Sample Rent Increase Letter for Yearly Tenants

Proper Procedures for Raising Rent

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Increasing your tenant’s rent is your right as a landlord. However, there are certain laws you must follow when doing. You must usually send the tenant written notice a certain number of days before their lease expires.

Here are some five facts about raising a yearly tenant’s rent and a sample letter to review.

Benefits of Increasing a Tenant’s Rent

To Keep Up With Fair Market Rent
You may want to raise a tenant's rent to keep up with other rental prices in the area.

You Have Had an Increase in Expenses
You may want to raise a tenant's rent to keep up with increased expenses, such as higher utility bills or property taxes.

You Have the Legal Right To
You may decide to raise a tenant's rent because you have the legal right to do so every year.

Risks of Increasing a Tenant’s Rent

Tenant Moves Out
The biggest issue you may encounter when trying to increase a tenant's rent is that the tenant decides not to renew their lease and moves out. You will then have to deal with vacancy costs and finding a new tenant.

When Can You Increase the Rent?

Generally, if you have a tenant who has signed a fixed-term lease agreement, such as a year, you are only allowed to increase the rent once the lease term is over. So, if you have a tenant who has signed a yearly lease, you can legally raise the rent once that year is over.

Providing Written Notice

In most situations, you must provide a tenant with prior notice before you can increase their rent. You must send a written notice to the tenant, notifying them of your desire to increase their rent.

This letter must be sent before the lease term ends. How far in advance you must send this notice will vary by state, but expect to be required to send it between 15 and 60 days prior to the lease termination date. 

Some laws will allow a landlord to raise the rent during a fixed-term lease agreement. To do so, the lease must clearly say that the rent may be raised during the lease term.

How Much Can You Increase the Rent By?

Many states will set limits on the amount you can increase a tenant's rent by each year. They will only allow you to raise the rent by a certain percentage each year, for example, a five percent rent increase each year. It is why you must know your state's laws; so you know if there is a limit to how much you can increase the rent or if you are free to raise it by any amount you choose.



TO: Insert Name of Tenant

      Insert Address of Tenant

      Insert Unit Number

1. Purpose of Notice: This Notice is to inform the Tenant that the Landlord will be increasing the Tenant’s rent. 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. The Tenant’s current tenancy will be terminated on Insert Termination Date as per the term of the original lease agreement.

The Tenant is being offered a new lease at the new monthly rent of Insert New Monthly Rent. This change and any other reasonable changes can be found in the Tenant’s new lease agreement.

2. Termination of Tenancy: The Tenant’s tenancy will expire on Insert Date Current Lease Expires. If the Tenant does not agree to rent the unit at the increased monthly rental price, the Tenant and all occupants of the unit must vacate the unit by Insert Date Current Lease Expires. The Tenant must adhere to all move-out procedures, including leaving the unit broom-swept clean.

3.Acceptance: If the Tenant agrees to rent the unit at the increased rental price of Insert New Monthly Rent, per month, the Tenant may remain on the premises, but must sign and adhere to the terms of a new lease agreement at the agreed upon monthly rent. By remaining in the property after the termination date of the original lease agreement, the Tenant is agreeing to the increased monthly rent and to adhere to any other reasonable changes to the lease agreement. This rental payment is due on or before the 5th day of each month.


Landlord Signature:______________________