Rent increase is a commonly used expression for conducting a rent review in a contract. Usually, rental contracts agree on the amount of the annual rent increase and at the same time state the time of the increase. Advice and examples of review index increases can be found here
Rent increases in non-subsidised rental housing
- Under the terms of the rental contract, the rent can be increased if a condition to this effect is included in the contract. The contract must state both the basis for the rent increase and the time of the increase.
- If the basis for the rent increase is such that only the property owner can calculate the amount of the rent increase, the property owner must notify the tenant in writing of the new rent and its effective date. It would be desirable for the notification to be made in good time, for example one month before the increase takes effect.
- Good tenancy practice recommends that the property owner announces a rent increase even when the tenant can calculate the increase independently and knows when the increase will take place.
- Rent increases other than as stated in the rental contract (rate increases by property owner):
- Negotiations must begin at least 6 months before the planned increase.
- Increases must not exceed 15% per year, except in situations where significant repairs are made to increase the rental value of the property or apartment.
- If the negotiations do not yield results, the property owner will ultimately have the option under the law to rescind the contract, which is currently valid.
- In accordance with good rental practice, in the event of a rescindal of a rental contract, the landlord indicates at which rent the contract could continue and within what time a change in the rent should be approved at the latest in order for the rescindal to become invalid.
Rent increases in ARA leases
- Restricted ARA lease agreements follow a cost-based rental basis.
- Notification of a rent increase must be given at least 2 months before the increased rent takes effect. The notice must state the reason for the increase and the new rent.
- An increase in separate utility fees (such as water charges) does not need to be notified to the tenant if the increase is based on an increase in consumption or the number of people living in the apartment.
- ARA properties refer to government-guaranteed housing production, where the criteria for selecting residents are defined separately.
No rent review has been agreed
- If no rent review has been agreed, negotiations on raising the rent must begin at least 6 months before a planned increase.
- The increase must be reasonable and the increased rent must correspond to the rental value of the apartment. The increase may not exceed 15% per year, except in situations where significant improvements are made to the rental property to increase the rental value.