Changes to the act

On July 1st, 2013 the Residential Tenancies act changed. These changes apply to all landlords whether their property is managed privately or by a Property Manager. There are over 100 changes and they will affect how we manage your property.

One of these changes of which you need to be aware is the new legislation regarding rent increases.

As leases expire after July 1st, the opportunity to increase the rent will have to be managed a good deal earlier than was previously required. Please read the following and if you have any questions please give us a call.

Rent Increases – New requirements.
Under the new legislation Section 31b deals with changes to how a rent increase can be implemented.

Rent increase when negotiating a new lease:
Where a fixed term lease comes to an end and the parties agree to enter into a new lease at a higher rent, it will be a requirement that the higher rent cannot be charged for the first 30 days of the new lease.

From July 1st, property managers and landlords must allow for this when renegotiating a lease. Bearing in mind that the usual rent period is fortnightly this means that the rent increase will come into effect 2 days into a rent period.

This can be problematic when trying to explain to a tenant that they must pay 2 days rent at the old rate and (if a fortnightly payer) 12 days rent at the new rent 28 days into the new lease!!!

One way to ease this transition and to comply with the legislation is to enforce the rent increase at 35 days (5 weeks) to align with the rent periods.

Increasing the rent during a fixed term:
During a fixed term lease (eg. a 12 month lease) the rent can only be increased if the amount of the increase or the method for calculating the increase is set out in the tenancy agreement, for example in line with CPI at the six month mark. The new prescribed tenancy agreement will contain space to include this information.

So effectively the increase must be stipulated at the commencement of a fixed term lease.

Notice Period
There is also written into the new legislation the requirement to notify a tenant 30 days from the end of the lease in writing whether they will be offered a new lease or whether the owner requires vacant possession at the end of the lease.

This means that we will be contacting you well in advance of this notice period prior to the end of a lease to get your instructions on both rent increases and lease renewals, to ensure that your wishes can be implemented without undue delay within the constraints of the new legislation.

Detailed information on all the changes to the legislation can be found on the Department of Commerce website.