Rent increase notice two days short: landlord ordered to pay tenants $2,218.20 (ACAT, 2026)

What happened

Two tenants rented a property at Giles Street, Kingston in the ACT. The lease ran from 26 June 2024 to 23 June 2025, then continued as a periodic tenancy (a rolling tenancy with no fixed end date). The tenants moved out on 12 February 2026. Rent was $590.00 a week.

On 22 July 2025 the landlord's agent, Civium Property Group, emailed the tenants to say the rent would rise by $25 a week from 14 September 2025. The email acknowledged that this was more than the amount allowed under the Residential Tenancies Act 1997 (ACT) without the tenant's agreement, and that the allowed, or "prescribed", amount was $3.89 a week. The date given was seven weeks and five days after the notice, not the eight weeks the lease requires. The tenants replied the same day, refused to agree to the increase, and pointed out that eight weeks' notice had not been given. They raised the notice period again on 13 August 2025. The agent never answered that point. The landlord then applied to the tribunal on 11 November 2025 for the increase, backdated to 16 September 2025.

The tenants also complained about mould in one of the bathrooms. They reported a lack of ventilation causing peeling paint and mould on 3 April 2024. They received no substantive response for five months, despite raising health concerns. Various tradespeople attended, but nothing was done until an extraction fan was installed on 14 July 2025. A painter came on 4 August 2025, and some mould was still visible until 13 August 2025. One tenant gave evidence that the bathroom was still usable, but she limited the time she spent in it and worried about her health over the 16 months it took to fix. There was no mould at the start of the tenancy, and this was not disputed.

The tenants also pointed to three incidents about inspections: an agent arriving without notice in August 2025 (which the tenants allowed), an inspection scheduled on 15 August 2025 without the required one week's notice and then rescheduled to 19 August 2025, and an open house on 3 February 2026 that the tenants only learned about the day before from an advertisement (which they also allowed to go ahead). The landlord filed no response or evidence on the counterclaim, although the agent conceded at the hearing that he knew the counterclaim had been made. The tribunal was satisfied there was no unfairness to the landlord and still let the agent explain his side verbally. The agent did not dispute the timeline or the mould, and gave no explanation for why the painting could not have been done earlier as a stop-gap.

What each side wanted

The landlord asked for the $25 a week increase backdated from 16 September 2025 to the end of the tenancy, a total of $532.14, and said the 14 September date in the notice was "a mistake" that should simply be read as starting at the eight-week mark. The tenants disputed the increase, chiefly because the notice was short, and conceded only the prescribed $3.89 a week. In their counterclaim they asked for a 15% rent reduction for 12 months because of the delay in fixing the mould and a roof leak, plus $250.00 for interference with their peace, comfort and privacy over the inspections, and any further orders under section 71 of the Act.

What the tribunal decided

The tribunal allowed the landlord's rent increase claim only in the sum of $3.89 a week, for 21 weeks and two days, a total of $82.80. The tenants' counterclaim for interference with quiet enjoyment was dismissed.

The tenants' counterclaim for a rent reduction was allowed in the sum of $2,301.00, being a 7.5% reduction on rent of $590.00 a week for 52 weeks. Setting the two results off against each other, the tribunal ordered that the landlord pay the tenants $2,218.20.

Why the tribunal decided it that way

On the rent increase, the tribunal worked through sections 64A and 64B of the Residential Tenancies Act 1997 (ACT). Those sections mean a landlord can only raise rent by more than the prescribed amount in one of three ways: because the lease itself allows it, by giving a written notice that meets section 64B(2) and getting the tenant's written agreement, or by getting the tribunal's approval in advance. The tenants had not agreed, and the landlord was not seeking advance approval because the period claimed was already in the past. So everything turned on the lease. Clause 38 of the standard terms, which the Act prescribes and which were part of this lease, says the landlord must give eight weeks' written notice of an intention to increase rent. Clause 40 says that if the tenant stays on without applying to the tribunal to review the increase, the increase takes effect from the date in the notice.

