Rental Increase Twice in a Year - What Should I Do?

Tldr on 11/07/2022 - 10:31
Last edited 13/07/2022 - 10:12

Ok, so I know there has been a lot of inflation and the rental market has been crazy. But lets start from scratch.

I stay in NSW, Sydney City area. Started renting my property @ $625/week and signed a contract for 6 months.

Fast forward six months, rents were decreasing like crazy in Covid so asked for a revision, and it came down to $600 even though properties in the same apartment were going for $550ish.

Jan 2022, I get notified that my rents are going to increase to $675 (yes, from $600 to $675).I negotiate and the landlord refuses to step down below $660. The same building, prices were $625ish back then.

The property manager tells me that you will not have to sign a lease, so I agree with the $660 price and go ahead and lock that in. After 2-3 days, I get a call and the property manager tells me that a new lease will have to be signed as there were some confusions. I sign the lease. (10% increase)

Now with the lease expiring in Sept, I have already been notified of a rental revision from $660 to $775 (18% increase in 6 months ) - turns out to be a 30% increase from March 2022 when I was paying $600.

We really like the apartment we are at as it is close to work and the city. A friend of mine lives in the same building, one level down and is currently paying $600 (similar layout)

My questions are:

  • Can the landlord increase the rent twice within the same year? (I have tried to Google this but not too sure about the answers)
  • Do you think I should move out ?
  • Is approaching the rental tribunal a good idea?

TL;DR : An increase of 30% in rent from what I was paying 6 months ago, should I continue, what are my options?

UPDATE:
I have heard back from the REA that the owners have decided to withdraw from the price increase due to the rule that they cannot increase the rent more than once in a 12 month period. Now I'm worried I'm going to be served with an notice to vacate the property as soon as my lease expires. Apparently for that to happen, its only a 30 day notice.

Home & Garden

Comments

    • Tldr on 11/07/2022 - 10:46

      thanks, I found this page today morning, given my story above, I'm assuming mine is periodic agreement as opposed to a fixed-term, but I'm not too sure.

      Periodic agreements

      If the agreement does not specify a fixed-term or if the fixed-term period of the tenancy agreement has ended and the agreement is on a continuing (periodic) tenancy, then rent can only be increased once in a 12-month period.

      The landlord must also give the tenant at least 60 days written notice before the increase starts.

      This also applies where the tenancy is renewed.

      • boomramada on 11/07/2022 - 10:47

        Well your options are to check the comparable properties that on rent within the area, if its within that. Bad luck. Since you on the short term contract.
        Its gonna go up even more due to cost of living / Interest rate increases.

      • Bigboomboom on 11/07/2022 - 11:03

        No, you are on fixed term as you said it's 6 months contract. Periodic is more like month to month.

      • Tech5 on 11/07/2022 - 11:48
        +1

        You are on a fixed term.

        Periodic is what you end up on if you don't sign the lease renewal and they say nothing. You then automatically move onto month-month (periodic)

        • xylarr on 12/07/2022 - 12:08

          I once got a rent rise that I though was unreasonable.
          I got all prepared to go nuclear. As part of that I found on some NSW government website a place where you can find average rents for various property types by postcode. It also showed historical rents so you could track trends.
          It was then that I discovered the rent rise proposed was exactly the average percentage rise for similar properties in the area.
          I paid up.

  • bobbified on 11/07/2022 - 10:44
    +14

    I'm sure you signed a short lease to keep your options open.. but it's a two way street. Why didn't you sign a longer lease at the start if you liked this place so much?

    Anyhow, this landlord/agent sounds like they'll just keep increasing the rents to the maximum they can get. It's probably best to move out now to one of those apartments that you mention in the same building if you like that location so much.

    • lgacb08 on 11/07/2022 - 11:07
      +1

      He's on the open end contract so periodic term apply, so landlord can only raise the rate once in 12 month, so depending on the situation 6 months ago he might be able to fight the increase. Worse case is voting with your feet, which he should do at the moment but too emotionally attached to act.

