Rental Increase Halfway through Lease Period

releasethekr4cken on 22/02/2020 - 21:02
Last edited 24/02/2020 - 16:03

Hi all,

Our lease in our current rental is finishing up. The landlord sold the house and the new owners want vacant possession so they can move in. My partner and I have been attending viewings and found something nearby we liked. We applied using the 1form system that the Real Estate agent was on board with. They've call our references and accepted our application. The email I just received from the real estate agent says "Congratulations on being accepted for a 12 month lease for the above mentioned property at $xxx.00 per week, commencing 07/03/20 with a 2.5% increase after 6 months".

2.5% increase? We haven't even started the lease, it was listed on realestate.com for it's price, there wasn't any mention of a 2.5% increase.

Has anyone had this happen? I have rented 3 properties and this is the first time I have had this little charge.

UPDATE:

Email back from agent

"The rent increase will depend on the market rental. If rents are going up, the owners will naturally expect a rent increase"

Financial

Comments

  • Cheeper on 22/02/2020 - 21:07

    Do you have a copy of the lease?
    What does it say in there?

    • releasethekr4cken on 22/02/2020 - 21:08

      The lease hasn't started. It was advertised at xxx per month. We applied. Once applications are successful they send you a lease. This lease has the 2.5% increase on it.

  • JimmyF on 22/02/2020 - 21:17
    +1

    What did the agent say when you asked them?

  • elgrande on 22/02/2020 - 21:27
    +22

    Walk away, thats nasty.

  • garetz on 22/02/2020 - 21:39
    +20

    Sounds like they are setting a precedent to increase the lease every 6 months, so stay away.

    • releasethekr4cken on 23/02/2020 - 15:18

      The most likes, shows which way this community leans (as do I)

  • Wickz on 22/02/2020 - 21:47
    +7

    At my last rental the agents raised the rent every 6 months, which I think is the minimum amount of time that they can do it under legislation (soon to change to 12months in VIC) and it was one of the reasons I left. The rental was advertised at $450 per week, but by the time I left I was paying over $520 per week for a house that wasn’t worth even close to that.

    I noted when I left they re-advertised the property for $450 again.

    Whilst it’s not illegal, at least the agents are telling you upfront about the rent increase in 6 months time.

  • Tech5 on 22/02/2020 - 23:57
    +4

    If you haven't signed anything, they have the right to change it as much as they like. You have the right to walk away

    • releasethekr4cken on 23/02/2020 - 15:05
      +2

      Not really the question, but yeah, aware of everyones rights at this point (nothing signed). Just seems wierd to advertise it as X then have an increase halfway through lease. Because if I sit on this lease for a week that's minimum 1 weeks rent the landlord has lost which negates that price hike.

      • bobbified on 23/02/2020 - 21:59

        Because if I sit on this lease for a week that's minimum 1 weeks rent the landlord has lost which negates that price hike.

        Every rental I verbally agreed on, they only gave 24-48 hours to sign and return the lease with the bond and everything else. So if you sit on it for a week, they might offer it to someone else.

        (But I wouldn't be signing one knowing the rent will increase every 6 months! Imagine what it'll be like to try get something repaired!)

  • cjbowden on 23/02/2020 - 00:00
    +6

    It is only possible to increase the rent partway through the lease period if you agree to it in the lease. You haven't agreed to it yet, so don't sign the lease. I suggest you talk to the agent and tell them no way.

    Keep in mind that the owner will lose most of the first month's rent in fees to the agent, so it is definitely not in their interests to be turning over tenants regularly. Stick to your guns, and say no. When / if they try to increase the rent in 12 months, threaten to leave. I would much rather have a tenant that paid on time and didn't complain about every squeaky noise and a minor dripping tap than an extra 2.5% rent.

    • releasethekr4cken on 23/02/2020 - 15:18

      "the owner will lose most of the first month's rent in fees to the agent, so it is definitely not in their interests to be turning over tenants regularly."

      my thoughts exactly, I wonder if the 2.5% is even going to the owner, maybe this agent has a lower management fee (6.5%) and used this to obtain the authority to lease, then jacks up the 2.5% to recuperate. For all I know the owner is completely unaware.

      We all know real estate agents are a bit shady.

  • ssquid on 23/02/2020 - 00:09
    +1

    When you filled in the application, did it include fields for the weekly/monthly amount and length of lease? If so the terms of the lease should be the same. Otherwise they're being dodgy and hoping you won't realize.

    • releasethekr4cken on 23/02/2020 - 15:15

      No the application was 1form and the weekly rental price was an empty field that I populated before sending it through!

      Good question though! :)

      • ssquid on 23/02/2020 - 17:25
        +1

        That's pretty much what I meant though… you offered to rent the property at that price for a certain amount of time, which would be assumed to be 12 months unless the property was specifically listed as a 6 month lease. Otherwise they're guilty of false advertising, the same as if the house had less bedrooms or was missing amenities printed in the listing.

    • releasethekr4cken on 23/02/2020 - 15:16

      Yeah so this is prior to a signing of the lease.

