What are the changes to rent increase in Queensland?
Changes limiting the frequency of rent increases to once every 12 months came into effect for all new and existing tenancies on 1 July 2023.
The new rule means that rent cannot be increased more than once every 12 months. If a tenancy agreement, signed before 1 July 2023, includes a special term for rent increase effective after 1 July 2023, it will only be valid if at least 12 months have passed since the current rent amount became payable.
This rule also applies whether or not the landlord or agent who increases the rent is the same person (e.g., where there has been a change of owner of the premises) who last increased it. This rule also applies if, for the duration of a 12-month period, at least one tenant remains the same upon the renewal of the agreement. Intentionally failing to list a continuing person as a tenant (e.g., listing as an approved occupant instead) to facilitate a rent increase more frequently than once every 12 months is an offence.
When is it permissible to increase rent under a fixed-term agreement?
As of July 2023, you can only increase rent for a fixed term tenancy agreement if:
the rent increase was included as a special term of the signed agreement from the very beginning;
the special term of the agreement states when the rent will be increased;
the special term of the agreement states the new amount (or how it will be worked out);
it has been at least 12 months since the start of the current rent amount became payable by the tenant;
you must give the tenant at least two months written notice for general tenancies.
When is it permissible to increase rent under a periodic agreement?
As of 1 July 2023, you can only increase rent for a periodic agreement if it has been at least 12 months since the last increase and you must give the tenant at least two months written notice for general tenancies.
How much notice should I give my tenants about a rent increase?
It's advisable to give your tenants as much notice as possible. Nothing in the legislation prevents you from giving notice of an increase in rent more than the 2 months written notice for general tenancies and 4 weeks written notice for rooming accommodation. This is provided that the increase does not take effect 12 months since the last rent increase.
How much should I increase the rental amount?
While the rule changes limit the frequency of increases, they do not cap the amount by which rent can be increased. We advise that your proposed rent increase consider the following factors:
the range of market rents usually charged for comparable premises;
the proposed increased rent compared to the current rent;
the state of repair of the premises;
the term of the tenancy;
the period since the last rent increase (if any).
The proposed rent should not factor in costs associated with conducting repairs, maintenance, or compliance with the prescribed minimum housing standards. Your proposed rent must also not relate to keeping a pet or working dog at the premises.
What if my tenant does not agree to a rent increase?
Tenants who find a proposed rent increase is excessive or not compliant with the law may apply to the tribunal for an order to reduce or set aside the proposed increase. The tribunal considers various factors, including market rents for comparable properties, the proposed and current rent comparison, and the property's condition, to make a decision.
Tenants must submit their application to the tribunal within 30 days of receiving written notice of the increase, or before the end of a fixed-term agreement.
What are the penalties for unlawful rental increases?
Landlords who unlawfully increase rent less than 12 months after the day of the last increase may face penalties. It's crucial to understand the regulations surrounding rent increases to avoid legal consequences and maintain a positive relationship with your tenants.
Maximum penalty—20 penalty units.
Fines are based on a system of penalty units. The maximum fine is calculated by multiplying the value of 1 penalty unit by the number of penalty units set for that offence. The current penalty value for an individual is $154.80. The penalty unit amount is greater for corporations.
Should I increase the bond amount too?
Yes! Tenants are required to increase the rental bond if the rent increases, provided they have received notice to do so.
The notice must be given at least 11 months after the commencement of the agreement or if the bond has been increased previously, at least 11 months after the date of the prior notice.
The notice must state the increased amount and the day by which the increase must be made which is one month after the tenant is given the notice.
Seeking assistance from the Residential Tenancies Authority
The Residential Tenancies Authority (RTA) provides support and information for landlords regarding rent increases. If you are unsure about the regulations and procedures for increasing rent, you should contact the RTA for guidance and assistance.
Key Takeaways
Understand the regulations surrounding rent increases.
Provide adequate notice to tenants before increasing rent.
Calculate rent increases reasonably and fairly.
Engage with tenants who disagree with rent increases and be prepared for tribunal involvement if necessary.
Follow specific rules for rent increases under fixed-term and periodic agreements.
Do not increase rent more than once every 12 months.
Consult the Residential Tenancies Authority for guidance and support.
At Pesco Properties, we are dedicated to providing the residents of Ipswich and Toowoomba valuable information that will help them maximise the value of their property or the return on their investment with our expert guidance and support. Feel free to reach out to our team for any further assistance or inquiries. Happy renting!
Disclaimer:
The information provided in this article is for informational purposes only and should not be considered financial, legal, or professional advice. The content is based on the author's personal experience, research, and opinions, and is intended to provide general guidance and insights. Every individual's situation is unique, and it is recommended that you consult with a qualified financial advisor, legal professional, or other experts before making any financial decisions or taking any actions based on the information presented in this article. The author and publisher of this article are not responsible for any errors or omissions, or for any actions taken based on the information provided herein.
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