Disputed rent increase

Question from Danella updated on 29th June 2012:

Tenants on a periodic tenancy were issused with a notice of increased rental as per the Residential Tenancies Act. More than 90 days notice was given. There has been no rental increase in the past year and the new amount is below current market rental. Nothing was heard from the tenants until a week prior to the date of increase taking effect when they said they did not agree to the increase. We have doubts they will now pay the increased ammount. I believe we can issue a notice of breach of agreement once the rent is at least one day in arrears but I imagine they will say they do not have an agreement to pay increased rent. Where do we go from here? Must they actually agree to the increase? What happens if they do not pay?

Our expert Megan Martin responded:

Under the Residential Tenancies Act 1986, landlords may increase the rent for a periodic tenancy by giving the tenant at least 60 days’ written notice of the increase. The written notice of the increase must specify the amount of the increase and the day it takes effect. Rent increases may not be given within 180 days of the start of the tenancy or of any previous rent increase. As long as notice of the rent increase is given correctly, the tenant’s consent to the increase is not required (although the tenant can apply to the Tenancy Tribunal if they consider the increased amount significantly exceeds market rent). If the tenant does not pay the increased amount on the date the increased rent is due, they will be in breach of their obligation to pay their rent as and when it is due. The landlord may issue the tenant with 14 days’ written notice to remedy the breach. If the tenant does not comply with the notice, you can apply to the Tenancy Tribunal to have the matter resolved. Notice of the rent increase and any notices to remedy must be in writing so you will need to allow the correct time for the notices to be properly serviced. You should also keep a copy of the notices for yourself. A template for 14 days’ notice and information about service times can be found on the Department of Building and Housing’s website (www.dbh.govt.nz). To discuss your situation further, or for information about applying to the Tenancy Tribunal, you can visit the Department’s website (as noted above), or call 0800 TENANCY (0800 836 262).

The Ministry of Business, Innovation and Employment provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.

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