      • bobbified on 11/07/2022 - 11:10
        +1

        It sounds like he's on a 6 month lease, then on a periodic and then on trying to get back on a new lease with the increase each time being between switching. I think they can up the the price at each 'change'.

  • Xistn on 11/07/2022 - 10:44
    +8

    I'd just move, or buy.

    • netjock on 11/07/2022 - 10:54
      +4

      I'd just move

      OP should have moved in the same building. Usually not a problem if there is a dedicated goods lift. Keep one out on the same floor or floor above / below. One of the best thing about apartments especially the cookie cutter ones.

  • AustriaBargain on 11/07/2022 - 10:46
    +1

    Should have signed a longer lease.

    • Tldr on 11/07/2022 - 10:54
      +1

      going back in time, I would have. But the LL wanted $675 for a 1 year lease vs $660 for on-going

      • SF3 on 11/07/2022 - 11:18
        +3

        ^Sound like Term deposit/Fix Term vs Viable interest rates.

  • mshanann on 11/07/2022 - 10:54
    +22

    My guess is the landlord has a big loan and those recent interest rate jumps have pushed his/her loan repayments to levels they cannot absorb. Find somewhere else to live that is cheaper or negotiate a longer term lease at a fixed rate that you are comfortable with.

    • Muzeeb on 11/07/2022 - 10:56
      +1

      I'm guessing you're correct

      • Tldr on 11/07/2022 - 11:15

        yeah, nah!

      • HelpMeiCantSee on 12/07/2022 - 09:51

        Communism wouldn’t allow such an outrage. When will people learn!

        • lew380 on 12/07/2022 - 18:49
          +1

          Yes, in communism, you even get access to your neighbours apartment for FREE when they starve to death first. Now thats living!

          • Yola on 18/07/2022 - 17:05

            @lew380: or get carted off to the Gulag.

  • [Deactivated] on 11/07/2022 - 10:56
    +2

    you should just move, they don't appear to be breaking the lease agreement or doing anything they can get in trouble for, although saying you won't have to sign a lease and then saying you will have to is a bit dodgy, but the landlord can charge what they want, it's their apartment.

  • tsunamisurfer on 11/07/2022 - 10:58
    -5

    Can the landlord increase the rent twice within the same year? (I have tried to Google this but not too sure about the answers)

    It's his house of course he can increase rents when the contract is renewed.

    Do you think I should move out ?

    Yes.

    Is approaching the rental tribunal a good idea?

    For what? What has anyone done wrong?

    You gotta love Renters. Happy to ride the market rate and demand a reduction when it suits them, when the market goes the other way TRIBUNAL!

  • caramellokoala on 11/07/2022 - 11:05
    +14

    You should leave immediately.

    Obviously the clown who owns the property is over leveraged and can't afford the increased mortgage payments. Instead of selling he is making you pay for his poor investment choices by is directly passing the interest rates to you and will continue to do so as rates go up.

    Unless you want to cycle to continue over the next few years until rates even out I would be searching for a new rental immediately.

    • sparkles on 11/07/2022 - 11:51
      +3

      I kind of agree, there's a theme happening and the increases will keep happening. Maybe they are trying to price OP out so they can sell with vacant possession?

    • kizzaaa on 11/07/2022 - 13:38
      +4

      I agree, moving is the best option. Was in a similar situation a few years ago and moved — very happy with the outcome.

      • xylarr on 12/07/2022 - 12:09

        He will probably lose more money while the place is unrented. And then he has to find a tenant that will pay the inflated price.

  • Dumax on 11/07/2022 - 11:09
    +2

    Best to speak with the tenants union regarding this but my read of NSW Fairtrading would be (IANAL):

    • Once your agreement expires they would be unable to increase your rent for 12 months since it was previously increased in Jan 2022
    • The only way around this would be to have you sign a new fixed term agreement once your current one expires - however they can't force you to sign, but there is a risk that they will give you notice
    • Tech5 on 11/07/2022 - 11:49

      In regards to your first point, this is not true.

