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tenancy

Unlawful rent increases and how to claim a refund

Key Takeaway

In New Zealand, landlords must follow specific rules for residential rent increases, including providing 60 days' written notice and not increasing rent more than once every 12 months. Unlawful increases can be challenged at the Tenancy Tribunal, which may order landlords to refund overpaid rent and pay penalties.

Understanding Unlawful Rent Increases in New Zealand

Residential tenancy law in New Zealand sets out clear rules regarding how and when landlords can increase rent. Tenants have rights to challenge rent increases that do not comply with these rules and may be able to claim a refund for any unlawfully paid rent.

Rules for Lawful Rent Increases

For a rent increase to be lawful, a landlord must adhere to specific requirements under the Residential Tenancies Act 1986:

  • Frequency of Increase: A landlord cannot increase the rent for a tenancy more than once every 12 months [Source: Residential Tenancies Act 1986, s 24(1)(a)]. This 12-month period applies from the date of the last rent increase or, if there hasn't been one, from the start date of the tenancy [Source: Residential Tenancies Act 1986, s 24(1)(a)].
  • Notice Period: A landlord must provide written notice of a rent increase at least 60 days before the increase is due to take effect [Source: Residential Tenancies Act 1986, s 24(1)(b)].
  • Form of Notice: The written notice must clearly state the new amount of rent and the exact date from which it will apply [Source: Residential Tenancies Act 1986, s 24(2)].
  • Agreement: Any agreement between a landlord and tenant to increase rent must comply with these statutory rules. An agreement made outside of these rules is not valid [Source: Residential Tenancies Act 1986, s 24(3)].

What Constitutes an Unlawful Rent Increase?

A rent increase is considered unlawful if it fails to comply with the frequency or notice period requirements. Specifically, an increase is unlawful if:

  • It occurs less than 12 months since the last rent increase or the start of the tenancy [Source: Residential Tenancies Act 1986, s 24(1)(a)].
  • The tenant was given less than 60 days' written notice before the increase took effect [Source: Residential Tenancies Act 1986, s 24(1)(b)].
  • The landlord charges rent that exceeds the maximum rent payable under the tenancy agreement or an order made by the Tenancy Tribunal [Source: Residential Tenancies Act 1986, s 24(3)].

Charging, or attempting to charge, rent that is higher than permitted by the Residential Tenancies Act 1986 constitutes an unlawful act by the landlord [Source: Residential Tenancies Act 1986, s 109(2)(k) and Schedule 1A].

Tenant Rights and Claiming a Refund

If a tenant believes their rent has been unlawfully increased, they have specific rights and avenues for redress:

  • Disputing an Unlawful Increase: A tenant has the right to challenge any rent increase they believe is unlawful [Source: Residential Tenancies Act 1986, s 81].
  • Applying to the Tenancy Tribunal: The Tenancy Tribunal (a specialist court that resolves disputes between landlords and tenants) is the appropriate body for resolving disputes concerning unlawful rent increases [Source: Residential Tenancies Act 1986, Part 4].
  • Making a Claim: A tenant can apply to the Tenancy Tribunal for an order regarding an unlawful rent increase [Source: Residential Tenancies Act 1986, s 81]. The application process generally involves completing and submitting an application form to the Tribunal.
  • Tribunal Orders: If the Tenancy Tribunal determines that a rent increase was unlawful, it has the power to order the landlord to refund any overpaid rent to the tenant [Source: Residential Tenancies Act 1986, s 85(1)(d)]. The Tribunal can also declare the unlawful rent increase void [Source: Residential Tenancies Act 1986, s 85(1)(f)] and may order the landlord to pay a pecuniary penalty (a financial penalty imposed for breaching a statutory duty or committing an unlawful act) for committing an unlawful act [Source: Residential Tenancies Act 1986, s 109(2)(k) and Schedule 1A].
  • Time Limits: An application to the Tenancy Tribunal concerning an unlawful act must generally be made within 12 months of the unlawful act occurring [Source: Residential Tenancies Act 1986, s 77(1)(b)].

Landlord Obligations

Landlords are legally obligated to comply with the rules for increasing rent as established by the Residential Tenancies Act 1986 [Source: Residential Tenancies Act 1986, s 24]. They must not charge, or attempt to charge, rent that exceeds the maximum permitted by law or the tenancy agreement [Source: Residential Tenancies Act 1986, s 24(3)]. Failure to meet these obligations can lead to orders requiring the refund of overpaid rent and the imposition of pecuniary penalties [Source: Residential Tenancies Act 1986, s 109 and Schedule 1A].

When to Seek Independent Legal Advice

If a tenant or landlord is unsure about their rights or obligations regarding rent increases, or if they are involved in a dispute, it is recommended that they seek independent legal advice. Information can be obtained from Tenancy Services, or free legal advice may be available from Community Law Centres.

Key Resources