  • djk on 23/02/2020 - 07:37

    Reality is that whether it is legal or not and I don't know about that,
    that's what some of them do, at least this lot were upfront about it. The agency we rented through previously just did what they wanted regardless if the law. It is often why there is a huge tenant turnover because those that can simply leave after the initial period. Also if the agency is dodgy about the lease, my experience is that you won't hear back from them about repairs and they'll likely use a payment system where the tenant ends up paying extra in fees just to be able to pay their rent. Good luck

    • releasethekr4cken on 23/02/2020 - 15:09

      I am sure it is legal as the lease hasn't been signed. Seems like advertising it at a certain price per week gets people through the house for an inspection and drums up interest. Then you can put a lease in front of them for a different amount. Just haven't seen this happen before. I wonder what the limits of this is. Like can you say something is $500 a week so lots of people see it on the website. Then once 25 people turn up to a viewing an agent will know this is a lot of demand and can then send through a lease to be signed at $650 per week? I just haven't encountered it before, but it seems like a few people have had it happen.

  • CyberMurning on 23/02/2020 - 08:20
    +3

    It's okay because they already told you in front. Take it or leave it. No one here can help.

    • releasethekr4cken on 23/02/2020 - 15:14
      +1

      I am not disputing the rights of an agent to do this, just wondering if people have seen this happen before. If it's a new strategy to increase competition between tenants or something.

      Bold of you to assume noone can help, for all we know the owner has read this and immediately has a change of heart and decides to gift me the house and go to Peru to take heroic doses of Ayahuasca, such is the power of ozbargain..

  • OzHunterNSW on 23/02/2020 - 10:39

    Read your fine print… but usually should be no increase within the first 12 months of signing lease, unless it stipulates so.

    They must give you a certain number of days before the rise takes effect - check lease, and the rise must not be excessive or unreasonable.

    Contact the Dep of Fair Trading for advice.

    • releasethekr4cken on 23/02/2020 - 15:12

      Yeah aware of that. So this stipulation wasn't mentioned during the application. I am probably still going to sign the lease and cop the increase because I want the place. But the strategy of not being upfront to me seems like a risky one, as an accepted applicant could then turn around and not take the increase, then the property is empty for another week. Every week something is empty is usually a bigger financial impact for a landlord than a 2.5% increase in rent would acheive.

  • jjjaar on 23/02/2020 - 11:35
    +2

    If it’s written in the lease and you haven’t signed it yet you ya the option to ask them not to do that, or to walk away from the proposed contract saying you’re not happy with the terms.

  • HeWhoKnows on 23/02/2020 - 13:53

    Firstly what state are you in OP as terms are different in each state.

    Usually under a fixed term residential lease the rent is fixed as well.

    If you didnt agree to any mid-term increase then you have every right to withdraw without penalty.

    And frankly with such "AH" real estatae agents I would exit as quickly as possible

    • releasethekr4cken on 23/02/2020 - 15:21

      Im in W.A

      I haven't agreed yet, obviously once I sign this is not up for debate.

      On the website it was X amount per week, this must be a way to get more people interested in that price range, then once they are in you can start increasing.

  • TEER3X on 23/02/2020 - 15:22

    What state? Might be different laws in this instance.

    If you have other rentals that you like, can't you counter them and say you'll only take the rental if the price is fixed for 12-months as you were led to believe when viewing the property.

    • releasethekr4cken on 23/02/2020 - 15:24

      I might just send back the lease with a 1 week delay on occupation date, that'll counter the price hike.

  • Jade81 on 23/02/2020 - 15:38
    +2

    I have had things snuck into contracts before. I rang the agent, pointed it out and he said he'd told me and a signed contract so it was agreed.
    He sent it to me and it was indeed signed, by the owner not me.

    I told him he was crazy, I couldn't afford an increase and I was no longer interested.
    A week later he called back and offered the original price. I said no way, if they're stuffing around at the start and I get a bad feeling I've learned to run away as fast as you can. Good land lords know to value good tenants

    • releasethekr4cken on 23/02/2020 - 16:14

      as a landlord, I couldn't agree more, my first property I built that house, 8 years I have had the same tenants.

  • lainey13 on 24/02/2020 - 09:48

    Tell them where they can shove their terms. I've never seen that before and I've been renting since 2004. (not any more thankfully)

  • sim0an on 28/02/2020 - 13:39

    In Queensland, Landlords are allowed one rental increase per 6 months regardless of the length of lease.. but still has to be within reason and within the market value.

  • ssquid on 28/02/2020 - 14:45
    +1

    "The rent increase will depend on the market rental. If rents are going up, the owners will naturally expect a rent increase"

    You know that's BS, right? If you sign that lease you WILL get an increase, guaranteed.
    Think about it - the agents are the ones who push rents up. So they're using rising rental prices as justification for raising rental prices…

  • Sofie519 on 03/03/2020 - 01:39

    The agent/landlord is simply building in a fixed increase during the lease term. It needs to be agreed upon prior, but once agreed, it is enforceable. I don’t often see this in a 12 month lease, but as an example a 3 year lease or a 20 year lease, it makes perfect sense to build a fixed increase over time.

    Again, negotiate with the agent, say you won’t enter into the lease if that is the term, you agree to normal market review after 12 months, but not a predetermined amount in only 6.

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