Rent increases which meet current requirements and came into effect before 1 July 2023 will still apply.
As of 1 July 2023, the rent increase frequency changes apply to all new and existing tenancies. Any rent increase will only be valid if it has been 12 months or more since the current rent became payable by the tenant. More frequent rent increases written into tenancy agreements are unenforceable and do not apply.
Example 1: Tenants moved into a rental property in December 2022 and signed a 12-month agreement, which included a clause to increase the rent in June 2023. This rent increase still applies because it came into effect before the 1 July 2023 changes.
Example 2: Tenants moved into a rental property in February 2023 on a six-month agreement which ends in August 2023. In April 2023, the tenants and the property manager agreed to renew the tenancy agreement for a further 12 months at the end of the tenancy. They signed a new lease to start in August 2023 with a $20 rent increase. The new rent amount is invalid because it comes into effect after 1 July 2023 and it will have been less than 12 months since the tenants moved into the rental property and paid the current rental amount.
In this situation the property manager/owner should issue the tenants with a new tenancy agreement which complies with the rent increase frequency changes. This new tenancy agreement will replace the non-compliant agreement. Examples of a compliant agreement in this scenario would be:
- a 12-month agreement at the same rent as the original tenancy agreement
- a 12-month agreement which starts at the same rent as the original agreement with a clause to increase the rent in February 2024, as this marks 12 months since the tenants moved into the property and paid the rental amount.
Example 3: Tenants moved into a rental property in February 2023 and signed a 12-month agreement, which included a clause to increase the rent in August 2023. This rent increase is invalid because it comes into effect after 1 July 2023 and it has been less than 12 months since the last rent increase. The rent cannot be increased until February 2024.