Seeking a lease that will remain affordable
A buddy of mine just called with a classic tale of woe. Signing a one-year lease on a place he just loved, he took for granted the price and terms. When the lease expired and turned into a month-to-month, he was surprised by a 10% rent increase. Six months later, it shot up another 10%.
“How can they do that?” he asked. “Isn’t there a limit to how often and how much my rent can shoot up?”
That depends on exactly where you live and the laws that apply there. Lease arrangements, notice laws for the area and rent control can add to the confusion. Understanding a few basics may help keep your finances from unraveling:
* Which lease is best? A fixed-term rental agreement gives long-lasting protection, even if the property is sold. Usually fixed at a year, leases provide a written contract, agreeing to a price and terms for the rental that can be for any mutually agreeable length of time.
* What happens when the lease time is over? Read the fine print, since some automatically convert into a month-to-month situation.
Month-to-month agreements are the worst for rental increase protection, since most states allow raises based on just a 30-day notice or the length of the rent payment interval.
* Are oral notices allowed? No. Only written increases are permissible.
* How often can rent be raised? Assuming no lease or rent control is in effect, the rent can be raised as often as the owner wants as long as the notice period is obeyed. For example, if the notice is 30 days, rent could conceivably be raised every 30 days. Cities with rent control, such as Berkeley, Santa Monica and Washington, allow only annual increases for designated properties. Los Angeles, for example, has allowed 3% annually for the last several years.
There are exceptions. Some areas link the warning time to the rental increase. California requires that raises of more than 10% have 60-day notice. Less than 10% remains at 30 days’ warning. There are separate notice-law statutes for seniors and those with special needs.
* How much can it be raised? In non-rent-controlled areas, the answer is the sky’s the limit. But whatever the market will bear is most likely since move-outs cost owners money. Lost rent, painting and the hassle of showing the place add to the equation. In rent-controlled areas, annual allowable increases vary from a flat rate of $16 to a percentage based on rent ranging from 1% to 10%.
* Can it be prorated? Yes. Surprisingly, notice can be served any day of the month, not just when rent is due. For example, an increase letter dated the 15th could request the new rent 30 days later. Confusion is frustrating, so most owners stick to the rental due date for notice and increases.
* Other circumstances? Even with rent control, additional occupants may trigger rent increases. An increase based on capital improvements is allowed on a per-unit basis. Such improvements have to benefit the common area, such as a new roof or driveway.
* What if the rent increase is legal, but you think the amount is unfair?
Try a friendly chat with the manager or landlord. Asking to “split the difference” or delay the increase is worth a try. Point out the benefits of your remaining a tenant, especially if you have a proven track record. Don’t beat around the bush; if you rarely complain or cost management money, remind them in a nice way. Sometimes the owner will reconsider if the increase triggers a vacancy.
* What if the rent was raised to punish you for excessive complaining? Retaliatory increases are not allowed in most states. Check local laws or contact an attorney for details.
Remember that rent increases, like the rising cost of consumer goods, are a reality. The owner can only charge what people are willing to pay. If the rent is beyond your reach, consider stretching your resources or seeking other options. It’s up to you.
H. May Spitz is a Los Angeles-based freelance writer. Reader comments may be sent to hmayspitz@AOL.com.