The tribunal accepted that whether a defective notice still works is a question of reading the contract, referring to the Victorian Court of Appeal decision in JPA Finance Pty Ltd v Gordon Nominees Pty Ltd. But on the plain words of clause 38, eight weeks' notice must be given, so a notice that does not give eight weeks is not a clause 38 notice at all. To depart from that plain reading there would need to be some reason why it was fair, in the context of the parties' relationship, to let the defect be fixed after the fact. There was none here: the tenants raised the short notice on the very day the notice was sent, and again three weeks later, so the landlord had ample chance to issue a fresh, correct notice and put the matter beyond doubt. The tribunal also took into account the objects of the Act in section 4A, which include defining the rights and obligations of tenants and landlords and protecting parties from unfair practices. The notice was therefore invalid, the increase had no effect, and only the prescribed $3.89 a week was allowed. The tribunal noted that the comparable-rent evidence both sides filed was not relevant, because the test in section 68 only applies to an application for prior approval or a tenant's application to review an increase, and this was neither.

On the repairs, clause 55 of the lease requires the landlord to keep the premises in a reasonable state of repair having regard to their condition at the start of the tenancy, and the tenant to report the need for repairs. Clause 57 requires non-urgent repairs to be done within four weeks of being notified. Following Hembling v Xu, the tribunal treated that four-week duty as absolute: it is not a defence that the landlord did their best. The mould was reported in April 2024 and not resolved until well over 15 months later, so the landlord was in breach.

Section 71 of the Act requires the tribunal to order a rent reduction if a tenant's use or enjoyment of the premises has diminished significantly because of, among other things, a failure to keep the premises in repair, and section 71(4) lets the tribunal order the landlord to pay the difference back to the tenant. A reduction can run for up to 12 months. The tribunal accepted that the mould affected the tenants' enjoyment and that the long delay added further loss of amenity, but distinguished Arthur v Geromboux, where a 15% reduction was given because a bedroom was made unusable. Here the bathroom remained usable, and the tenants filed no photographs or account of their own efforts, so the extent of the mould was unclear. Comparing the matter with Hembling, where a $50 a week reduction worked out at about 6.25%, the tribunal settled on 7.5% for 52 weeks, noting that assessing this kind of loss is not an exact science. The inspection complaints were inconvenient and disconcerting but did not amount to the substantial interference section 71(2) describes, so that part was dismissed.

What this means if you are in a similar position

This decision shows how strictly ACAT reads the notice rules for rent increases in the ACT. If you are in a similar position, the point to notice is that the eight-week notice period in clause 38 of the standard terms was treated as a hard requirement, not a target: being two days short meant there was no valid notice at all, and the tribunal would not simply shift the start date to the eight-week mark. It also mattered that the tenants raised the problem on the day the notice arrived and again weeks later, which left the landlord with time to send a corrected notice and start the clock again.

The repairs part shows that the four-week deadline in clause 57 of the standard terms is applied as an absolute obligation, so a landlord who is genuinely trying but still slow can be in breach. It also shows how the size of a rent reduction is worked out: the tribunal looked at whether any part of the home was unusable, how long the problem ran, and what reductions had been given in comparable cases. The tenants' own evidence gap, with no photographs and no account of what they did about the mould themselves, is part of why the reduction came in at half what they asked for. A party who files nothing in answer to a counterclaim can still find the matter decided largely on the other side's evidence.

In disputes like this, the step most people take first is a clear written notice or demand to the other side that sets out the exact amount, the dates and the term of the lease or section of the Act being relied on, before any tribunal application is lodged.

How to apply: our step-by-step guide to a ACAT application. More decisions: ACAT cases and house rentals and bonds.

Source: TSOUNIS v TEOH & ANOR (Residential Tenancies) [2026] ACAT 30 (read the full decision). This summary was prepared from the published decision for general information. It is not legal advice, and the tribunal’s own reasons are the authoritative record.