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9 Tips For Negotiating A Rent Increase
●August 9, 2021●5 minute read
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More Australians are renting than ever before thanks to the increasing cost of home ownership in the country.
According to the Australian Institute of Health and Welfare, 2.6 million Australian households are renters with 2.1 million renting from private landlords.
However, with property prices rising at a record rate, Australian renters are facing the biggest rent price increases in 12 years. Unfortunately, it’s not an uncommon scenario for landlords to raise the rent.
Fact is, landlords are not obligated to negotiate increasing the rent, but that doesn’t mean you’re out of options. To help you out, we’ve put together ten tips for negotiating the best outcome if you are hit with a rent increase.
10 Tips for Negotiating a Rent Increase
1. Understand your rights
As a tenant, you have certain rights which are protected by legislation in your state or territory. In most states of Australia, the landlord or agent will give you a copy of a ‘renting guide’, which outlines the legal implications and general rules of your rental agreement. It’s important to review this along with your lease agreement.
If you are hit with a rental increase, ensure the agent has provided a written notice before increasing the rent. As specified in your lease agreement, a rental increase will normally require a minimum notice period that clearly identifies the amount of the increase and when it will be payable.
If you have not been given the correct notice of a rent increase, then you are not required to pay it and you can send them a letter explaining why you disagree with the notice. It’s recommended you keep a copy of the letter and the notice as evidence.
A handy tip!
If you need help putting together a letter, you can find letter templates at tenantsqld.org.
2. Do your research
It pays to check what neighbouring apartments or homes are renting for. There’s a reason why your landlord requires a boost in rent, and it often ties into market rental increases in the area.
If you are negotiating the increase, it’s a good idea to conduct your own research and make a case for yourself by presenting numbers. Obtaining evidence will go a long way to support your claim on why the rental increase is unrealistic or unfair.
It’s also helpful to check out how long the house or apartment you are interested in has been on the market. This way you get a feel for how motivated the landlord is and how valuable you are as a tenant.
3. Be a good tenant
Believe it or not, landlords will likely want to keep you as a tenant since finding new renters can be costly, time-consuming, and stressful (especially if renovations or upgrades are needed before the property is placed back on the market).
So, if you have a good track record as a tenant who pays the rent on time and has invested in a good relationship with the landlord, then expect easier negotiations where compromise is more likely. It may also show them that you are committed as a long-term renter.
4. Ask nicely
Stay calm and be polite when approaching your landlord and negotiating against an increase. Be straightforward and explain to them:
- Why you aren’t able to afford the rental increase;
- The outcome you want from negotiations;
- What you can afford;
- What conditions you will make if they agree to compromise.
Remember, landlords are humans too and are likely to be understanding and receptive. Negotiating face to face can also help remind them that you are more than a monthly cheque in the mail and that you add value by staying in the community. However, make sure you get any agreement in writing, including how long the agreement will apply for.
5. Raise a dispute
If negotiations break down and you disagree with the legitimacy of the increase, you have the option to raise a dispute or ask for a review. The process differs in each state or territory – below is a list of links to information and resources.
- ACT (ACAT)
- NSW (NSW Fair Trading)
- NT (Consumer Affairs NT)
- QLD (QCAT)
- SA (SA Housing Authority)
- TAS (CBOS)
- VIC (Consumer Affairs Victoria)
- WA (Consumer Protection WA)
If the Dispute Resolution Service is unable to assist or cannot resolve the dispute, you can also contact your local tenancy advice service or a financial counsellor for assistance.
6. Get advice
In each state, there’s a renter’s advice service you can reach out to for information:
7. Have a backup plan
Alternatively, if you can’t settle on a resolution with the landlord, you can either give notice to leave the premises or challenge the terms via the Tenancy Tribunal (or similar) in your state.
A tribunal application is where you will present your argument in a more formal matter. This would require you to provide sufficient evidence that proves why the increase is inappropriate. However, it’s important to note that your ability to pay is expressly ruled out as a factor that the tribunal will consider.
8. Ask for an upgrade
Consider asking your landlord for an upgrade or repair to justify the increase in rent.
If an appliance is on its last legs and you suffer through inconveniences such as faulty taps or broken elevators, then it doesn’t hurt to mention that when it’s time to negotiate your rent.
Presenting a list of necessary improvements could make for an awkward conversation but it’s not a bad time to remind your landlord about any ongoing downfalls associated with the property. In any case, it can show your loyalty since, despite the inconveniences, you’re here to stay.
9. Extend the lease
If you plan to stay put, why not offer to sign a longer lease? It’s an effective tactic that shows your worth because, at the end of the day, a landlord prefers a reliable income rather than a hike in numbers.
It also means you can avoid going through negotiations again in six months’ time since asking for a longer lease can lock in the rate. This might be something to consider if you are happy with your apartment and care about staying in the community.
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Written by Charlotte Monteath
Charlotte Monteath is a Content Intern at Jacaranda Finance. She has a Bachelor of Business Management & Journalism from the University of Queensland.