In Australia, many people choose to rent, including international students and workers. Since 2022, those renting in Australia may have felt it keenly: “Why has the rent surged so dramatically?” According to data from SQM Research, weekly rents in New South Wales rose by 30.1% between 2022 and 2023, Melbourne weekly rents rose by approximately 23.8%, and other areas including Sydney, Canberra, Darwin and Adelaide all maintained a rise of roughly 1% per month. As tenants, what legal knowledge do we need to be aware of when rent goes up? How often can a landlord raise the rent, and is it lawful? How much notice must a landlord give before raising the rent? If you run into a tenancy contract dispute, how should it be handled? We will address each of these questions below.
What to Watch Out For When Weekly Rent Rises in Australia
Raising rent in Australia is entirely lawful, but the frequency of rent increases depends on the state or territory in which you live, and in some jurisdictions also on the type of tenancy agreement. Generally, a landlord can only raise the rent once every six months or once a year. For example, in NSW, the ACT and Victoria, rent may only be raised once a year, while Queensland, WA and the Northern Territory allow an increase every six months.
Let’s take NSW as a specific example and go into detail:
For a fixed-term tenancy agreement of less than 2 years, if the agreement sets out the rent increase or the method for calculating the rent increase, the landlord or agent may only raise the rent within the fixed term. The clause in the agreement must state the amount of the rent increase or the precise method for calculating the rent increase (for example, an amount or a percentage). However, if the method of the increase is vaguely worded, such as “in line with the market” or “in line with inflation”, these are non-compliant. For agreements of less than 2 years, to raise the rent, the landlord or agent does not need to give the tenant written notice of the increase and can simply carry it out in accordance with the agreement.
For agreements with a fixed term of 2 years or more, the rent can only be increased once every 12 months. The landlord must also give the tenant at least 60 days’ written notice stating the date on which the increase takes effect and the new rent amount.
It is important to note that after receiving written notice of an increase, the tenant may give written notice, at least 21 days before the new rate takes effect, informing the landlord that they do not accept the new rate and will move out before the rent increase begins.
In other words, the tenancy contract should in principle clearly set out the term of the tenancy, whether rent will be raised in future, and how much it will rise by or which calculation method will apply. If the tenancy is for two years or more, then the rent may only be raised once every 12 months, and the tenant must receive 60 days’ written notice in advance.
How Much Can Australian Rent Be Raised at One Time?
Because each jurisdiction has its own rules, there is no explicit cap on the size of a rent increase. The sole exception is the ACT, where legislation provides that a rent increase cannot exceed 10% of the Canberra Consumer Price Index (which measures inflation).
What If Rent Increases Are Too Frequent or Outrageous?
At the end of March 2023, SBS published a report about a Sydney tenant, A, whose rent rose from A$750 per week to A$900 per week — a 20% increase that left him stunned. He was planning to write to his landlord asking them to reconsider the 20% rent rise, though he expected the landlord would refuse. “We will try to negotiate, but if negotiations fail, we will take it to the tribunal,” he said.
As a tenant, if you do not agree with a rent increase, you can first try to negotiate with the landlord or agent, proposing a compromise such as a smaller increase. If the landlord refuses to reconsider, you can file a dispute for resolution with the tribunal in your state or territory. However, the tenant must provide relevant evidence to show the increase is excessive; this may include rents for similar properties in the area, the state of repair, the amenities you have access to, and the landlord’s costs. If the tribunal finds the rent is excessive, it can order the increase to be stopped.
What Kinds of Tenancy Contract Disputes Arise in Australia?
Based on the rent-increase disputes mentioned above, we can trace their origin back to the tenancy contract. Rent-increase disputes are one type of tenancy contract dispute, so what does the full range of tenancy contract disputes include?
Below are some common tenancy contract dispute issues in Australia:
- Rent disputes: including late payment of rent and the lawfulness and fairness of rent increases.
- Bond disputes: disputes over the return and deduction of a tenant’s bond, and disputes relating to costs for repairing damage.
- Repairs and amenities issues: tenants may clash with landlords over repairs and amenities, such as responsibility for repairs during the tenancy and the ordinary upkeep of the property’s amenities.
- Property condition disputes: disputes involving the sanitary condition of the property, safety issues and other property-condition matters.
- Terminating the contract: including early termination of the tenancy by the tenant or landlord, breach of contract and renewal of the contract.
- Breach of tenancy rules: the tenant or landlord may breach the terms set out in the tenancy agreement, such as changing the use of the property without permission or breaching a pet policy.
- Disputes over agreed terms: disputes involving other agreed terms in the contract, such as the length of the tenancy, amendment clauses and contract interpretation.
How Are Australian Tenancy Contract Disputes Handled?
If you run into a tenancy contract dispute, we recommend taking the following steps:
- Negotiate with the other party: first try to engage in active dialogue and negotiation with the other party (usually the landlord or real estate agent) and work to resolve the issue.
- Seek professional help: if negotiation cannot resolve the issue, you can consult relevant Australian bodies or professionals such as a real estate agent, a lawyer or a tenants’ association, and seek professional advice and support.
- Lodge a complaint: finally, if the dispute really cannot be resolved through negotiation, you can consider lodging a complaint with the relevant body or the court to seek legal help.
Final Thoughts
The way tenancy contract disputes are resolved can vary depending on the specific circumstances and the legal system of the jurisdiction you are in. Therefore, when you encounter an issue, it is best to consult the relevant local bodies or legal professionals for specific legal advice and guidance.
On the topic of renting in Australia, we have written a series of articles addressing various rental issues — welcome reading:
If the Landlord Sells the Property During the Tenancy, How Should the Tenant Protect Their Rights
