New rules for rent increases
The Government announced a rent increase freeze as part of the COVID-19 response. The freeze applied from 26 March – 25 September 2020. Rent increases can take effect from 26 September 2020.
On 12 August 2020, a new law came into effect limiting rent increases to once every 12 months.
Find out more about the rules around rent increases below.
When can rent increases take effect?
Rent increases can take effect on or after 26 September 2020.
If the landlord gave notice of the rent increase on or after 12 August 2020, the rent increase can only take effect at least 12 months after the last increase.
If the landlord gave notice of the rent increase on or before 11 August 2020, the rent increase can take effect as long as it has been at least 180 days since the last increase.
Rent increases can only take effect if the landlord gave the tenant 60 days’ notice of the rent increase.
Work out how the rent rules apply to your tenancy
Where do the new rules about rent increases come from?
Recent changes to the Residential Tenancies Act 1986 mean that landlords can only increase rent once every 12 months.
The recent changes to the Residential Tenancies Act 1986 also include banning landlords from inviting or encouraging rental bidding. This rule will come into effect on 11 February 2021.
The Government introduced a rent increase freeze in March 2020 under the COVID-19 Response (Urgent Management Measures) Legislation Act 2020. This legislation made it an unlawful act for landlords to increase rent from 26 March 2020 to 25 September 2020. Any rent increases issued during this period can only come into effect from 26 September 2020.
How much can rent be increased by?
The Residential Tenancies Act 1986 does not limit how much landlords can increase rent by.
If a landlord is charging significantly more than is being charged for similar properties in the area, the tenant can apply to the Tenancy Tribunal for a rent review.
During these difficult times, we encourage landlords and tenants to work together in good faith, take care of each other, and try to come to an arrangement that suits both parties.
What should tenants do if they are having difficulty paying rent?
Landlords and tenants should talk to each other in the first instance if there is a problem with the tenancy, including rents. More information about negotiating rent for landlords and tenants on the Tenancy Services website.
If tenants need support with their housing costs or if they are getting behind with rent, Work and Income may be able to help.
Tenants don’t need to be on the benefit to get support – it depends on their situation, income and needs. Support that tenants might be eligible for includes the Accommodation Supplement, or Rent Arrears Assistance.
Tenants can find more information and apply for support with housing costs through the Work and Income website. Or tenants can call:
- 0800 559 009
- 0800 552 002 if they get NZ Super of Veteran’s Pension
- 0800 889 900 if they’re a student.
What can tenants do if they think their rent has been increased by too much?
If a landlord is charging significantly more than is being charged for similar properties in the area, the tenant can apply to the Tenancy Tribunal.
The Tribunal could make an order for the rent to be reduced. The tenant will need to have evidence that their rent is a lot higher than rent for similar houses in the same area.
Where can tenants find evidence of how much rent is in their area?
The Tenancy Services website enables people to search for the lower quartile, median and upper quartile market rent in their area.
The Tenancy Services website also provides a breakdown of average rent by number of bedrooms in a rental property. This can give tenants an indication of whether they may have a case to take to the Tribunal. Tenants can also look at rental property listings in their area.
How much higher does the rent have to be for the Tenancy Tribunal to reduce the rent?
The rent must exceed market rent (the amount charged for similar properties in the area) by a “substantial amount”.
The Tribunal decides each case on its facts, but the Tribunal has previously held that 10 percent above market rent is a substantial amount.
Published: January 22, 2021