Fairer laws about rent increases

The problem:

  • It is too difficult for tenants to challenge excessive rent increases.
  • There are no limits as to how often landlords can increase the rent. 

The solution:

  • Share the onus of proof in excessive rent proceedings.
  • Limit rent increases to once every 12 months.

Under New South Wales law, if you are outside the fixed term of your tenancy, your landlord can give you notice to increase the rent by any amount they want. The only limit is the power of the Tribunal to order that the rent increase is excessive – but it is up to you to apply and prove it with evidence about market conditions and other factors.

Your landlord can also give rent increase notices as often as they want – without limit. New South Wales is the only state or territory with no limit on the frequency of rent increases during periodic agreements.

The excessive rent increase provisions are little used: they represent just two per cent of applications to the Tribunal’s tenancy division. They should probably be used a lot more. In the Tenants’ Union’s 2014 survey:

  • 70 per cent of tenants were paying more rent than they were the year before; and
  • 22 per cent had moved in the last three years either because of a rent increase or to find cheaper rent.

The Tenants’ Union believes that the provisions should be made more useful and fair. Where a rent increase exceeds the increase in the Consumer Price Index (CPI) over the relevant period, the onus should be on the landlord to prove that the increase is not excessive. Where the increase is less than the CPI, the onus should be on the tenant to prove that it is excessive.

And it is appropriate to limit the frequency of rent increases to not more than once in 12 months. This would allow tenants greater peace of mind and certainty in household budgeting, without inconveniencing the majority of landlords.

Further reading

TUNSW Report: 5 Years of the Residential Tenancies Act 2015

2014 Survey Report: affordable housing and the New South Wales rental market