periodic tenancy, how much notice is required to give an increase?
A: The rent can be increased with a minimum of two months’ written notice. The notice could be given to the tenant at any time, but the rent increase cannot commence sooner than six months after they started paying the current rent amount.
Q: The tenant is on a fixed-term tenancy, can their rent be increased during their fixed term?
A: Yes. However, only if the below criteria are met:
– The rent increase was included as a special term of the signed tenancy agreement from the very beginning, starting when the rent would increase and the amount of the increase or how this is to be worked out;
– A minimum of two months’ written notice is provided; and
– The increase doesn’t commence sooner than six months after they started paying the initial (current) rent amount.
Q: Can the bond be increased in line with the rent increase?
A: Yes, the bond may be increased if it’s been at least 11 months since the last bond increase or the start of the tenancy. Any extra bond must be lodged with the RTA using a Bond lodgement (Form 2).
Q: What sections of the RTRA Act cover rent increases?
A: Sections 91, 92 and 93.
Q: Is there a particular form used to notify a tenant of a rent increase?
A: There’s no form provided by the RTA, but the notice must state the amount of the increased rent and the day from when the increase is payable.
Q: Can a tenant object to a rent increase?
A: 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.
Q: I am a Landlord who has a new tenancy on a three-month agreement. At the end of the agreement when negotiating a further three-month agreement with the same tenants, can we increase the rent?
A: No. A rent increase cannot commence if it is sooner than six months after the current rent became payable.
Q: The tenant has been paying the same rent for at least six months, and is currently on a periodic agreement. I as the landlord want to instruct my property manager to get a new fixed-term agreement signed at a higher rent. Do tenants require two months’ notice?
A: 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.
Q: The tenant is on a fixed-term agreement which expires in a few days’ time. I as the landlord want to instruct my property manager to get a new agreement signed at a higher rent. Do tenants require two months’ notice?
A: Tenants don’t have to get two months’ notice if they sign a new agreement with the higher rent before the expiry of the current agreement. 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.
The best practice is to give the tenant as much notice as possible. However, 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 immediate.
Q: As the owner, I want to offer a 12-month fixed-term rental agreement, and then include a special term stating the rent will be increased quarterly by $5.00 per week. Is this allowed?
A: No. Rent can only be increased if it’s been six months since the last increase or six months since the start of the tenancy. Tenancy agreements must clearly outline that rent will be increased – with the increased amount (or how the increase will be calculated).
Property managers/owners must also give tenants two months notice in writing, stating the new amount and the date the increase takes effect, even if the tenancy agreement already allows for the rent increase.
Note: The Legal Profession Act 2007 (Qld) prohibits agents from drafting special terms.
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