One of the most delicate issues faced by all landlords is the issue of rent increase. Even in housing markets where demand for rented units outstrips supply, landlords find it awkward to increase their rents as they know many of their tenants will be antagonized by this decision. However, it is necessary for landlords to regularly increase their rents to cover their costs. It is possible to increase the rent without annoying or creating panic among the tenants.
Things to do before rent increase
It is important for all landlords to go through the terms of the lease of every tenant before taking any action about rent increase. There may be a clause mentioning the procedure of rent increase. May be a new lease needs to be signed whenever rent is increased by the landlord. If the lease term end is far away, landlord should check if it is possible to increase the rent or not. In many counties, government has placed restrictions on the amount or percentage by which the rent can be increased. If the landlord has received subsidies from the government, it imposes restrictions on the ability to increase the rent. If there are rent control laws in your city, they severely limit your ability to increase rent. Because of these reasons, it is prudent to consult an attorney before taking any action on rent increase in your rental property.
What to include in your rent increase notice?
All landlords are required by law to send a notice for rent increase one month in advance before this increase takes place. This is necessary to prove that communication was sent to the tenant in this regard. It should be titled Notice for Rent Increase to clearly communicate the message. This notice must include the following basic information.
- Date on which notice is sent
- Date on which increase takes effect
- Rent amount after increase
- Instructions on how to sign the new lease
- Information that is required by the law
If the tenant is not a native English speaker, the landlord needs to send notice not just in English but also the native language of the tenant. This helps in clear understanding of the notice and prevents any misunderstanding or strain in landlord tenant relationship. Finally, the landlord should keep a copy of the notice sent to each one of the tenants.
Other important points to consider
Rent increase should not be discriminatory to tenants. This means all landlords should have a clear understanding of fair housing laws so that do not discriminate on grounds of gender, age, religion, familial status, or number of children. If the tenant belongs to a protected class, charging higher rent could be in violation to fair housing laws.
If you’d like to talk more about property management, or you need help with Everest Property Management, please contact us at Everest Realty.
As a top producing Realtor and Property Manager; Terry specializes in sales, extensive construction homes, rentals, REO’s, short sales, and all aspects of Real Estate. After graduating the University of Michigan with a master in MBA, Terry continued his endeavor and now has over 15+ years of experience in the Real Estate world. If there is anything that has to do with Real Estate and sales, you can always be sure of Terry to provide important, specialized knowledge.
