As rental vacancy rates drop and interest rates continue to lift, tenants are seeing their rent rise to unaffordable levels. It has re-energised debates on rental reform in several jurisdictions, as the 7 million renters in Australia try to push back.
If you are a renter, here is what you need to know about your rights and how to actually enforce them.
What are your rights?
“When a renter gets a rent increase, they should check that they have been given all the information that makes it valid,” policy and advocacy manager at Tenants’ Union of NSW, Jemima Mowbray, said.
First, for tenants seeing their rent hike during a fixed term, check for “some provision to allow your rent to increase during that fixed term,” Dr Chris Martin, senior research fellow at the University of NSW city futures research centre, said. Most jurisdictions restrict rent increases during a fixed term tenancy.
Some jurisdictions do limit the frequency of rent increases. In New South Wales, Tasmania, Victoria and South Australia, rent can only be increased once every 12 months. In Western Australia and Queensland, rent can be increased every six months.
“If you’ve just had a rent increase, and you’re getting another three months later, that is probably not OK,” Martin said.
The next thing to check is the notice period. In Victoria, NSW, SA, WA and Tasmania, tenants must be given 60 days’ notice in writing of a proposed rent increase. In Queensland it is two months; in the ACT it’s eight weeks; and in the NT it’s 30 days.
If you are not in the fixed-term period of your lease, the notice period is correct, and it is within frequency limits, your next option is to challenge the amount of the increase. In most jurisdictions, Martin said, “there isn’t really a limit on that”.
“Generally, all states and territories say that rent can be increased so long as they are not excessive to the general market level of rent comparable practice,” he said.
The ACT is an exception: rent increases are capped at the rate of inflation in Canberra rentals plus 10%. Landlords have to apply to the civil and administrative tribunal to lift rent above this threshold.
In NSW, Greens MP for Newtown, Jenny Leong, has introduced a bill to NSW parliament that suggests a similar cap on rents in line with the consumer price index.
Negotiating with a landlord
A tenant has the responsibility to prove to the civil and administrative affairs tribunal in their jurisdiction that a proposed rent increase is excessive. But before going to the tribunal, try negotiating.
If a tenant who has never defaulted on rent has to consider moving out, a landlord may be left with a vacant period where they receive no rent.
“A good tenant is a valuable asset for a landlord,” Mowbray, said. “It is in their interest to keep you in your home.”
Before negotiating with a landlord, it is useful to gauge where the property fell on the market before you moved in.
“Look at that same percentile now,” he said. “If you see the rent increase has shifted you to the top of the market for example, it is clear that rent increase is out of whack.”
She also suggested a renter explain why they are unable to pay that rent. Like presenting how little wages may have increased, versus how much rent is increasing.
“It can help a landlord understand the situation from your perspective.”
Taking it to tribunal
If negotiation fails, a tenant may choose to challenge the increase at the tribunal.
Ben Cording, a lawyer with Tenants Victoria, said the tribunal does not take into account the hardship experienced by a tenant from a rent increase. Instead it looks at whether the increase is considered excessive based on a survey of similar properties, , the state of repair of the property, the cost of services associated, and any malfunctions or changes to the property since the last rent increase.
A tenant should provide evidence about the rent charged for similar properties. Martin suggested consulting property data sources, like Domain and SQM Research.
However he said to be wary of only looking at currently advertised properties, which have often had more recent repairs or renovations than those that have been rented long-term. “If you are a tenant of five years, your property is probably not in the same mix,” he said.
Mowbray suggested speaking to other renters in your area. “It can be a lot of work, but go and talk to your neighbours renting a property like yours to get an understanding of what is happening with rent,” he said.
However, he warned that negotiating or challenging a rent increase can be “quite an undertaking”.
“A lot of jurisdictions still have no-grounds evictions,” he said.“If you put your landlord offside, you could lose your house all together.”
The WA is facing pressure to abolish no-grounds evictions, in line with reforms in Victoria, Queensland and Tasmania, which only allow an eviction without cause at the end of a fixed-term agreement. There is a similar push in NSW.
“Vacancy is really low, rents are really high” Alice Pennycott, principal lawyer for tenancy at Circle Green community legal centre in Perth, said. “You have situations where tenants are scared to enforce any rights they have.”
• This article was amended on 11 August 2022. The notice period for a rent increase in Queensland is two months, not four weeks as a previous version said.
