Host: Belinda Heit – Communication and Education – RTA

Guest: Sam Galer – Housing Legislation Amendment Team – RTA 

Host: Welcome to the Talking Tenancies Podcast, brought to you by the Residential Tenancies authority. I'm your host, Belinda Heit. Join me as we explore everything you need to know about renting in Queensland, with experts from the RTA and industry. We're here to help make renting work for everyone. From 1 July 2023, changes to limit rent increases frequency to once every 12 months will come into effect for all new and existing tenancies. Today's expert from the RTA is Sam Galer. Welcome, Sam. Now, can you tell us about your role at the RTA and what you're responsible for? 

Guest: Yeah, certainly. So, my current role at the RTA is the Principal Project Officer for the Housing Legislation Implementation group. It's a bit of a mouthful, but essentially, I am working on a project around the changes coming up for the legislation. 

Host: And you're a busy man and I know that for sure. Now, can you tell us what's changing around rent increases? 

Guest: Yeah, certainly. So, a bit of background. The QLD Parliament passed legislation to limit rent increase frequencies to no more than once every 12 months. Previously it was no more than once every six months. It's now been extended to 12 months. This legislation comes into effect from 1st of July 2023 (so this year) and will apply to all new and existing tenancies. Until that legislation is amended though, the current rules around rent increases will continue to apply. Until the 30th of June, rent may be increased if it's been at least six months - that's the current legislation. So, six months since the last rent increase or since the tenancy started, but any rent increase after the 1st of July 2023 will only be valid if it's been at last 12 months since that rent was payable.  

More frequent rent increases than written into tenancy agreements prior to the 1st July 2023 will not apply, and I'll talk through some of how the legislation will apply in some different scenarios through this podcast. But from the 1st of July 2023, it's really important to note that it will be an offence under the Residential Tenancies and Rooming Accommodation Act 2008 to increase the rent more frequently than once every 12 months. 

Host: That's pretty clear. So, if a tenant signed a tenancy agreement before 1 July 2023 agreeing to a rent increase earlier than 12 months, will this still apply?

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Guest: It's a really good question and we're hearing quite a lot of these different scenarios. So rent increases which meet the current requirements as they are prior to the 1st of July 2023 will still apply. But from the 1st of July 2023, those rent increase frequency changes will apply to all new and existing tenancies. So, it's across the board. Any rent increase will only be valid if it's been 12 months or more since the last increase or that rent was payable. Even if it's written into a tenancy agreement that the rent will be increased more frequently, that will not be able to apply after this date, and I'll give you an example. So, a tenant moves into a rental property in February 2023. And they signed a 12 month agreement which includes a clause to increase the rent after six months, which would be in August 2023. So, this rent increase is invalid under the new legislation because it comes into effect after the 1st of July 2023.At that point, it will have been less than 12 months since the last rent increase, so in this scenario that I've given that the rent would not be able to be increased until February 2024. 

Host: OK, got it. So, what happens if a tenant has already signed a tenancy agreement which starts after 1 July 2023 and it does not comply with the rent increase frequency limit? 

Guest: Yeah. So, in this instance, the tenant and the property manager should really speak to each other as soon as possible, because if they've signed a rental agreement, it's due to start after 1st of July 2023 and doesn't comply with that new rent increase legislation. In this situation we would recommend that the property manager or the owner issue the tenants with a new tenancy agreement which does comply with the rent increase frequency changes with the 12 month time frame. That new tenancy agreement would replace the previous agreement, which was going outside of this rental increase legislation. 

Host: So, can the rent be increased earlier than 12 months if a new property manager or owner takes over the property? 

Guest: No, it actually can't. So, a change of property manager or owner does not impact the 12-month rent increase frequency limit. So that 12-month limit will apply even if the property is sold to a new owner, providing at least one of the previous tenants remains at the property. 

Host: So, do the rent increase rules apply if new tenants move into the property? 

Guest: The rent increase frequency changes apply for the duration of the tenancy if at least one tenant or resident is the same when the agreement is renewed. From 1st of July 2023 the rent can only be increased within the 12-month period if there's a brand-new tenancy agreement and none of the tenants are the same as those on the previous agreement, so it's got to be a completely new tenancy. 

Host: So, a clean slate, that's really the only time. 
 
Guest: Yeah. 
 
Host: So, can rent be increased during a tenancy if it has been at least 12 months since the last renting? 

