Rent increases are inevitable. Every landlord has the right to conduct periodic rent review but it is not entirely discretionary. There are well defined rules that restrict when, how and by how much one can review or increase the prevailing rent.
The landlord, the property manager of the landlord or the real estate agent would provide a written notice laying out the details of the increase including the date from which the new rent will be in effect. Rent review is permissible per the tenancy laws, however, it cannot be arbitrary.
Rent review can be done per the tenancy laws or the terms of the tenancy agreement. The type of lease one has will determine the nuances of the process. If the lease is for a fixed term, say six months or a year, the rent review will happen only when the term is over or just when it is about to be over. In other words, a rent increase can come into effect from the seventh month or the thirteenth month, obviously subject to renewal of the lease. The notice for this rent increase must be provided at least sixty days in advance. It could be sooner but not later. The tenant has the right to negotiate or choose to look for another rental property.
For any lease agreement that is for a period of twenty-four months or more, the rent review can happen only once in twelve months. If it has happened once in the first twelve months, then it can only happen once again in the second twelve months. For period lease agreements, which may not have any fixed term, rent review can happen at any time but not without the notice period of sixty days. If the lease agreement is for a fixed term of two years or less then the rent review is at the end of the term or once in the twelve-month period, whichever is sooner but again with sixty days’ notice.
The notice should mention the increase in rent, the date from when it will be in effect, any cool off period and if there are any other changes in the way the rent would be paid. If the landlord doesn’t follow the right process or fails to provide the necessary notice, then the tenant is not legally required to comply with the rent review or rent increase.
