What you need to know about rent increases
Q: My landlord just gave me a rent increase notice. My rent is supposed to go up 25%. Is this even allowed? Can I contest this rent increase?
Now that it's the new year, landlords are sending out rent increase letters to their tenants. Much to our displeasure, we're all well aware that those always find a way into our mailboxes. 😭
What we didn't know was how much rent was going to increase in 2022. And for some, it's A LOT.
Typically, yearly rent increases range from 2% to 5%.
Yet, renters left and right are getting notices that their new rent costs are going to come with a hefty price tag.
Our findings have revealed that some landlords have raised the rent as much as $3,000 for some tenants! 😰 And it's no secret that pretty much no one can afford this kind of jump in rent.
Its left many people wondering. Are landlords allowed to do this?
How much can landlords raise the rent? Is it illegal to increase the rent by this much?
Unfortunately, the answer to this question is pretty much no. There are essentially no limits on rent increases nationwide.
Depending on where you live, landlords are allowed to raise the rent by $20 or $2,000.
And, we're not going to sugarcoat it. The US has terrible rent control policies. The issue is that there are almost no states that regulate rent raises.
Yet, a few lucky places do have rules involving rent increases.
Which states have rent control laws?
Out of 50 US states and the federal district of DC, only two places have statewide rent control laws. And the lucky states are- Oregon and California.
Oregon is the only place that controls rent increases throughout its entire state. Given state laws, municipalities can't place their own rent control laws on top of that.
Landlords in Oregon are only allowed to increase the rent according to the Consumer Price Index plus 7%.
On the other hand, California has statewide caps. They, additionally, allow cities to set specific rent control laws.
Californian landlords can only raise the rent by 5% plus the increase in the regional Consumer Price Index. Landlords also get a second option. They can increase the rent by 10% off the lowest rental rate from the past 12 months. However, they must choose the option that provides the lowest rent.
What other states have rent control laws?
Technically there are no other states with rent control laws. But not all hope is lost.
New York and New Jersey allow cities or counties to implement rent control laws. Washington, D.C. also controls rent increases in the district.
Maryland only has one city with rent stabilization- Takoma Park. In the city, an annual rent stabilization allowance gets published every spring. This tells landlords the maximum rent price they can charge for that year.
Here's a list of every other location that has rent policies set in place.
The following states preempt rent control. What this means is that all municipalities within the state are banned from controlling or stabilizing rent.
All the other states that weren't mentioned in the list above have no rent control laws. Since they don't preempt rent control, there's always a chance of cities placing laws in the future.
Most places don't have rent control laws. Does that mean landlords can increase my rent whenever they want?
Even without rent control laws, your landlord can't just raise the rent willy-nilly. There are three things every renter should look out for. Your lease's rules, the frequency of the rent increases, and how the notice is delivered.
How can your lease agreement impact your rent increase?
If a landlord is hiking up your rent before your lease ends, one of two things is happening. One: your lease agreement allows rent increases throughout your tenancy. Or two: you are living month-to-month and don't actually have a traditional lease.
A third option would mean that none of these scenarios apply to you. In that case, your landlord is breaking the rules and shouldn't be increasing your rent!
If you signed a fixed-term lease, your landlord can't raise your rent until it expires or is up for renewal.
However, renters paying month-to-month abide by different rules. These agreements allow landlords to increase the rent or change the terms of their lease.
How often can a landlord raise the rent?
Like we said above, rent increases can only be given to renters whose lease agreements are ending. Usually, that would pan out to about once a year.
Month-to-month renting is a different story. Landlords can raise their rent so long as it's at the end of the month and a 30-day notice is given.
How much notice does a landlord need to give for rent increases?
In most states, landlords have to give written notice at least 30 days before the intended rent raise.
On top of that, the notice has to be in writing. It must include:
* Tenant's name
* Rental address
* Current rent price
* Proposed new rent price/Increase amount
* When the new rent price will take effect
* Date of when the new rent is due
This all, of course, depends on your city or state of residence. Let's use California as an example. Landlords have to provide California renters with at least a 60-day advance notice.
Also, notices that are delivered orally aren't allowed. So, don't feel obliged to pay rent increases that are given through word of mouth.
When are rent increases illegal?
Rent increases can sometimes go against tenant laws. Here are a few situations where it would be illegal for a landlord to raise your rent.
- Your lease has a rule against rent increases.
- Your landlord didn't give you the appropriate advance rent increase notice.
- Your landlord is trying to raise the rent before your lease expires.
- Your unit is rent-controlled.
- The rent increase acts as retaliation against you- the tenant.
- Your landlord is increasing your rent to force you to move out.
- The rent increase is an act of discrimination against you, under the Fair Housing Act.
- Your landlord is raising the rent more than the allowed amount (only applicable in certain cities).
What can you do if your landlord has illegally increased your rent?
You can always start with the more civil route. Try talking to your landlord to get clarification on the matter. A friendly smile and calm attitude can have a surprisingly positive effect on people.
If there's no reasoning with them, you should consider contacting a local housing authority or a lawyer in your state. They'll be able to tell you the appropriate course of action and what legal steps you can take.
Some people might decide to make a more passive choice. They’ll just ignore the rent increase. If you do this and your landlord threatens you with eviction, just be wary of the following details. Landlords are not allowed to remove a tenant unless they have a court order for eviction. They also can’t shut off your utilities, change your locks, or remove your belongings from your home.
We would never recommend letting a situation escalate this far. Legal proceedings can hurt your rental background or your chances of renting in the future. We would advise that you become well aware of your rights and obligations.
What should you do if your landlord legally raises the rent but you can’t pay it?
In this case, your only option might be to move out of your rental apartment. Don't forget- you should try to keep a good relationship with your landlord so they can give you a reference!
If you do decide to move out, keep these renting tips in mind:
- Consider looking into rent-controlled units (if they exist in your area)
- Expand your rental search by looking in more suburban areas. These areas usually have way cheaper rent.
- Go for a longer fixed-term lease. If you know you're here to stay, try getting a lease that is more than a year long.
- It never hurts to negotiate rent prices. You can always try your hand at it! Who knows? A landlord might be inclined to accept your request (especially if it's the low-peak season).
- Roommates usually have cheaper rent. The easiest way to knock your rent down a handful of dollars is to live with others. It's also a good solution for those who love company or living with other people!
There you have it! It's unfortunate to realize that even $3,000 rent hikes can legally happen in the US. Yet, we hope we cleared up a topic that can be pretty confusing and stressful.
We can't close out this article without mentioning one more trick we have up our sleeves. We're just as tired of high rent prices as most renters. We see you. Here at Lighthouse, we offer cash back on newly signed leases. If you're ready to move, don't miss the opportunity to profit off your rent (instead of losing more money because of it). Check us out here for more information!