During the pandemic Alex’s property manager told her she had to start paying more rent, but her landlord didn’t know anything about it, and hadn’t authorized a rent increase.
Alex’s difficulties with her Perth rental began in May 2020, when she and her housemates’ work hours were cut in half during the COVID pandemic, and she decided to ask for a reduction in the $495 per week rent.
“Our property manager gave me a form to fill in and told me he would speak to the owner but any rent reduction we received would need to be paid back in full on a payment plan,” she said.
“Eventually we were told the owner would not grant a rent reduction.”
In August 2021 she received an email offering a six-month lease renewal, increasing the rent to $530 a week.
After a long exchange about outstanding maintenance issues at the property, the increase was negotiated to an extra $20 a week.
“We were given 10 days’ notice for the rent increase and told if we didn’t accept it, we would be required to vacate instead. We started paying the additional money [in early October].”
But when she was emailed a copy of the new lease agreement to sign on October 31, she checked it carefully and noticed it specified the rent at the previous lower figure.
Unexpected phone calls
After asking why the lease renewal specified a lower rent that what she and her housemate were now paying, she received a surprising phone call from the property owner.
The owner told Alex he had been asked to sign a new lease with a higher figure and had been told that this was because his tenant had requested to pay a higher rent.
“The landlord called me to ask why I want to pay more rent,” she said.
“When I explained the email I received in August, the landlord was angry and assured me he had never authorized a rent increase and specifically instructed the agency not to go for one even though they were putting pressure on him to.
“He had not been receiving the additional $20 per week in rent.”
He also told Alex the request for a rent reduction during the pandemic had not been passed on to him and that if it had, he would have agreed to it.
The ABC has spoken to Alex’s landlord to confirm this account.
Happy for Alex and her housemate, the landlord has taken over the management of his rental property himself.
“We are still in the same house with no rent increase, and we have a great relationship,” he said.
‘Changes to leases must be lawful’
In a statement, a WA Consumer Protection spokesperson said that “changes in a tenancy agreement such as an increase in rent need to be done in accordance with the Residential Tenancies Act”.
“The collection of rents is a real estate business transaction, and all monies need to be deposited into a trust account by the agent and belong to the landlord.
“If the increased rent has not been passed on, less any contracted management fees of course, then an offense may have been committed.”
The Residential Tenancies Act also specifies that 10 days’ notice of an increase is insufficient.
According to WA Consumer Protection, if rent is increased when a tenant starts a new fixed term tenancy, “the rent increase cannot take effect for the first 30 days of the new agreement”.
If a rent increase is applied during a fixed term or periodic tenancy, 60 days’ notice must be given.
Strong motivation for rent increases
Joel Dignam, executive director of advocacy group Better Renting, said managing agents have strong financial reasons to increase rents and see tenancies turn over, even when it is not in the landlord’s interest.
Better Renting is currently campaigning to end “rental auctions” where prospective tenants are encouraged to offer over the advertised rent to secure a lease in a tight market.
“Typically, agents will have an agreement with the owner of the property, and they’ll get a relatively small percentage of the weekly rent each week — 5 to 10 per cent,” Mr Dignam told Dustin Skipworth on ABC Radio Perth.
“But when they rent out the property, they might get one or two weeks’ rent as a flat payment, because of the work they’ve done running inspections, and so on.
“If you can make that property rent out for more, that is more money in the agent’s pocket straight away. They also have an incentive to have shorter tenancies and rent the same property out more often for the same reason.
“Obviously tenants are better off having a rent they can afford, and landlords are better off having stable tenants who can afford to remain in the property too.”