Rent increases are an important part of what we do for our landlords, so I thought it would be sensible to give you an idea of the law surrounding rent increases, so that you understand how and why we are completing them.

Rent will increase due to market pressure and when prices of other items are increasing, like interest rates and council rates.  Currently we are seeing rising interest rates and this is making a lot of landlords become under some stress and feeling the need to increase the return that they are receiving on their investment property.  Supply and demand will make a difference to rental pricing as well, because when we are in short supply, we are able to ask higher prices and vice versa.

The first thing that our office will do, is to complete a comparative market analysis, this is where we compare your property to what else is on the market for lease currently.  This is an exceptionally important part of the rent increase process, as this information is what will be relied on by NCAT if there are any disputes over the increase amount.  After comparing with what else is on the market, we will turn our attention to our own portfolio of rental properties, and we will compare you to these leased premises.

At this stage, we will have an idea of whether a rent increase is viable for your property or not and we will make a recommendation to you about how much we would recommend for you to look at increasing your rent.  We are happy to make this a collaborative approach and to keep your requirements in mind at this stage, however, if you have any push back, you need to remember that if the house will not rent for the increased amount on the open market, then you might consider negotiating, so that you do not lose a good tenant!  For the amount that an increase will achieve, sometimes you are better to make informed decisions and manage your risk, than you are to just go ahead and do an increase at the risk of losing a good sitting tenant.

The next requirement that we have under NSW tenancy law, is that the tenant must be advised of the rent increase, by providing them with 60 days clear notice.  The rent cannot increase on a day that is not a rent day, so this increase will always be over the 60 days, by the amount of days it takes to get to a rent date (see example below for further clarification!)

If the tenant has signed an electronic service of documents form, we are allowed to send this increase notice to the tenant via email.  If they do not have an email, or they have not approved the electronic service of documents, then we will need to provide them with 7 days postage (which does not include the weekend).  This can also add to the time required to provide.

We arrange with our tenants for them to acknowledge that they have received their rent increase in writing, by having them sign a docusign form, so that we do not have issues, where tenants in the past have indicated that they have not received the required notice – just another little check that we include, to ensure there are no issues.

Mikayla from our office is the person that is completing rent increases for us at present, she is only working one day a week, so you may need to be patient with us around timing.  As you can see from the above process I have explained, this is not as easy as just providing a higher price to a tenant.

The other rules that we have under the Residential Tenancies Act is that we are not allowed to increase the rent more than once in a 12 month period AND that we cannot increase the rent while the tenant is on a fixed term lease, unless the increase notice was provided inside the lease prior to the tenant signing it.  If you have a rent increase in a new lease, the amount on the front of the lease will be the current rent amount and the increase will be noted at clause 68 of your new lease.  Landlords call us all the time to say that we have forgotten the increase, when it is them who has forgotten to read the whole document and it is noted at this clause, which we also have the tenant initial to state that they are aware of the increase!

You also cannot just increase the rent without providing the required 60 days notice and this includes if the current tenant agrees to a new lease – the required notice is LAW.  I have seen other agencies in our area who have increased rent without providing the required notice, when the current tenant signs a new lease.  This is not legal and if it is disputed, you could be made to pay back to your tenant the full amount of the increase.  I have picked up a property very recently from another local agent, where this is exactly the situation that the landlord was faced with and they had to pay back hundreds of dollars to their tenant, withdraw the increase, provide the required 60 days notice, before the increase could happen correctly and they were able to be out of the risky area of issues with NCAT.

I am sure that you will agree after reading this, that a rent increase is a bit of a process that needs to be completed and this takes time.  We always want to provide you with the best service that we can, which is why I wanted to be very clear about how this process happens on our end.  If you have further questions, or would like to discuss this with me, I can be reached on 02 6352 5125.

EXAMPLE:  Property – 123 Your Street, Lithgow – Current rent $350 per week.  3 bedroom, 1 bathroom, single garage

Comparative properties: 7 My St, Lithgow $370 – 3 bedroom, 2 bathroom, central heating, single garage  (better than your property as it has 2 bathrooms)

13 The Avenue, Lithgow $360 – 3 bedroom, 1 bathroom, double carport (similar to your property – has 2 carports, but you have a lockup shed)

22 General Rd, Lithgow $360 – 3 bedroom, 1 bathroom, single garage (same as your property – direct comparison)

The current market is a normal rent market, with no external forces causing any issues.  Our office recommends that you increase your rent by $10 per week, with the rent going up to $360 per week.

This is updated by our office on Wednesday 24/8.  The tenants rent day is a Friday 26/8.

60 days from Wednesday 24/8 is Sunday 23/10.  The rent cannot increase unless it is rent day, so we need to move this date to the following Friday  28/10.  This can only happen if the tenant has signed for electronic service of documents and this notice can be provided to them today.

If we have to post – we need to work out 7 days postage, which cannot include the weekend.  This means the date is now Friday 2nd September – this is when I am required to provide notice from.  60 days from 2/9 is Tuesday 1/11.  As we also need to move this date to a rent day, the increase will begin on Friday 4/11.