Rent increases

Rent increases for fixed term tenancies

Rent can only be increased for a fixed term tenancy if the tenancy agreement says that it can (s 24(g) RTA. The Act includes examples of clauses for rent increases in fixed-term tenancy agreements which are set out in Schedule 1 RTA). For those fixed term tenancies that allow rent increases, the same rules as for periodic tenancies apply (see below).

Rent increases for periodic tenancies

For periodic tenancies (and fixed term tenancies where rent increases have been provided for in the tenancy agreement), rent increases must happen in accordance with the following rules (s 24 RTA):

60 days’ notice must be given

A landlord must give the tenants at least 60 days’ notice in writing of an increase in rent. (For boarding houses, at least 28 days notice is required (s 24(1)(c) RTA.)

Time must be allowed for delivery

Unless the notice is physically handed to the tenant, 1 - 4 days extra must be added on to the notice period to allow time for the tenant to receive the notice. (The exact number of days depends on how the notice is served - more information can be found here).

Amount of increase must be stated

The notice must say the amount of the increased rent and the day on which the new rent will become payable, which must be at least 60 days from the date of the notice (s 24(1)(b)(c) RTA).

At least 12 months between rent increases

A landlord can’t increase the rent within 12 months from the start of the tenancy (s 24(1)(d) RTA). They also can’t increase the rent within 12 months of the date that the last rent increase took effect (s 24(1)(e) RTA).

Rent increases FAQ

What can the tenant do if the notice is incorrect?

A notice that does not follow the rules listed above is not valid and does not have to be followed by the tenant.

If a tenant receives an invalid notice, they need to decide whether to tell the landlord about the mistake, or just ignore it and do nothing. If the landlord realises (or is informed by the tenant) that the notice is incorrect, they can ask the tenant for permission to issue a further notice that fixes the problem with the invalid notice.

If the tenant doesn’t agree to changing the invalid notice, the landlord will have to start again and serve a new notice, with a new notice period, or they can apply to the Tenancy Tribunal to have the mistake corrected (s 24(4)-(6) RTA).

Can the landlord increase the rent more often than every 12 months?

There are two situations where the rent may be able to be increased sooner than 12 months since the last increase (or since the start of the tenancy).

1. The tenant and landlord can agree that the rent can be increased sooner, because the landlord has (with the tenant’s consent):

made substantial improvements to the premises (that are not just general or necessary repairs) that increase the property’s value and benefit the tenant in a real way, or
increased or improved the facilities or services (other than general or necessary repairs) provided for the tenant, or
agreed to a variation in the terms of the tenancy that benefits the tenant

(See s 28 RTA)

If the tenant doesn’t agree in this situation that the rent should be increased, the landlord would have to apply to the Tenancy Tribunal seeking an order that the rent be increased.

2. The landlord can also apply to the Tribunal to have the rent increased sooner than 12 months if the landlord has had unforeseen expenses in relation to the property, and those costs could not reasonably have been expected at the time the rent was last set (s 28A RTA).

How much can the landlord increase the rent by?

It’s up to the landlord to decide how much to increase the rent by. If the rent increase seems excessive, or it is a lot more than similar properties in the same area, the tenant can challenge the rent increase. This could be by first talking to the landlord to see if a smaller increase can be negotiated, or by taking the matter to the Tenancy Tribunal if the tenant believes that the rent "exceeds the market rent by a substantial amount". See challenging rent levels for further information.

Can a tenant rely on a landlord’s verbal promise not to raise the rent for a certain period (longer than 12 months)?

Probably not, as it will be difficult to prove that this is what the landlord actually agreed to. If the landlord makes a promise like this, a tenant should ask the landlord to add it to the tenancy agreement, or at least get it recorded in writing (eg, in an email from the landlord).

Can the landlord require more bond to be paid if the rent goes up?

Yes. Landlords are able to ask for a further bond amount if the rent goes up so that the total bond is up to four weeks’ rent at the new rent level (s18(2) RTA).

If the landlord does ask for additional bond, the formula for calculating how much more bond to pay is:

the number of weeks covered by the bond x the rent increase

The Tenancy Tribunal gave an order setting market rent. When can the landlord raise the rent again?

If the Tenancy Tribunal gives an order saying what the rent is to be, the order will also include a time period of up to six months where that order applies. The landlord must not raise the rent within that time period (s 24(1)(h) RTA).