WHEN CAN I CHALLENGE A RENT INCREASE?
How can a landlord justify an increase?
Rent prices move up and down, depending on factors such as the property market, the demand for the premises and the desirability of its location.
Your landlord or agent may increase your rent provided that it is allowed under your tenancy agreement and only if they give you written notice of the increase.
This means that if you have signed a lease for a fixed term your landlord will most likely be unable to increase the rent until your tenancy agreement has expired, or if an increase is included in the agreement.
What is a reasonable increase?
Leo Patterson Ross, CEO of the Tenants’ Union of NSW told the Law Society Journal that there’s “not really a definition” of what counts as a reasonable rent increase.
“A very rapid increase is perfectly legal, even if it’s got no relationship to the increase in costs that the owner has or the quality of the building,” Patterson Ross said.
What can I do if I think my rent increase is excessive?
As a tenant you have rights under the Residential Tenancies Act 2010 and Residential Tenancies Regulation 2019.
If you think a rent increase is excessive, you can negotiate with the landlord or agent to lower or withdraw the increase. Or you can challenge the increase by applying to the NSW Civil and Administrative Tribunal (NCAT).
How do I negotiate a lower rent?
The Tenants’ Union of NSW has created a free Rent Increase Negotiation Kit, it includes a Letter Generator and other tools to help you negotiate a better rent. It is available here.
What is NCAT?
According to its website NCAT is ‘’an independent, specialised and accessible service for the fair and timely resolution of disputes according to law’’. It is the main forum for resolving tenancy disputes between landlords and tenants in NSW.
NCAT can make several legal decisions regarding a tenancy, including whether a rent increase is excessive or not. If it decides than an increase is excessive it means that you will not have a pay rent over a certain amount, for a period of up to 12 months.
To apply for an application, visit the NCAT website here.
You need to apply within 30 days of getting an increase notice.
The Tenants’ Union of NSW advises that when negotiating you should still apply to NCAT anyway just in case you cannot come to an agreement within 30 days.
When deciding whether a rent increase is reasonable or excessive, NCAT will consider factors including:
- rents for similar premises in the same area
- the landlord’s expenses for the premises (such as cleaning and repairs costs, rates, and levies)
- the fittings, appliances or other amenities and facilities provided with the premises
- the condition of the premises
- when the last increase was
- any work you have done to improve the premises.
It is important to note that in making a decision NCAT will not consider your income, or whether you can afford the rent increase.
What should I do before applying to NCAT?
The Tenants’ Union of NSW advises that you should first gather evidence to support your application. Check out their Rent Increases Factsheet here for further advice on what evidence will help with your claim.