Are there legal limits when it comes to landlords raising rent? This question often comes up at the end of a lease term, when a landlord will typically raise the rent if a tenant wants to enter into another rental agreement.
Generally speaking, unless there's a specific law in place (like a local rent control ordinance), there is usually no limit on how much a landlord can raise the rent. But this can also depend on other factors, including the type of lease at issue.
Here's an overview of what tenants and landlords need to know:
What Type of Lease?
A tenant's lease should be the first place one looks to answer questions about rent. If a tenant has a fixed-term lease (a 1-year lease, for example), then the landlord generally cannot raise the rent during that term, unless the lease specifically allows for it. In such a case, raising the rent can potentially be considered a breach of contract.
However, if the lease at issue is for a periodic term (week-to-week, for example), then the landlord is generally allowed to raise the rent. Generally, there must still be proper written notice given to the tenant. You'll want to check your state and local laws about this, because the amount of notice required can vary.
What Do State, Local Laws Say?
State laws will often spell out how much written notice a landlord must give before a rent increase takes effect. In some urban areas where real estate is at a premium, local ordinances can also place limits on rent increases.
For example, here's a look at some of the laws about raising the rent in three major states:
- California. Under California law, a landlord must give a tenant at least 30 days' written notice if the rent increase is going to be less than a 10 percent hike. If the rent increase is greater than 10 percent, then a landlord must then give 60 days' notice. Some cities like Los Angeles and San Francisco have also enacted rent-control laws that limit the amount of rent increases.
- New York. Rent control is still very much in effect in New York City and a few other localities as well. There are even rent-stabilization laws that allow local governments to limit rent increases to certain rates. However, if an apartment is not rent-controlled and a tenant is operating on a month-to-month lease, then a landlord may raise the rent as long as the tenant gives his consent. Otherwise, the landlord has the right to terminate the tenancy, after giving notice.
- Texas. Much like other states, Texas' laws on raising rent depend on the type of lease. For example, if a tenant has a month-to-month lease, then either party must give a 30-day advance notice of any proposed changes, including a rent increase, according to the State Bar of Texas. If a tenant does not clearly terminate the lease, then that inaction can be presumed to be acceptance of the new rent.
Lastly, remember that while there might not be a legal maximum on how much rent can be raised, a landlord should still have a legitimate reason for doing so -- for example, it can't be for a discriminatory purpose, the Chicago Tribune reports. To learn more about your rights in a specific rent-increase situation, it may be best to consult an experienced landlord-tenant lawyer near you.
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