      It applies to if he was already in a expired agreement (and therefore on a month-month). They have yet to increase his rent while in a periodic.

      • Dumax on 11/07/2022 - 14:01

        if the fixed-term period of the tenancy agreement has ended and the agreement is on a continuing (periodic) tenancy, then rent can only be increased once in a 12-month period.

        If that is true, then it's not clearly outlined. The website doesn't include any qualification that the 12 month period would only apply after the lease becomes periodic.

        • Tech5 on 11/07/2022 - 18:33
          +1

          Well I mean that is the plain English reading of what you just quoted.

          The two conditions are
          1. If FT period ended
          2. Periodic tenancy has started (which means either agreed month to month, or no contract signed)

          THEN

          1 rent increase every 12 months.

          Also if you check the other sections - rent can only be changed after fixed term is complete. A lot of people are on 6-month fixed term leases. I have been many leases increase twice a year

    • redforever on 11/07/2022 - 12:39

      It appears that op has already signed a new6 month fixed term lease in January this year.

      • kiitos on 12/07/2022 - 08:06

        I don't understand what op meant by saying he was paying $600 in March?

  • CyberMurning on 11/07/2022 - 11:20
    +2

    ask RBA what you should do….

    • DarkOz on 11/07/2022 - 11:53
      +1

      Philip said no increase until 2024.

      • AdosHouse on 11/07/2022 - 15:15
        +2

        He said no such thing. "The Board does not expect these conditions to be met until 2024 at the earliest.”. Well the conditions were met earlier, but he never promised it wouldn't rise earlier.

        • TilacVIP on 12/07/2022 - 10:46
          +1

          Good to see that there are some people in this country who understood what Phillips said.

          • AdosHouse on 12/07/2022 - 16:43
            +1

            @TilacVIP: People love to blame others for their mistakes, because then they don't have to realise how foolish they were.

            The amount of people that raced in to do the single biggest financial decision of their lives with doing any proper financial research is incredible. It was said a million time, lowest interest rate in Australia's history. It is completely obvious that it will not stay there, it cannot go anywhere but up.

  • holdenmg on 11/07/2022 - 11:22
    +2

    These boots are made for walking…

  • geek001 on 11/07/2022 - 11:41
    +10

    I would probably just start looking for other apartments for rent within the same building. If you do have to move, it would be easier than moving somewhere else. Also, the rent increases maybe an empty threat, if you do move out, leaving the apartment empty for even a week will take a while for the landlord to claw back the difference.

    • Tldr on 11/07/2022 - 11:56
      +4

      ^^ This, I told this to the property manager last time when the rentals were increasing, and he agreed to me… For a difference of $20-30, leaving the apartment empty for a couple of weeks will take a looong time for the LL to get back even. Add in costs of the agents.

  • DarkOz on 11/07/2022 - 11:55
    +4

    I would definitely move. Especially when OP sounded like he could easily find a comparable place for much less.

  • FreeUyghur on 11/07/2022 - 12:06
    +1

    suburb name please

  • narbe on 11/07/2022 - 12:17
    +2

    Seem likes the norm.

    I moved to another rental 6 months ago.

    My rent went from $600 to $880.

    5 bedroom, 4 bathroom.

    Went to a 4 bed 2 bath, for $630.

    Brand new house to 30year old house.

    That's just the market and this was before the interest rate rise.

    Also the place got rented within a week.

  • OzRolla on 11/07/2022 - 14:43
    +5

    I'd leave ASAP. Sounds like there's plenty of alternative apartments nearby to you that are cheaper. No brainer really.

  • Tldr on 11/07/2022 - 16:59
    +3

    Thanks guys, I have spoken to the property manager and it looks like he doesn't know about this new rule, however, he is very kind to be checking the new laws and will update back soon.

