Is That Rent Increase Illegal?

Rents are rising all the time. Inflation, building improvements, housing shortages, and gentrification all play a part. If you rent a single home long enough, you're almost sure to see a rent increase or two eventually. Done correctly, rent increases are a practical and even necessary part of the landlord-renter ecosystem. However, you can't always trust your landlord to raise the rents correctly, fairly, or even legally.

  • Thursday, November 21, 2019

  Legal   Rent Increase   

Rents are rising all the time. Inflation, building improvements, housing shortages, and gentrification all play a part. If you rent a single home long enough, you're almost sure to see a rent increase or two eventually. Done correctly, rent increases are a practical and even necessary part of the landlord-renter ecosystem. However, you can't always trust your landlord to raise the rents correctly, fairly, or even legally.

If your landlord has just let you know that you should expect a rent increase, you're probably wondering if that's even legal. In many cases, it is. But the law clearly defines when, how, and sometimes how much a landlord is allowed to raise the rent and when their grab for cash is a clear violation of your tenant rights. Today, we're here to help you answer the question "Is that rent increase illegal?" once and for all.

Quick Answers

There is so much that goes into rent increase legality. It depends on the type of home you have, the type of renting you're doing, and the specific terms in your lease. But we'll start with a quick reference of the most important highlights.

My Home is Rent Controlled

  • Your landlord cannot raise the rent above the rent-controlled price ceiling, or exceed the allowed percentage increase.
  • Your landlord can (usually) only raise the rent from one lease to another

My Lease is Month-to-Month

  • Your landlord must give you 30 days notice to prepare for the rent increase

I Have a Year (or longer) Lease 

  • Your landlord can (usually) only raise the rent from one lease to another

Why Landlords Raise the Rent

  • Rental Prices are Rising for Similar Nearby Homes
  • The Home is Updated or Renovated
  • Building Amenities are Added
  • The Landlord Takes On Additional Expenses
  • Renter Increases Cost or Risk to the Home

Check Your State and City Laws

Each state and, sometimes, each city handles rental laws a little differently. The rules are mostly the same from coast to coast in the US but specifics, such as the terms of rent control, can vary in detail. For example, some states/cities have an absolute cap on rent control while others allow for a small percentage increase each year to allow for inflation. The specifics of how you receive a rent increase notice may also vary, so be sure to check the tenant laws for your state and zip code just to be certain.

When Rent Increases are Legal?

There are a number of specific ways that a rent increase can be illegal, so it's easiest to get started by defining what a legal rent increase looks like. Once you understand what the law says is allowed, it's easier to get a grasp on how violations and variations from these rules would be considered illegal. And just how illegal an unlawful rent increase really is. Understanding rent increase legality can also help you to cross off a fully legal rent increase from your worries.

Month-to-Month Renting

If you are renting month-to-month, your landlord is allowed to raise the rent on you with 30 days notice. Provided that the increase does not violate any other laws, like rent control set for your home or apartment unit. If your home is not rent-controlled, the only requirement for rent increases on a month-to-month tenant is a full 30 days warning before the rent goes up.

There is no limitation on how much the rent can increase, but the notice protects your right to prepare your finances for the increase or find somewhere new. Landlords who don't give you notice may be trying to "trap" you into a housing situation where you don't have time to find a new place and are forced to pay the increased rent.

Starting Your Next Lease

For lease-holding tenants, your landlord is allowed to raise the rent between leases and does not necessarily have to give you warning before this happens. Usually, a landlord will have the new lease ready for you within the last month of your tenancy which serves as your written notice of increase. But in most states, there is no standing law on how much forewarning you are provided on the rent increase.

It's safest to assume that any lease renewal may come with a rent increase and to skim each new lease just in case.

According to Specific Lease Conditions

Landlords are usually not allowed to raise the rent mid-lease. However, the specific terms of your lease can create a loophole. However at that point, what is legal is defined by the terms of the lease. For example, if your lease permits the landlord to raise the rent by $25 a month if you get an approved pet, then a new pet will make an exact rent increase of $25 legal. However, if they charge you more, or if they raise the rent mid-lease outside of written-in lease clauses, that would be illegal.

When You Both Agree On a New Rent

Another example of a legal mid-lease increase is if you both agree (in writing, oral agreements are never sufficient) to a higher rent. You may be wondering why anyone would do this, but there are situations where an agreed rent increase is a practical option for landlords and tenants. When a tenant asks for improvements, new appliances, renovations, or special permission for pets or roommates, these might lead to a mid-lease agreement to raise the rent in return for things the tenant wants that would cost the landlord more than usual.

If you agree, in writing and signed, to increase the rent a specific amount, this is a legal increase.

When the Increase Does Not Exceed Rent Control Limitations

Rent control is set by a city or state for a number of reasons, but the rules are the same. If a home is considered rent controlled, then there is a cap on the amount your landlord can charge per month. This cap may be absolute or it may limit rent increases to a specific percentage, usually around 3%. If you live in a rent-controlled home, don't assume that the rent cannot possibly increase. If the rent is lower than the rent control amount, then the rent can be increased up to that point without any other limitation.

