FAQs: Rent Increases
The Property Management Support Service (PMSS) team fields up to 100 calls a week from REIQ members seeking clarity on certain topics – with rent increases the trending topic of late. Have a topic you’d like us to cover in an upcoming edition of the PM Update? Email us at firstname.lastname@example.org!
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 I increase their rent during their fixed term?
A: Yes, but 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, stating 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: We have a new tenancy on a three-month agreement. At the end of the agreement we are 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 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 two months’ notice?
A: You don’t have to give the tenant 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. 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: The tenant has been paying the same rent for at least six 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 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: 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: 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.