  • Webber000 on 11/07/2022 - 18:04
    +3

    Move to another apartment in the building. If ones not available yet then maybe you can not sign the lease and not say anything and just go month to month and hopefully find an apartment comes up next month.
    Basically move now. You should have moved last time he tried it. He's going to charge more again next renewal. This guy doesn't value a good tennant.

  • MontyMacaw on 12/07/2022 - 08:10
    +2

    I remember being mocked on here for suggesting that rents would rise when the market settled down and interest rates rose. And here we are. Some smart arse said that the market will set the rent not the greed of landlords that will have anything to do with it. It’s time to find rentals with long leases and locked in rents. Thank me later.

  • HelpMeiCantSee on 12/07/2022 - 09:42
    +2

    First things first, it’s the real estate agent pushing for the increase, not the landlord. REA are the true scum.

    • Tldr on 12/07/2022 - 09:53
      +1

      I dont think that's the case, he told me upfront that I have been a long-term tenant and the increases are crazy but , but the owners want him to push the rent.

      • HelpMeiCantSee on 12/07/2022 - 09:56
        +2

        I’ve had many REA say the same to me, but when I actually met the owners they said they were happy with the rate but the REA pushed and said oh you can get $70,$80 more, and heavily pressured them.

        Never forget, REA are not your friends- ever.

  • LFO on 12/07/2022 - 11:18

    Rental Increase Twice in a Year - What Should I Do?

    The best option it to seek longer leases so as to lock prices and conditions.

    Disclaimer: not legal advice … really …

    • JaneSong on 13/07/2022 - 12:00

      No way. Rents are coming down. Take a look at domain.com.au

  • jrvb42 on 12/07/2022 - 12:52

    Interest rates rise twice in a year (actually twice in two months). What should property owners do?
    Honestly, you always have the choice to move, but I suspect you're on a good deal or can't find something better.
    This is called life.
    Be grateful the landlord can't change your rent as often as banks can change interest rates.

    • Tldr on 13/07/2022 - 10:14
      +1

      IMO, 30% is wayyyy too much - were the rates increased by 30% ? NO.

  • Tldr on 13/07/2022 - 10:12
    +2

    Update
    I have heard back from the REA that the owners have decided to withdraw from the price increase due to the rule that they cannot increase the rent more than once in a 12 month period. Now I'm worried I'm going to be served with an notice to vacate the property as soon as my lease expires. Apparently for that to happen, its only a 30 day notice.

    • kittymtd on 14/07/2022 - 08:30

      Thanks for the update! My 6 month lease is ending in September after having had a rental increase in March so I was wondering how this rule would be applied. Good to know.

    • lgacb08 on 14/07/2022 - 13:40

      Don't think you should worry too much, in this climate of rising rate renters in major cities are holding landlord by the ball. If he can't afford the rising repayments shopping around for tenants who can pay more is not a wise choice after all. The amount of rental available on the same building will speak for itself.

    • Webber000 on 14/07/2022 - 17:10

      Owner is probably planning to issue you with a very big rent increase when your 12 months is up more than they are thinking to issue you notice to leave - but either way I would be keeping an eye out for somewhere to move to when your contract is up as I would be planning to move before they give you the notice or rent increase again! You've already said there are other units in the same building much cheaper - one will come up.

  • JaneSong on 13/07/2022 - 11:57

    Where are you living?

    Rents have been collapsing in Sydney. Lots of properties that were previously empty are coming onto the rental market as the interest rates rise.

  • JaneSong on 13/07/2022 - 12:03
    -1

    You know I decreased my rent for a 2 bedroom apartment from $420 to $320 a week and no one is biting.

    Rents have dropped from around $450 a week to $290 on average. I'm not sure what area rents are rising, maybe it's just some dodgy landlords that are taking advantage of lazy renters that don't want to move during covid.

    Seriously, it's no big deal to tell us the suburb next door to where you live.

  • aaron1988 on 17/07/2022 - 16:05

    Always ask for the price before u start.
    If not, it’s ur fault. Pay or move out.

    By ozbargainer style.

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