Empire Global Developments Pty Ltd v Chalman (Residential Tenancies)

Empire Global Developments Pty Ltd, the owner of a residential property in Amaroo, sought approval from the Residential Tenancies Tribunal for a proposed rental increase from $425.00 per week to $510.00 per week, an increase of $85.00 per week or 20%. The applicant argued that this increase was justified due to rising outgoings and higher rental rates for comparable properties. The respondent, who has been renting the property since June 2020, opposed the increase on the grounds that it was excessive and disproportionate given the relatively recent history of rental increases.

The Tribunal had to determine whether the proposed rental increase was excessive under the Residential Tenancies Act 1997. Key considerations included the outgoings and costs of the lessor in relation to the premises, the rental rates for comparable premises, and the state of repair of the premises. The Tribunal also needed to assess whether any other relevant matter supported the proposed increase.

In its decision, the Tribunal found that the applicant's claimed increases in outgoings, such as interest on borrowings, rates, and electricity costs, were not directly related to the specific premises in question but rather to the entire complex. Consequently, these increases could not be considered when determining if the rental increase was excessive. Additionally, the Tribunal noted that the proposed increase vastly exceeded the prescribed amount and did not align with the comparable rental rates for similar properties in the area. The Tribunal also considered the respondent's argument regarding the state of repair of the premises but found these issues did not significantly impact the overall rental value.

Ultimately, the Tribunal concluded that a rental increase of $35.00 per week, amounting to approximately 8%, was justified. This increase brought the total rent to $460.00 per week, aligning more closely with the comparable rental rates and considering the relatively short period since the last increase. The Tribunal allowed this increase while disallowing the remainder of the proposed increase, which it deemed excessive.

The Tribunal ordered that the rental increase of $35.00 per week would take effect from 21 October 2023 and granted the respondent leave to apply for an order for time to repay the increased rent under section 69(2) of the Residential Tenancies Act 1997.