Rent can be increased by a landlord if the correct notice periods are followed and certain conditions are met. Rent can also be reduced.

Legislation changes affecting rent increases

From 12 August 2020, rent increases are limited to once every 12 months. This is a change from once every 180 days (six months). There continues to be a freeze on rent increases, which means landlords cannot increase rent until after 25 September 2020.

Any rent increase notices given to tenants from 12 August 2020 must comply with the new 12-month rule. If a notice was given before 12 August 2020, it is still within the 180-day rule.

How this will work in different scenarios

Before the law changed on 12 August 2020

Landlord A issued a rent increase notice to their tenant before the law changed on 12 August 2020. The rent can increase with 60 days’ written notice on or after 26 September 2020 if:

  • the tenancy started more than 180 days before the rent increase will take effect, and
  • it has been more than 180 days since the last rent increase

After the law changed on 12 August 2020

Landlord B issued a rent increase notice to their tenant after the law changed on 12 August 2020. The rent can increase with 60 days' written notice on or after 26 September 2020 if:

  • the tenancy started more than 12 months before the rent increase will take effect, and
  • it has been more than 12 months since the last rent increase

Important COVID-19 information on rent increases:

As of 26 March 2020, there is a freeze on rent increases. This will apply for an initial period of six months, from 26 March until 25 September 2020. This means that landlords can't increase rent for their rental properties until after 25 September 2020.

If a rent increase was negotiated or served prior to 26 March 2020, but it did not come into effect until after that date, then that increase is of no effect (there is no rent increase).

Rent increases that took effect before 26 March 2020 remain in place.

Landlords can give notice of intention to increase the rent, but this cannot take effect until after 25 September 2020 (at the earliest  the legislation may be extended past this date).

If a landlord increases the rent or tries to increase the rent during the rent-freeze timeframe, they may be liable for exemplary damages of up to $6,500.

Landlords and tenants can agree to lower the rent temporarily. This could be for a specific time period or until a specific event occurs. Once that time is up, the rent returns to the original amount. Returning rent to the original level is not a rent increase, so is not caught by the rent increase freeze.

Landlords and tenants should talk to each other, work together and take care of each other wherever possible. Try to come to an arrangement that suits everyone.

More information about this announcement

COVID-19 recovery: Guidance for discussions about rent

 

Rent increases

For both fixed-term and periodic tenancies, landlords can only increase rent:

  • after the first 12 months of the tenancy
  • provided the increase is not within 12 months of the last increase.

Landlords must give the correct notice and meet certain conditions.

For fixed-term tenancies, landlords can only increase rent if the tenancy agreement allows this.

Special rules apply if a tenancy agreement is subject to an annual rent increase process.

Landlords must give notice to increase rent

A landlord must give their tenant at least 60 days’ written notice of a rent increase. Boarding house landlords must give their tenant at least 28 days’ written notice.

The notice must be served in writing, say how much the rent is increasing by and the day the increased rent is due. The landlord should keep a copy of the notice. If the landlord doesn’t give the correct notice they can:

  • serve it again correctly
  • ask the tenant to let them extend the notice time so it is correct, or
  • apply to the Tenancy Tribunal to extend the notice, if the tenant won't allow the landlord to extend it.

Serving notices

Download our notice of rent increase templates below.

Landlords decide how much to increase the rent

The law doesn’t limit how much landlords can increase rent by. It does say how it must be done, and what the tenant can do if they don’t agree with the new rent amount.

A landlord and tenant can also agree to an increase of the rent outside of the 12 month period if the landlord has:

  • improved the property, which increases its value and benefits the tenant (not being general or necessary repairs)
  • improved facilities or services for the tenant (not being general or necessary repairs)
  • changed the tenancy agreement to benefit the tenant.

A landlord may apply to the Tenancy Tribunal to increase the rent if:

  • the tenant doesn’t agree to increase the rent (and the landlord has improved the property (not being general or necessary repairs) or changed the tenancy agreement to benefit the tenant).
  • the landlord has had unforeseen expenses since the rent was last increased.

If the Tenancy Tribunal increases the rent for these reasons, this doesn’t change the normal date the rent is reviewed or increased.

Landlords and tenants should keep in contact and discuss any possible changes to the rent.

Landlords can also increase the bond

When a landlord increases the rent, they can ask the tenant to pay extra bond money. This must be based on the number of weeks’ bond charged in the tenancy agreement.

Adding to an existing bond

Rent reductions

The rent can also be reduced in certain situations.

For a specified period or event

A landlord and a tenant may agree to a temporary reduction of the rent for a set period. For example, if a room is being repaired and can’t be used for a while.

Once the period has ended or the work has finished, the rent goes back to the original amount. This is not a rent increase and doesn’t need notice.

If the rent is too high

If a landlord is charging a lot more than is being charged for similar properties in the area, the tenant can apply to the Tenancy Tribunal. The Tribunal could make an order for the rent to be reduced. The tenant will need to have evidence that their rent is a lot higher than rent for similar houses in the same area.

If you have a fixed-term tenancy, you can only apply to the Tenancy Tribunal for a market rent review within:

  • 3 months of the beginning of the tenancy, or
  • 3 months of the date of the last rent review.

Market rent 

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