Landlords must often follow specific legal procedures when increasing a tenant’s rent. The two major requirements landlords must follow are, providing the tenant with written notice of the increase and giving this notice a certain number of days before the tenant’s lease is set to expire. Below you will also find a sample letter of how to inform a monthly tenant that you are going to raise their rent.
Does a Rent Increase Affect the Security Deposit?
It can. Many states set a maximum amount a landlord can charge as a security deposit based on the monthly rent. For example, the security deposit could be two times the monthly rent. Therefore, if the monthly rent goes up, the landlord could require the tenant to put additional money toward their security deposit. This additional amount would usually be due at the same time the rent increase takes effect. Sometimes, the landlord will not ask for additional security deposit money even as the rent is increased.
6 Ways Tenants Are Protected During Rent Increase
A landlord does not have the ability to increase a tenant’s rent whenever he or she feels like it. There are certain steps landlords must follow to raise the rent which is meant to help protect the tenant from ridiculous and unfair increases.
1. A Rent Increase Cannot Occur During the Lease Term- Unless the lease agreement specifically says otherwise, rent increases are not allowed during the lease term. The tenant signed an agreement to rent the property at a certain price, and this price will remain valid until the lease expires. A landlord can propose a rent increase when a new lease agreement is due to be signed or after the original lease has ended and the tenant agrees to an extension under new terms.
2. Landlords Must Provide Written Notice Before Increase- If a landlord wants to increase a tenant’s rent, the landlord must send the tenant a written notice. This notice can be hand delivered or mailed to the tenant. It is always a good idea to send this notice via certified mail so that there is a record that the tenant received it. Notifying a tenant orally of a rent increase will not hold up in court.
3. Landlords Must Provide Adequate Written Notice- For month to month tenants, it is common for a state’s law to require the landlord to provide notice either 30 or 60 days before the rent increase is set to take place. The amount of notice needed will often depend on the percentage the rent is being increased. In the city of Seattle and in California, if the rent will be increased by 10 percent or more, 60 days’ notice is required.
4. Amount of Increase- A rent increase must usually be considered reasonable, as determined by the local rental market. A landlord often increases rent to have a bit more money to cover expenses but does not want to lose a tenant. Increases may be used to cover growing real estate tax bills and insurance premiums. If a property is rent controlled, there are specific rules as to how much a rent increase can be and how often the landlord can increase the rent.
5. Tenant Can Fight Illegal Rent Increase in Court- If a tenant feels the landlord is increasing their rent as an act of retaliation or discrimination, he or she can take the landlord to court. An example of a retaliatory rent increase would be a landlord increasing a tenant’s rent because the tenant complained about a potential health violation at the property.
6. Right to Reject Rent Increase- A tenant does not have to agree to the rent increase. However, if he or she does not agree to pay the higher rent, and it is a reasonable increase, the tenant must move out of the rental unit. If the tenant stays in the rental unit once their old lease expires, they will be responsible for paying the new rent or else be subject to eviction and legal action.
Notice of Rent Increase for Month to Month Tennants
Name of Tenant
Address of Tenant
This Notice is to inform you that beginning on, Insert Date of Rent Increase, the monthly rent for the unit you currently occupy, Unit Insert Unit Number, which is located at, Insert Property Address, will be increased to Insert New Monthly Rent per month. This rental payment is due on or before the 5th day of each month.
If you wish to continue your tenancy, the new monthly rental payment of Insert New Monthly Rent is required. Please be advised that all other terms of your original rental agreement remain in effect.
Please sign the Notice below, indicating your agreement and continued tenancy or indicating your disagreement and subsequent termination of tenancy.
Thank you. We appreciate your continued tenancy.
Landlord’s Signature:_________________________ Date:______________________________________
_ _ _
___I agree to the new monthly rent amount of Insert New Monthly Rent beginning on Insert Date of Rent Increase and will continue my month to month tenancy as per our original rental agreement.
Tenant Signature:__________________________ Date:___________________________________
___I do not agree to the new monthly rent of Insert New Monthly Rent. I will not continue my month to month tenancy and will vacate the premises by Insert Move-Out Date according to the terms of our original rental agreement. (See Also: Sample Move-Out Checklist)
Tenant Signature:________________________________ Date:_________________________________________