Handling Lease Renewals and Rent Increases

When a fixed-term lease is approaching its end date, landlords face a decision: offer a renewal, let the tenancy roll over to periodic, or end the arrangement. At the same time, many landlords consider whether to adjust the rent. Both decisions are governed by state legislation, and getting the timing and process wrong can mean invalid notices, renter disputes, or months of lost income.

Fixed-Term vs Periodic Tenancies

A fixed-term tenancy runs for a set period - commonly 6 or 12 months - with a defined start and end date. During the fixed term, neither party can end the tenancy without cause (except by mutual agreement or under specific circumstances like hardship or breach).

A periodic tenancy has no end date. It continues on a rolling basis (usually week-to-week or month-to-month) until either party gives the required notice to terminate. In every Australian state, if a fixed-term lease expires and neither party takes action, the tenancy automatically converts to a periodic tenancy on the same terms as the original lease.

Many landlords prefer fixed-term leases because they provide certainty of tenure and rental income. However, periodic tenancies offer flexibility - particularly useful if you are planning to sell the property, move back in, or renovate in the near future.

Rent Increase Notice Requirements

Rent increases are regulated in every Australian jurisdiction. The key rules are:

• Frequency: In NSW, Victoria, Queensland, South Australia, Western Australia, the ACT, and Tasmania, rent can only be increased once every 12 months (Queensland since 1 July 2023, and attached to the property since 6 June 2024; Western Australia since 29 July 2024). In the NT, rent can be increased no more than once every six months, and not during a fixed term unless the agreement specifies the amount or method.
• Notice period: Most states require at least 60 days' written notice. The ACT requires eight weeks. The NT requires just 30 days. Notice must be given using the prescribed form in your state.
• During a fixed term: Rent generally cannot be increased during a fixed-term lease unless the lease specifically provides for it (for example, a clause stating the rent will increase by a specified amount or percentage on a specified date). If the lease is silent on rent increases, the rent stays the same until the fixed term ends.

How Much Can You Increase Rent?

Australia does not have rent control in the traditional sense - there is no legislated cap on how much rent can go up (unlike some international markets). However, the increase must not be "excessive." In most states, if a renter believes a rent increase is excessive, they can apply to the tribunal for a review.

Tribunals assess whether an increase is excessive by considering the general market rent for comparable properties in the area, the condition and features of the property, the length of time since the last increase, and any improvements or upgrades the landlord has made.

In the ACT, rent increases must not exceed the amount prescribed by the Commissioner for Fair Trading (typically tied to CPI or a similar benchmark). In other states, market comparables are the primary guide. As a practical matter, most landlords benchmark their increases against comparable rental listings in the area. Everfolio's AI rental estimate tool can help you assess the current market rent for your property based on location, type, and features.

Negotiating Lease Renewals

Lease renewal is a negotiation, not a unilateral decision. A good renter who pays rent on time, maintains the property, and causes no issues is worth retaining - vacancy periods and re-letting costs can easily exceed the value of a modest rent increase.

Start the renewal conversation early, ideally 8 to 12 weeks before the lease expires. This gives both parties time to negotiate terms and avoids the tenancy silently rolling over to periodic. When proposing a renewal, consider:

• The current market rent for comparable properties
• The renter's payment history and how well they have maintained the property
• The cost of vacancy (advertising, lost rent, cleaning, potential new renter risk)
• Whether you want to adjust any lease terms (such as adding a pet clause or changing the lease length)

If the renter agrees to the new terms, execute a new fixed-term lease. If they do not agree, you can either continue negotiating, let the tenancy go periodic, or - if you have valid grounds under your state's legislation - serve notice to end the tenancy.

What Happens at the End of a Fixed Term

If the fixed term expires and no new agreement is signed, the tenancy becomes periodic. All the terms of the original lease continue to apply, including the rent amount. To increase rent after rollover, you must serve a separate rent increase notice with the required notice period for your state.

Some landlords prefer periodic tenancies because they allow more flexibility to end the arrangement (in states where no-fault termination is still available). Others find that a new fixed-term lease offers better security - a renter on a 12-month lease is unlikely to leave mid-term, whereas a periodic renter can leave with as little as 14 to 28 days' notice.

Practical Tips

• Set calendar reminders. Mark the date 10 to 12 weeks before the lease expires to begin renewal discussions. Everfolio sends automated reminders so you never miss this window.
• Document everything. Any offer, counter-offer, or agreement about rent or lease terms should be in writing. Verbal agreements are difficult to enforce.
• Use market data. Support your proposed rent increase with evidence - comparable listings, recent sales data, or Everfolio's AI rental estimate. This makes the conversation more objective and less adversarial.
• Consider the full picture. A $10/week rent increase nets $520/year before tax. If it causes a good renter to leave and the property sits vacant for three weeks, you have lost more than you gained. Factor in turnover costs when deciding how aggressive to be.
• Know your state's rules. The required notice period, allowable frequency, and dispute mechanisms differ by state. Check the relevant tenancy authority website or use Everfolio's compliance engine, which tracks jurisdiction-specific requirements for every property.

Managing lease renewals and rent increases well is one of the most impactful things a landlord can do to maintain stable, long-term rental income. By understanding the legal framework, communicating early, and using data to guide your decisions, you can retain good renters, stay compliant, and grow your rental yield sustainably.