Your rent questions answered: The rules of rent in arrears and excessive rent increases

by The FindLaw Team

Rent, not just a musical but a way of life for many Australians. Now that the “humorous” part of this piece is over and done with, there are many rules associated with rent that this piece will strive to cover. Feel free to read this piece in a singsong voice if you want (sorry, that’ll be the last “joke”).

Paying rent

Tenants should generally be provided with at least one method of paying rent that does not incur any costs. Aside from any bank or account fees that are payable via the tenant’s transactions. The method should also be reasonably available to the tenant.

Rent receipts

For any rental payments made in person and not by cheque, a rental receipt must be provided. If rent is paid by cheque, the person who received the cheque must allow a receipt to be available for collection by the tenant. Otherwise, the receipt should be posted to the tenant’s address.

The details of the rent receipt should include the following:

  • the name of the person who received the payment or on whose behalf payment is received;
  • the name of the person paying rent or on whose behalf it is paid;
  • the address of the rental property where rent is being paid;
  • the date of payment;
  • the amount of rent paid.

 

Overdue rent

If a tenant is 14 days behind with their rental payments, the landlord may issue a 14-day notice of termination of the rental agreement.

For tenants who find themselves behind in paying rent, contacting the landlord to negotiate a way to pay money owed may be a sound course of action if there are good reasons for rent being in arrears, and the chances of future failure to pay rent on time are minimal.

In the event that the landlord chooses to make a non-payment termination notice, the tenant must be informed that they are not compelled to vacate the premises if all rent owing is paid or the tenant has entered into, and is complying with a repayment plan reached in agreement with the landlord.

Landlords also have the option of making an application to the relevant state or territory tribunal seeking a termination order prior to the termination date, as outlined in the non-payment termination notice. However, it is important to note that landlords are not able to seize the possessions of tenants as security pending payment of rent owed.

Rent increases and reductions

Generally speaking, landlords cannot increase rent during a fixed term period less than two years, unless the agreement allows for such an increase. Additionally, 60 days’ written notice also needs to be provided to the tenant. However, there may be no limits on how many times rent can be increased.

For fixed term agreements that are at least two years in duration, the landlord cannot increase rent unless 60 days’ written notice is provided, and there may be no increase of rent more than once during a 12 month period. Furthermore, for fixed term agreements at least two years in duration, the tenant may provide a 21-day termination notice citing an increase of rent as grounds for termination of the agreement. The termination notice can include a date before the end of the fixed term agreement, and that the tenant may not be liable for compensation or any additional amount for early termination of the agreement.

In relation to agreements that become periodic, any rent increases must be accompanied with 60 days’ written notice. Failure to provide notice to the tenant, may not be binding and the tenant may potentially be reimbursed for any paid amount.

In situations where the tenant believes that the rent increase is excessive and beyond market rate, they may be able to negotiate with their landlord for a more acceptable amount. However, if the landlord is not prepared to compromise, the tenant may apply to the relevant state or territory body within 30 days of receiving notice for an order stating that the rent increase is excessive. The body may make an order that the rent increase is excessive, and issue an order that the increase may not exceed a specified amount. Alternatively, if the tenant is unsuccessful, they may be liable to pay the new amount after 60 days of receiving notice.

Tenants may issue a written request for a reduction in rent if there has been a reduction in goods, services or facilities that were formally provided. Requests for rent reduction can also be made during viewing by prospective buyers as well.

For rental properties that become partially or wholly uninhabitable or unusable where neither party is responsible for the circumstances, or the premises becomes legally uninhabitable, rent may be abated in such a situation.

Some of these laws relating to rent may differ between the jurisdictions. So always make sure that the right rules apply for your state or territory.



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