How to Increase Rents

Raise the rent by providing notice to the tenant.

As a landlord, you have the option to increase the rent at the end of a lease term. Send the notification to your tenant in advance of the lease renewal date, along with an updated lease or addendum. Become familiar with local rules and ordinances that may apply with respect to rent control.

Instructions

1. Determine the reason for the increased rent. Landlords cannot arbitrarily raise rent based upon discrimination. Federal law prohibits a rent increase based on race, gender, national origin or religion. Some states also make it illegal to adjust rent based on marital status, children, sexual orientation or disability. Increased expenses on the property, such as insurance rates and taxes, qualify as permissible reasons to raise rent.

2. Provide the tenant with advance notice. Check the law in your state for guidelines on providing notice. In Maryland, for example, notice must be sent at least three months prior to the expiration of an annual lease term, according to the Peoples Law website. If the terms of the lease are month to month, a landlord can raise the rent at the end of 30 days.

3. Send a written notice to the tenant, by regular mail or certified mail, return receipt requested. If you explain the reason or reasons in the notification, make sure you can legally support the basis for the adjustment. Clearly indicate when the increase will take effect.

4. Send a revised lease containing the new rent amount. Alternatively, you may utilize an addendum that incorporates the original lease but indicates the new amount that will take effect and when it's due. Request that the tenant sign the updated lease or addendum.

5. Know whether your property is allowed a rent increase. There may be restrictions on rent increases under government subsidy programs, such as Section 8 housing or other types of laws. In some parts of New York, for example, rent control applies to residential buildings built prior to 1947, according to the New York City Rent Guidelines Board.

Tips & Warnings

• Raising the rent during the lease term would constitute a breach of the lease, so make sure it takes effect at the renewal date.

References

• Real Estate Law Free Advice: Landords Increasing Rent
• Peoples Law: Termination of Tenancy/Altering Lease Requirments
• New York City RGB: Tenants' Rights Guide