Rent Increases

The market at the moment is still not in favour of the landlord due to the influx of properties that have not sold coming onto the market for rental. Unfortunately this means rents are dropping rapidly compared to other years. In needing to decrease the rent to find a suitable tenant you may feel stressed with added pressure on your financial situation. The good news is there are options to increase the rent during the tenancy provided you follow the regulations set out in the Residential Tenancies Act 1995.

“During a fixed term tenancy agreement the rent cannot be increased unless you include a condition in the agreement specifically allowing for an increase in rent.

In an order of the Residential Tenancies Tribunal made on 29 September 2008, the Tribunal found that a condition stating ‘the rent shall be reviewed in accordance with the Act’ is not specific enough to provide for an increase, and therefore is invalid.

For a rent increase condition to be valid, it must specifically retain the right to increase the rent during the term of the agreement. An example of a valid rent increase condition is ‘the landlord reserves the right to increase the rent during the agreement’.” (OCBA)

55.(1) The landlord may increase the rent payable under a residential tenancy agreement by giving written notice to the tenant specifying the date as from which the increase takes

effect.

• A series of residential tenancy agreements single residential tenancy agreement for the purposes of this section unless at least six months between the same parties and relating to the same premises is treated as elapsed since rent for the premises was fixed or last increased.

(2) However—

(a) the right to increase the rent may be excluded or limited by the terms of the residential tenancy agreement; and

(b) if the tenancy is for a fixed term, the residential tenancy agreement is taken to exclude an increase in rent during the term unless it specifically allows for an increase in rent; and

(c) the date fixed for an increase of rent must be at least six months after the date of the agreement or, if there has been a previous increase of rent under this section, the last increase and at least 60 days after the notice is given but—

(i) if the maximum rent for the premises has been fixed by a housing improvement notice, and the notice is revoked, the landlord may, by notice given under this section within 60 days after revocation of the housing improvement notice, increase the rent for the premises from a date falling at least 14 days after the notice is given; and

(ii) if the landlord is a registered housing co-operative, and the residential tenancy agreement provides for variation of rent in accordance with the tenant’s income, the landlord may increase the rent on the ground of a variation in the tenant’s income from a date falling at least 14 days after the notice of the increased rent is given; and

(iii) if the landlord is a registered housing co-operative under a residential tenancy agreement that allows the landlord to change the basis of calculating the rent payable under the agreement, and the landlord gives the tenant written notice that there is to be a change in the basis of calculating rent as from a specified date (which must be at least 60 days after the notice is given and at least six months from the date of the agreement, or if there has been a previous change in the basis of rent calculation, at least six months from the date of the last such change), the rent may be increased to accord with the new basis of rent calculation as from the specified date without further notice under this

section.

(3) The rent payable under a residential tenancy agreement may be reduced by mutual

agreement between the landlord and the tenant.

(4) A reduction of rent may be made on a temporary basis so that the rent reverts to the

level that would have been otherwise applicable at the end of a specified period.

(5) If the rent payable under a residential tenancy agreement is increased or reduced under this section, the terms of the agreement are varied accordingly.

(6) This section does not affect the operation of a provision of a residential tenancy agreement under which the rent payable under the agreement changes automatically at

stated intervals on a basis set out in the agreement

If you require further clarification on this please call Sharna on 8362 8888