If a landlord wishes to increase the rent on a residential property, issuing a Notice of Rent Increase would be in order. With the notice, the landlord can officially notify their tenant of any change in the cost of rent. A Notice of Rent Increase also serves as a legal record in the event that the tenant fails to comply with the new rent.
When a landlord leases their residential property to a tenant, the cost of the rent is agreed upon by both parties and usually recorded in a lease agreement. If the lease agreement allows the landlord freedom in changing the amount of rent due after a period of time, the landlord can issue a Notice of Rent Increase to formally notify the tenant of higher rent going forward (starting from a date specified in the notice).
This is a notice of a future rent increase that effectively enables the tenant to prepare for the higher rent. However, if the original lease agreement explicitly prohibits the landlord from increasing rent, the tenant is under no obligation to pay the higher rate.
A landlord can always use a Notice of Rent Increase to inform a tenant that any lease renewal would come with a higher rent, in which case the notice is usually issued 60 days before a lease agreement is to expire.
Depending on your state, a Notice of Rent Increase may also be known as:
Any landlord who would like to collect a higher rent should use a Notice of Rent Increase to inform tenants of the proposed change. With the notice, a landlord can prove that the rent increase has been communicated to the tenant. A landlord can also use the notice as a formal document in court should a tenant fail to comply with a legal rent increase.
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The landlord should sign the Notice of Rent Increase, as should the individual delivering the notice to the tenant, if different from the landlord. You do not have to get the document notarized.
After printing out a copy, signing it, and arranging to have it delivered to the tenant, the landlord should keep a copy of the notice in their records, preferably together with the original lease agreement.
Landlords may increase the rent for any number of reasons, as long as it is not contractually or legally forbidden. Some of the most common reasons include higher property taxes, higher cost of living, rising property value, higher landlord insurance premiums, etc. On the other hand, a landlord cannot raise the rent if it's ruled out in the lease agreement or outlawed by the local rent control law.
The landlord may decide to deliver the notice in person, via email, by mail, or arrange to have someone or a company deliver it to the tenant's door. The original lease agreement may specify how future documents are to be forwarded to be valid. Consult the lease before sending your Notice of Rent Increase.
The most obvious consequence is that a landlord would be unable to enforce the rent increase without a Notice of Rent Increase. A verbal agreement does not legally replace a physical notice.
If not otherwise prohibited by the lease agreement, a landlord can send a Notice of Rent Increase at any time. However, it is standard practice to inform a tenant at least 30 days in advance. Depending on your state and jurisdiction, there may be a mandatory notice period of at least 15 days.
There is no limit except if prohibited by law. In general, landlords can raise rents by 1-2% every couple of years without raising eyebrows. For difficult tenants, such as those who have a history of inflicting property damage, it is not unheard of for landlords to charge 3-4% or more, perhaps to recoup losses or as insurance against future damage.
To avoid pricing your property out of the market, check rental rates for comparable properties to yours in the area.
This type of notice is not designed for use regarding fixed-term leases. Without a mutual agreement, the landlord cannot raise the tenant’s rent in the middle of the fixed term.
However, since fixed-term leases don’t automatically renew, an increase in the rent will be an aspect included in the renegotiation of the lease.
Generally, you will deliver a notice of rent increase either by mail - first class, registered, or certified - hand delivery, or door affixation. You should still check your state’s tenant laws to ensure compliance.
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