Just got a quick question, my rent was increased in Sep 2020 and my lease is end in April. I have got a notice from my landlord today says if I wish to extend my lease, rent will be increased again. I am a bit confused, I initially thought based on the new law, the rent cannot be increased for 12 months. But in this case, is it becoz of new lease (extended) the landlord can increase? Does anyone know? Thank you.

dakola - 2021-02-11 11:54:00

dakola wrote:

Just got a quick question, my rent was increased in Sep 2020 and my lease is end in April. I have got a notice from my landlord today says if I wish to extend my lease, rent will be increased again. I am a bit confused, I initially thought based on the new law, the rent cannot be increased for 12 months. But in this case, is it becoz of new lease (extended) the landlord can increase? Does anyone know? Thank you.

So you can only get one increase this year and from your lease renewal 12 months.

Being that it rolls over in April, the next increase is April 2022.

Most likely will be larger than normal increases from now on.

Edited by smallwoods at 1:23 pm, Thu 11 Feb

smallwoods - 2021-02-11 13:21:00

Rent increases
For both fixed-term and periodic tenancies, landlords can only increase rent:

after the first 12 months of the tenancy
provided the increase is not within 12 months of the last increase.
Landlords must give the correct notice and meet certain conditions.

For fixed-term tenancies, landlords can only increase rent if the tenancy agreement allows this.

https://www.tenancy.govt.nz/rent-bond-and-bills/rent/increas
ing-rent/

Edited by loose.unit8 at 1:39 pm, Thu 11 Feb

loose.unit8 - 2021-02-11 13:37:00

I think it comes down to - does the new term count as a new lease? Or does it count as continuing the old lease?

loose.unit8 - 2021-02-11 13:39:00

If the tenancy agreement allows rent increases during the fixed term (sounds like current one does) then it can be increased again 12 months after the last increase, in September 2021. Regardless of what tenancy agreement is in force, assuming a new fixed term agreement permits increases during the term.

OP you can call Tenancy Services to confirm. If you can get through before the tenancy expires.

Bear in mind that the landlord can give you notice that the current fixed term tenancy will not be extended.

artemis - 2021-02-11 14:34:00

artemis wrote:

If the tenancy agreement allows rent increases during the fixed term (sounds like current one does) then it can be increased again 12 months after the last increase, in September 2021. Regardless of what tenancy agreement is in force, assuming a new fixed term agreement permits increases during the term.

OP you can call Tenancy Services to confirm. If you can get through before the tenancy expires.

Bear in mind that the landlord can give you notice that the current fixed term tenancy will not be extended.

Fixed term tenancies will now automatically revert to periodic after they expire - one of the new laws that came into effect today. So that means that this landlord can't extend the fixed term tenancy anyway? It has to go to periodic? :)

torrigreen - 2021-02-11 17:38:00

torrigreen wrote:

Fixed term tenancies will now automatically revert to periodic after they expire - one of the new laws that came into effect today. So that means that this landlord can't extend the fixed term tenancy anyway? It has to go to periodic? :)

The fixed term tenancy can be extended by agreement between the parties. However if the extension is entered into after 10 Feb the new rules for termination apply (same as for periodic tenancies).

artemis - 2021-02-11 18:36:00

FROM the Tenancy Sevices website:

Rent can only be increased every 12 months
From 12 August 2020, rent increases are limited to once every 12 months. This is a change from once every 180 days (six months). Our rent increases webpage has more information on how this rule will apply.

Any rent increase notices given to tenants from 12 August 2020 must comply with the new 12-month rule. If a notice was given before 12 August 2020, it is still within the 180-day rule.
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OP: for your rent to have increased in Sept 2020, you must have been given notice 60 days beforehand. (July 2020).

thumbs647 - 2021-02-13 17:04:00

dakola wrote:

... if I wish to extend my lease, rent will be increased again.

Tricksy. The landlord is basically saying that you have two choices:

1. Agree to a new lease with higher rent, or
2. Be given notice for the end of your FTT.

However, tenants can't contract out of their rights, and landlords cannot contract out of their responsibilities.
It's clear from the RTA that a renewal is, effectively, a continuation of the same tenancy, not a new tenancy. If it were a new tenancy the RTA would not mention renewals, but it does, many times.
Because it's a renewal (and therefore the same tenancy), the landlord cannot increase the rent less than 12 months after the previous rent increase.
However, you're in the difficult situation where if you say no to the rent increase, the landlord will likely just give you notice to quit at the end of the FTT.
Therefore, if you don't want the rent increase, you have two choices:
1. Delay giving an answer until less than 21 days before the end of the tenancy (which may be difficult), or
2. Agree to the rent increase now, then once you are less than 21 days from the end of your tenancy, write to the landlord and say you have now learnt that rent increases less than 12 months after the previous increase are not allowed, and you will therefore not be increasing your rent payments on the proposed date.
N.B. Once upon a time, the approach above would likely have meant no renewal of your FTT the following year. However, with your renewal falling after 11 Feb, the landlord will only be able to give you notice if the property is going to be sold, is needed for a family member, or is going to be extensively renovated/demolished, so your real risks will be
1. Rent shock in September: you can be sure the landlord will increase the rent the maximum s/he thinks s/he can get away with; and
2. If/when you do ever want to move to a different rental, the landlord will be less inclined to provide a glowing reference.

You'll want to weigh up these various risks and decide which one you're most comfortable with.

Edited by luteba at 9:53 am, Tue 16 Feb

luteba - 2021-02-16 09:49:00