But watch out. If your city defines a rent increase percentage instead of an absolute cap, your landlord may raise the rent every year by the maximum allowed amount.

When is Rent Increase Illegal

Now that we've defined all the situations where a rent increase is legal, it's much easier to define when a rent increase is illegal and to identify unlawful increases from ignorant or greedy landlords. It is important to remember that not all landlords who raise the rent illegally are doing so knowingly. There's no license or test to become a landlord, and many landlords aren't actually aware of the local laws or tenant rights.

It's your job to protect your own tenant rights by being aware of what defines an illegal rent increase. 

Month-to-Month Without 30 Days Notice

If you have a month-to-month tenancy, with or without a lease, your landlord is required to give you at least 30 days notice before increasing the rent. They can give you longer notice, but less than 30 days is a violation of nation-wide tenant rights. This gives you time to find someplace new if you cannot or will not pay the increase. If your landlord fails to give you 30 days notice (not a month, a full 30 days) then they have broken the law.

Mid-Lease Without Lease Agreement

Tenants with leases longer than one month have a protected rent amount for the duration of the lease. That is part of the point of signing a lease. Your lease defines what the rent is, how long the rent will be that amount, and any terms that might change the rent mid-lease. However, if your landlord informs you of a rent increase to begin before the end of your lease that is not accounted for in the lease terms, and that you did not agree to with your landlord ahead of time, then this is an illegal mid-lease shakedown.

Verbal-Only Rent Increase Notice

To increase your rent, your landlord must give you a notice in writing. Whether you have a lease or are renting month-to-month, your landlord must give you a written notice and, in some states, it must be delivered through certified mail to create a paper trail. For month-to-month tenants, this will be your 30-day written notice of rent increase. For leased tenants, this will either be your new lease or a written and signed agreement between the two fo you to raise the rent mid-lease.

Simply being told by your landlord in person, over the phone, or in an unsigned note is not sufficient to qualify as a legal (or legitimate) rent increase. And any action they take to claim that extra rent will not hold up in court.

Exceeding Rent Control Limitations

And, of course, your rent in a rent-controlled home may not exceed the cap. Know the rent-control cap for your home, and the yearly percentage increase if there is one, to know if your rent increase is legal.

What Should I Do About an Illegal Rent Increase?

Finally, there's the question of what to do if your landlord levels a rent increase that is illegal. You have four options here. You can pay the increase anyway, you can object and negotiation, you can move out, and/or you can take legal action.

When to Pay the Increase Anyway

We know, it sounds crazy. But let's say you're renting month-to-month and the increase isn't a problem for your finances, but your landlord only gave you 28 days notice. In a situation where you would normally pay the increase, but the situation is very slightly illegal, it's okay to let it ride. Usually, these cases occur when your landlord is not fully aware of the law or made a minor mistake.

When to Move Out

If your landlord has asked for an astounding rent increase or has done something so apalling that you would not be comfortable staying in the home, it's time to look for someplace new. For tenants, it's important to judge if you feel safe in a rental home. However, choosing to move out in response to an illegal demand for rent increase often goes hand-in-hand with taking legal action against the offensive landlord.

When to Negotiate

If the rent increase is a little too high, a little too short-notice for your finances, or for legitimate reasons that were not defined in the lease, then negotiating is often the right answer. Get in touch with your landlord. Point out that their demand is technically illegal, but that you're willing to talk. For example, if the landlord makes requested improvements and asks for higher rent, you might put together a legal agreement and sign it. Or if the rent increase is a little more than you can handle, consider asking for a slightly smaller increase, or to experience the increase over a few months while you sort out your finances.

It's often worth your while to negotiate. Remember, not all landlords know when they're breaking the law and most are open to discussion.

When to Take Legal Action

Finally, it's time to contact a tenant rights lawyer when your landlord has seriously overstepped their bounds or demands increased rent despite being told this is illegal. You will, at the very least, need to consult with a lawyer and it may be necessary to take your landlord to court. If you have the time and funds, you can save not only yourself but other tenants under the aggressive control of this type of landlord.

DISCLAIMER:

VerticalRent® is not a law firm, and the employees of VerticalRent® are not acting as your attorney. Our educational blog or landlord forms engine is not a substitute for the sound advice of a local attorney, whom is familiar with your local laws and regulations. VerticalRent® cannot provide you with legal advice, nor are we permitted to engage in the practice of law.

We are prohibited from providing you with any sort of advice, opinion, explanation, or recommendation about your possible legal rights – which may include remedies, options, defenses, or the selection of landlord forms available on the VerticalRent platform. Our platform is designed to provide landlords and property managers with powerful online tools to screen applicants, collect rent online, advertise vacancies, and generate free landlord forms. To that extent, our blog often publishes general information on issues commonly encountered by landlords – such as evicting tenants.

Although VerticalRent takes every reasonable effort possible to ensure the accuracy of its consumer reports and landlord forms, we do not guarantee or warrant the information to be correct, complete, or up-to-date. The law changes rapidly across the United States, from jurisdiction to jurisdiction. We will not be held responsible for any loss, injury, claim, damage, or liability related to the use of our blog, landlord forms or consumer reports generated from this platform.

 



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