Rent increase for fixed-term tenancy?

Question from Susanna updated on 12th October 2012:

One of our tenants signed a fixed-term tenancy agreement for two years. Is it okay to increase the rent now and give them 60 days notice. Am I breaching the law?

Our expert Juliet Robinson responded:

The Residential Tenancies Act states in section 24(g) that a landlord under a fixed-term tenancy may not increase the rent during the term of the tenancy “unless permitted by the provisions of the tenancy agreement to do so”. So, if your tenancy agreement has a provision explicitly allowing you to raise the rent during the tenancy, you can do so. If not, then you can’t. You may find that waiting until the fixed-term tenancy has ended and then offering renewal of the tenancy at a specified rent (the new amount) is a more consultative and pleasant way of increasing the rent by agreement. If the tenant decides not to renew, you will have time to start advertising for a replacement tenant. In this instance you will have a normal end to a tenancy and none of the stress that comes with a disputed rent increase.

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