December 07, 2023
Property Management

Rental Increase Protocol: What You Need to Know

News & Insights
For clients of Marshall White's Property Management team, it is critical to understand the importance of correctly issuing rent increase notices.

In accordance with the Victorian Residential Tenancies Act (Section 44) and the Residential Tenancies Regulations (Regulation 21 & Form 5), there are specific requirements that must be met to ensure the validity of these notices. Non-compliance not only risks invalidating the notice but may also lead to financial repercussions determined by the Victorian Civil and Administrative Tribunal (VCAT). 

When preparing a notice of proposed rent increase, it is essential to document in detail the method used for calculating the new rent. This includes a clear outline of any calculations and comparable properties that informed the decision. The rent increase must not exceed the amount arrived at using this method. Incomplete information can render the notice invalid. 

VCAT has adjudicated several cases where rent increase notices were found invalid. In some instances, this led to the reinstatement of the original rent and orders for Residential Rental Providers (RRPs) to refund any excess rent collected. It is therefore imperative that your rent increase notices provide comprehensive information. 

This information should enable renters to understand why the increase is proposed and assess its appropriateness. In cases where a “Comparative Market Analysis” is cited, VCAT expects detailed information about the properties used in the analysis, including their location and features. This is crucial to satisfy the requirements of the Act that mandate the provision of the calculation method. 

Similarly, references to “CPI” as a basis for the increase must be accompanied by a clear formula, relevant data, and calculations. This level of detail is necessary to allow renters to make an informed assessment of the increase’s reasonableness. 

In light of these considerations, as a team, we have undertaken a comprehensive review and update of our processes and practices for issuing rent increase notices. Compliance with the legislation is not only a legal requirement but also a reflection of the professional standards we uphold at Marshall White.  

Entrust our team to expertly guide you through the complexities of rent increase notices. We’re dedicated to upholding legal standards and protecting your interests as a rental provider, while maintaining strong, positive relationships with renters. With our thorough understanding of the regulations and commitment to clear communication, you can be confident in our ability to manage this crucial aspect of property management effectively and responsibly.