Property Management/Leases
RENT INCREASE
In the
event that a lease document exists, the rent is locked and cannot be
altered for the term of the lease. However, if there is no lease, a
landlord can increase a tenant's rent by giving a written notice of the
following durations:
" 10 days written notice before rent is due if the rent
is paid once a month
" 3 days written notice before rent is due if
the rent is paid weekly or semi-monthly
" 60 days written notice is
required for rent increases on space when not protected by a lease for
long periods of time.
Possibility of
an Increase a Residential Tenant's Rent in a Non Rent Controlled
Jurisdiction
A landlord normally has
the right to increase a tenants rent without any limitation whatsoever in
a non-rent controlled jurisdiction. A landlord must however,
terminate the old lease agreement and create a new lease agreement in
order to be able to increase the rent. This is done by giving the
stipulated amount of notice to the tenant that the current lease will be
terminated, and by giving the tenant the option to enter into a new lease
agreement at the higher rent or to vacate the premises.
Notice Period
that a Landlord Needs to Give a Residential Tenant before Increasing the
Rent
The period of notice
that is required depends on the type of lease agreement that the landlord
and tenant had entered into originally. The following terms are the ones
used commonly:
- Tenancy for a
term - In case the landlord and the tenant have entered into a tenancy for
a term, for instance a one year lease, then the terms of the lease
agreement will determine the clauses pertaining to increasing the rent and
both the landlord and the tenant must abide by the terms of the
lease. The landlord must wait until the end of the fixed lease
period before increasing the rent.
- Periodic tenancy
- In case the landlord and the tenant have entered into a periodic
tenancy, for instance a month to month lease, then the landlord must give
proper prior notice before raising the rent.
- For a month to
month tenancy, most jurisdictions require a minimum of 30 days notice to
the tenant before the landlord can increase the rent.
- For week to week
tenancy, most jurisdictions require at least 7 days notice to the tenant
before the landlord can increase the rent.
Possibility of
an Increase a Residential Tenant's Rent in a Rent Controlled
Jurisdiction
It is sometimes
possible to increase a residential tenant's rent in a rent controlled
jurisdiction, based on the terms and conditions as detailed in the rent
agreement and in keeping with the rent control laws prevailing in the
area. In case a tenant resides in a jurisdiction that has rent control,
the tenant's rent can only be increased in accordance with the rent
control regulations issued by the rent control board in that particular
locality.
Some of the
most common reasons for rent increases in such jurisdictions are listed
below:
- In accordance
with the annual guidelines as laid down by the rent control board: The
rent control board issues an annual report which details a set of rent
increase guideline which is the maximum amount by which a landlord can
increase the rent of a current tenant without having to take special
approval from the rent control board. The landlord must also give
the tenant proper notice of the rent increase, usually 30 to 90 days,
depending on the laws prevalent in each jurisdiction.
- Following
capital improvements: When an owner makes an improvement to a building
that is subject to rent regulation, the owner may be allowed to increase
the rent based on the actual cost of the improvement.
In order to be eligible
for the rent increase:
- The capital improvement has to be a new improvement
or renovation to the old structure and not a repair to old equipment.
- The owner must submit a capital improvement rent increase
application to the rent control board and seek approval for the same.
- No rent increase can be charged or accepted
until the rent control board issues an order approving of the rent
increase and deeming it legit.
- Hardship faced
by the Owner for want of a just price for the property rented out: An
owner may be entitled to a rent increase if the he or she can prove that
the rental agreement is not making a fair return on their investment as
per the maximum increase permitted by the rent regulation statutes.
In order to be eligible
for the rent increase:
- The owner must submit an 'owner hardship application'
form duly filled and submit it to the rent control board and seek approval
for the same.
- No rent increase can be charged or accepted
until the rent control board issues an order approving the legitimacy of
the requested rent increase.
Role an Attorney in a
Residential Rent Increase
The landlord - tenant
law is very complex and varies across cities and states. Since it is
constantly undergoing changes, it is best to avail of the services of a
real estate lawyer who will be able to advise you of the exact rules that
prevail in your city and the implications that it has on rent increases.
They can thus protect your rights, whether you are an owner trying to
increase a tenants' rent or a tenant fighting an attempted rent increase
by their landlord.
