When rent can be increased
Rent can only be increased if there is a written lease that allows for rent increases, or if the lease is not in writing.
An owner can only increase the rent after giving the tenant written notice at least 60 days before the new rent amount is to start. The notice must state:
- the amount of the new rent and
- the day on which the new rent begins.
The rules around rent increases are designed so that a tenant knows their rental obligation for at least a 12 month period. Therefore, in most cases, rent cannot be increased mid-tenancy - it can only be increased:
- at the beginning of the lease, or
- at lease renewal or extension.
If the lease is longer than 12 months (18 months for example), rent can be increased 12 months after the start of the lease.
If the lease is less than 12 months, rent can only be increased at least 12 months after the tenancy started, even after the lease is extended or renewed.
A tenant signs a 6 month lease at $200 pw. They then renew/extend their lease for another 6 months. The rent cannot be increased at this time, as it has not been 12 months since the start of the lease or since lease renewal. However, if the tenant then extends/renews for another 6 months, the owner can increase the rent (with 60 days’ notice), as it has been 12 months since the start of the tenancy.
If a Court Order is made about rent during a lease, rent can only be increased 12 months or more after the Order was made.
Unreasonable rent increases
Tenants: if you think a rent increase is unreasonably high, you can apply to the Residential Tenancy Commissioner to have the rent increase reviewed using the Application for Unreasonable Rent Increase form (PDF, 78.5 KB).
The Commissioner can make an order that a rent increase is reasonable, or that it is unreasonable and specify a different amount.
When applying, you will need to supply:
- a copy of the lease
- a copy of the rent increase notice
- any details of the history of the tenancy that might be relevant (such as length of tenancy, details of any other increases) and
- any details about the property that might make the rent increase unreasonable, such as outstanding maintenance, and how much other similar properties in the area are being rented for.
The Commissioner will ask the owner or agent for similar details. The Commissioner assesses the validity of the increase (whether proper notice was given), as well as the reasonableness of:
- the amount of the increase and
- the amount the rent was increased to.
If the rent increase makes the rent amount similar to rent paid on a similar property in a similar condition in a similar location, it is likely the increase will be found to be reasonable.
The Commissioner makes the findings in a formal Order and provides a copy of the Order to each party. Either party may appeal the Order to the Magistrates Court within 60 days. If the Order is appealed, the rent increase continues as if the Order was not made, until decided at appeal.