Guest: Yes, it can. There are some legislative requirements around that, so notice periods that need to be given, and you know, making sure that that it's clear within the tenancy agreement. But from 1st of July 2023, rent for fixed term tenancy agreements can only be increased during that tenancy agreement if… so, first point is that it needs to have been at least 12 months since the tenancy started, or since the last increase, or since the tenants first moved into that property and started paying rent. The agreement needs to state that the rent will be increased. The agreement needs to state the new amount or how it would be worked out, and the property manager or owner needs to give the tenant at least two months written notice for general tenancies and four weeks written notice for rooming accommodation.  

The reason for that is that it's all very well having things written into a tenancy agreement, but if something's not going to come into effect for a few months, then obviously we're not going to rely on everyone having memorised their tenancy agreement and knowing when the new rent dates going to come in. So that's where that notice period of two months for general tenancy is really important - just to remind people that is coming. From 1st of July 2023, rent for a periodic agreement can be increased if it's been at least 12 months since that last rent increase or, since the tenants first moved into the property and started paying rent. The property manager again needs to give the tenant at least two months written notice if it's a general tenancy or four weeks written notice for a rooming accommodation. 

Host: OK. So how much can rent be increased by and what can tenants do if they feel a rent increase is a bit excessive? 

Guest: OK, so the amount that rent can be increased by. So, the act doesn't specify how much rent can be increased by. The RTA doesn't have a position on how much rent should be. But the point you make about what a tenant can do if they feel a rent increase is excessive is a really important one.  

In the first instance, we're always going to promote that self resolution and communication between the parties. The relationship in a tenancy agreement is really important, so, discussing their concerns with the property manager or owner in the first instance. Now, if after that conversation the tenant still feels that the increase is excessive and it's going to go ahead, they're able to request free dispute resolution with the RTA once they sign that new agreement. They need to be able to sign the agreement to be able to dispute the terms within it. And just a quick point on dispute resolution with the RTA. In the 2021-22 financial year, the RTA actually resolved 76.3% of all disputes where parties volunteered to participate. And it is a voluntary process. But it is a very successful process to try and resolve some of these issues.  

Now, if the tenant and the property manager or owner after that dispute resolution are still unable to reach an agreement, either party may apply to the Queensland Civil and Administrative Tribunal for a decision. So, generally with a rent increase, it's the tenant who feels it's excessive so they would be the one to apply to QCAT. QCAT can then consider the following points. There are a few points in the legislation when talking about proposed rent increase. One of those is they can look at the range of market rents usually charged for comparable properties. They will look at the difference between the proposed and the current rent. They may look at the state of repair of the property, how long the tenancy's been going, so, the term of the tenancy. They can look at the period since that last rent increase, if any, and anything else that QCAT considers relevant - that last point obviously leaves it a bit open for them.  

The RTA does have several helpful tools and resources designed to assist tenants and property managers or owners in identifying what might be a reasonable rental market price, so that includes tools such as a median rents quick finder which is able to be used so you can search for median rental prices, and you can do that for specific dwelling types. You can do that by postcode, so you get an idea of what the median rent is for that kind of property in that area. And we also have median rent quarterly data. This is done by the local government area post code or suburb and they're available on our website.  

Tenants do also always have the option to call the RTA if they have any questions or if they just need to talk through their situation in in a little bit more detail. So, really helpful staff working for the RTA, obviously other than me, but they're available five days a week from. 8.30am till 5.00pm and that's on 1300 366 311. 

Host: Now if someone's listening and has questions, or would like to find out more about how the limit to rent increased frequency will impact them, where can they go? 

Guest: The best place to start is the RTA website, there's a lot of information on our website about the changes, including plenty of examples, frequently asked questions, and there's also a short explainer video about the changes. And as I said before, they can also contact us on that 1300 366 311 number if they need to talk through their individual situation. 

Host: And lastly, any final tips from you, Sam? 

Guest: I think just it's important to note, we do hear a lot from the rental sector obviously and we're aware of the pressures of the current rental market for all sides. I think when we're looking at things like increasing the rent and obviously this legislation coming in it's really important we do hear a lot from property managers and owners just recognising the value of having good tenants who you know, reliably pay the rent and look after the rental property. And then obviously, it’s important I think for tenancies to continue where possible if that relationship is good. You weigh that up when you're looking at increasing the rent, as people would know, with the costs of readvertising and various fees and possibly the property being vacant for a while. We would encourage people to just make a balanced decision in that kind of area. 

Host: Yes, having a great tenant and having a great relationship with them is very valuable. Well, thank you Sam for helping us to get a great understanding on what we need to know when it comes to rent increases and their frequency during a tenancy in Queensland. 

Guest: My pleasure. Thank you. 

Host: Thank you for listening to the Talking Tenancies podcast. For more information about the Residential Tenancies Authority, visit rta.qld.gov.au.