Tales from the Vault: frequency of rent increases

Frequency of Rent Increases under the recent changes to RTA

Hi there housing staffers. It’s Mark Smoljo with your latest episode of Tales from the Tenancy Vault. After nearly two months away I’m back on the shovel. This month I’m looking at something from the very shallow end of the vault, i.e. very recent.

As you are aware, nearly all of the changes to the Residential Tenancies Act (RTA) arising from last year’s Residential Tenancies Amendment Act will not come into effect until June, 2020. The government has proclaimed a few changes already, such as provisions for leases of more than five years and appointment of the Commissioner for Residential Tenancies. The most recent changes, proclaimed on 19th June are:

  • Rent increases limited to once per year.
  • Providing renting guide (Renting a home: a guide for tenants) electronically.

Click here for Consumer Affairs Victoria (CAV) advice about these changes.

Despite this information from CAV, we are getting a lot of questions about which tenancies the frequency of rent increases applies to. The CAV website says that ‘Tenancy agreements that commenced before 19 June are not affected by this change’, but what does this mean? I will go through each of your possible scenarios:

Existing fixed term lease created before 19 June 2019

If you have a fixed term lease signed before June 19, the rent can’t be raised until the end of that lease (unless already agreed to in the lease). If they then sign a new fixed term lease at a higher rent, the rent can only be raised again after 12 months. If the lease rolls over into a periodic lease the rent also can only be raised at intervals of 12 months.

Existing periodic tenancies created before June 19, 2019

If tenancies were already periodic or rolled into a periodic tenancy before June 19, 2019, rent can be raised at six monthly intervals in perpetuity.

Tenancies on leases signed after June 19, 2019

Rent can’t be increased until the end of the lease term (unless already agreed to in the lease) and can’t be increased more than once in 12 months for both fixed and periodic tenancies.

Please note that there has been no change for frequency of rent increases for properties managed under the rooming house or caravan park provisions of the RTA.

If you have any questions on this or suggestions for future topics please email Mark Smoljo or you can ring him at the office on 9654 6077 on a Monday or Thursday.