Regulations on rent increases
By Tamara Dalziel from Complete Property Centre email@example.com
In last months Attitude Finance Newsletter, we talked about the continuing rental rises happening in the South East Queensland rental market.
As many investment properties already have tenants in place, owners need to be aware of the regulations surrounding rent increases, to ensure they abide by the law and still achieve the best possible returns on their investment.
Under the Residential Tenancies Act, rent increases can not be applied during a fixed term lease agreement unless a special condition, which complies with Section 53 of the Act, is noted on the agreement and agreed to by the tenant.
Alternatively, there are 2 options that can be taken in order for an owner to increase the rent at the end of a fixed term tenancy agreement.
Firstly, notification is to be given to the tenant in advance of the current lease expiration offering the tenants a new agreement at the increased rental amount. If the tenants choose not to accept these new terms, the owner has the option to either allow the agreement to become a periodic tenancy or to issue the tenant with a minimum of 14 days notice in writing prior to the lease expiring.
The above offer of a new lease agreement is just that, an offer. It is not a notice to the tenant of an increase in rent and the rent increase will only take effect if the tenant agrees to the new terms of the agreement.
It is therefore best to clarify the tenants intentions in advance to guarantee that a satisfactory outcome is achieved. This also allows enough time to arrange a new tenant to rent the property if required.
The second option is to wait until the end of the agreement when the term becomes periodic, then by notifying the tenant in writing and giving 2 months notice, advise them of the rent increase.
The negative to the section option, is that if the owner requires vacant possession of the property whilst the tenant is on a periodic tenancy, a minimum of 2 months notice is required, whereas, the tenant is able to vacate the property with a minimum of 2 weeks notice to the owner.
Overall, it is best to keep regular contact with your tenants to keep them educated about the increasing market and give advance notice for any changes that may affect their tenancy.
For more information regarding rent increases or any other property management issue, please contact our office on (07) 3257 2500.