Q&A: Can landlord charge different rents for lease vs. monthly tenants?

Question: In the past, I have routinely renewed my one-year lease with no hassles. This year, however, I told my landlord that my company might be transferring me as part of a reorganization. Because of this uncertainty, I asked my community manager if I could simply convert to a monthly rental agreement rather than commit to a one-year lease.

To my surprise the manager said that a monthly agreement was acceptable but that I would have to pay $200 more per month to move from an annual lease to a monthly rental agreement. Can landlords impose a price differential depending on the duration of tenancies or is this some type of hidden price discrimination against monthly tenants? I have always paid my rent on time and, in my view, been a model tenant.

Answer: Sadly enough, it is becoming increasingly common for landlords to create and implement a tiered rent structure based on the duration of your rental agreement.

This makes sense from landlords’ perspective as they feel more secure with a longer rental commitment. In exchange for a tenant’s written promise to rent for six months or one year they are much more willing to give a more competitive rental rate.

When a monthly tenant decides to vacate after a couple of months, a landlord will incur additional “move out” expenses, in addition to possibly losing rental income until the unit has been rented by a new tenant. The landlord may have advertising expenses, cleaning expenses and perhaps even repair expenses if the short-time tenant has caused damage to the unit that is unrecoverable.

Your thought that a tiered rate might be a form of price discrimination is not valid. Monthly tenants are not a protected class under the discrimination laws. Also, there is no landlord tenant law apart from the discrimination statutes that would prohibit such price differentials.

Your best bet in this situation is to approach your landlord to try and make the case that your positive rental history at the property justifies giving you the lesser rate; though, as previously mentioned, the landlord is under no obligation to grant this request.

For more information, contact a local fair housing or mediation program, or Project Sentinel at (888) 324-7468, or visit our website at https://www.housing.org.

Van Deursen is director of Dispute Resolution Programs for Project Sentinel, a Bay Area nonprofit. Send questions to info@housing.org.