New Queensland Legislation limits the frequency of rent increases

Posted on 29 Jun 2023 | Source: Residential

On 18 April 2023, the Queensland Government passed legislation to limit rent increases to no more than once every 12 months. These changes will come into effect from 1 July 2023 for all new and existing Queensland tenancies.

Rent increase frequency changes

From 1 July 2023, changes to limit rent increase frequency to once every 12 months will come into effect for all new and existing tenancies.

Any rent increase after 1 July 2023 will only be valid if it has been at least 12 months since the previous rent increase. More frequent rent increases written into tenancy agreements prior to 1 July 2023 will not apply. 

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.

Once these changes come into effect, it will be an offence under the Residential Tenancies and Rooming Accommodation Act 2008 (the Act) to increase the rent more frequently than once every 12 months.

Current rent increase laws continue to apply until the new legislation comes into effect on 1 July 2023.  

Under current legislation, rent may be increased if it has been at least six months since the last rent increase or since the tenancy started.  Learn more on the rent increases page.

In this short 6 minute video, the RTA explains the upcoming rent increase changes and how they will apply to different tenancy scenarios.

If I signed a tenancy agreement before 1 July 2023 agreeing to a rent increase earlier than 12 months, will this still apply?

Rent increases which meet current requirements and come into effect before 1 July 2023 will still apply.

From 1 July 2023, the rent increase frequency changes will apply to all new and existing tenancies. Any rent increase will only be valid if it has been 12 months or more since the last increase. More frequent rent increases written into tenancy agreements will not apply after this date.  

Example 1: Tenants moved into a rental property in December 2022 and signed a 12-month agreement, which included a clause to increase the rent in June 2023. This rent increase still applies because it comes into effect before the 1 July 2023 changes.

Example 2: Tenants moved into a rental property in February 2023 on a six-month agreement which ends in August 2023. In April 2023, the tenants and the property manager agreed to renew the tenancy agreement for a further 12 months at the end of the tenancy. They signed a new lease to start in August 2023 with a $20 rent increase. The new rent amount is invalid because it comes into effect after 1 July 2023 and it will have been less than 12 months since the tenants moved into the rental property and paid the current rental amount.

In this situation the property manager/owner should issue the tenants with a new tenancy agreement which complies with the rent increase frequency changes. This new tenancy agreement will replace the non-compliant agreement. Examples of a compliant agreement in this scenario would be:

a 12-month agreement at the same rent as the original tenancy agreement
a 12-month agreement which starts at the same rent as the original agreement with a clause to increase the rent in February 2024, as this marks 12 months since the tenants moved into the property and paid the rental amount.

Example 3: Tenants moved into a rental property in February 2023 and signed a 12-month agreement, which included a clause to increase the rent in August 2023. This rent increase is invalid because it comes into effect after 1 July 2023 and it has been less than 12 months since the last rent increase. The rent cannot be increased until February 2024.

When new tenants move into a rental property, how frequently can rent be increased?

The rent can only be increased once every 12 months, providing one or more of the tenants continues to rent the property.

Example: Tenants move into the property in July 2023. If one of more of the tenants remain at the property, the rent cannot be increased until July 2024. This applies even if the tenancy agreement is renewed or extended within the 12-month period.

Can the rent be increased earlier than 12 months if the tenants change?

From 1 July 2023, rent may only be increased within a 12-month period if:

there is a new tenancy agreement and 
none of the tenants are the same as those on the previous agreement.

Example 1: Three tenants moved into a rental property in February 2023 on a six-month general tenancy agreement. When the tenancy agreement ends in August 2023, one of the three tenants remains in the property. As one of the tenants is the same as on the previous agreement, the rent cannot be increased until February 2024.

Example 2: Three tenants moved into a rental property in February 2023 on a six-month general tenancy agreement. When the rental agreement ends in August 2023, all three tenants move out. Three new tenants move in and sign a new tenancy agreement. The rent may be increased as it’s a new agreement and none of the tenants are the same as the previous agreement.

Can the rent be increased earlier than 12 months if a new property manager or owner takes over the property?

No. A change of property manager or owner does not impact the 12-month rent increase frequency limit.

Example: New tenants move into a rental property in February 2023 on a six-month lease. In April 2023, the property is sold to a new owner. In August 2023, the tenants and the new owner agree to renew the lease for another six months. The owner cannot increase the rent as part of this agreement as the rent cannot be increased until February 2024.

Will the rent increase frequency changes apply to Queensland Government housing?

No. The rent increase frequency limits will not apply to State tenancy agreements provided by the Department of Housing or employee housing provided by the Queensland Government.

Can rent be increased during a tenancy agreement if it has been at least 12 months since the last rent increase?

Yes, providing all legislative requirements are met.

From 1 July 2023, fixed term tenancy agreements can only be increased during a tenancy agreement if:

it has been at least 12 months since the tenancy started or since the last increase
the agreement states the rent will be increased
the agreement states the new amount (or how it will be worked out)
the property manager/owner gives the tenant at least two months written notice for general tenancies and four weeks written notice for rooming accommodation.

From 1 July 2023, rent can be increased for a periodic agreement if it’s been at least 12 months since the last increase and the property manager gives the tenants at least two months written notice for general tenancies and four weeks written notice for rooming accommodation.

When should the property manager or owner tell tenants if they are increasing the rent when they renew or extend a tenancy agreement?

Rent can only be increased once every 12 months, but it’s good practice for the property manager or owner to give the tenant as much notice as possible.

Example: Tenants moved into a rental property on a 12-month lease in August 2022. The tenant and the property manager want to renew the lease for another 12 months when the tenancy ends in August 2023. The property manager wants to increase the rent by $10 a week. The rent increase cannot be applied until August 2023, but the property manager can tell the tenant they intend to increase the rent earlier.

If one or more tenants remain at the property when a tenancy is renewed, but they are listed as approved occupants on the new agreement, can the rent be increased more frequently than once every 12 months?

No. It is an offence for any individual to enter into an agreement or arrangement with the intention of defeating, evading, or preventing the operation of the Residential and Rooming Accommodation Act 2008 (the Act). Therefore, if one or more tenants from a previous agreement remains living at the property and the property manager/owner has intentionally not listed them as a tenant on a new agreement to facilitate a rent increase prior to once every 12 months, this is an offence under the Act.

Where can I read the legislation about the new rent increase frequency changes?

The rent increase frequency changes were introduced under the Local Government Electoral and Other Legislation (Expenditure Caps) Amendment Bill 2022. The Queensland Government also released explanatory notes about the rent increase frequency changes.