Limits on rent increases
Q: I am on a month-to-month lease. I received a rent increase in October 2000 from $790/mo. to $819/mo. to remain on month-to-month. My complex is now under a new management company and I received a letter stating that to comply with the market value, I will receive yet another rent increase with the following lease options: $845/1 yr.; $920/6 mo. or $945/month-to-month. I understand that I'm on month-to-month lease, and therefore I don't have a leg to stand on. But, I would like to know what the percentage rate increase limits for rental properties in the state of Maryland are? When I received my last increase in October 2000, I was told it's 4% for a 1 yr. lease and 7% for month-to-month. Is this correct?

A: As our soon to be departed President once said, "I feel your pain." Well, at least some of it anyway, because my rent just went up 8% beginning this month. Of course, if I tell you that's the first increase in four years, you'll have no sympathy whatsoever. And, as for the President, remember he lives rent free in the White House. So he doesn't really feel your pain.

First, if the rental increases get too steep, you may have to vote with your feet. If enough tenants leave, the landlord may have to lower the rents or at least halt the increases depending upon the housing market conditions in your area. Of course, I know this is easier said than done.

But, unfortunately, you're right. On a month-to-month lease, you have very little protection against rent increases in most states. The general rule is that landlords may raise the rent as often as they like. However, they must provide notice equal to the rental period. For example, they must provide one month's notice to a tenant on a month-to-month rental.

The length of notice required, however, varies from state to state. Some states require as much as a 60-day notice and some states require as little as a 10-day notice. The majority of states, however, require a 30-day notice.

For the rules that apply where you live, it's very important to check your local laws. Check with your local city or county government for a department of housing, consumer affairs, or similar agency. Or, check with a local tenants' rights organization. Here's a list of the Tenants' Union organizations nationwide. Many cities or counties, especially in heavily populated areas, may have local restrictions stricter than the law that generally applies in that state.

For example, Montgomery County, Maryland requires 60 days notice of any rental increase and limits rental increases to once every 12 months. (If you live in Montgomery County, Lisa, see the following link to the Montgomery County Dept. of Housing and Community Affairs Landlord Tenant Guide.)

In addition, California recently enacted a statewide law offering some protection against rental increases, which goes into effect January 1, 2001. The new law requires that a landlord provide 60 days notice of any rent increase, but only if it constitutes more than a 10% increase within the past 12 months. For example, a landlord could raise your rent 7% on January 1, 2001, with only 30 days notice. Then, if at anytime during 2001, the landlord wanted to raise your rent more than 3%, it would have to give you 60 days notice of the second increase during that 12-month period.

On a fixed term lease, such as 6 months or one year, you are protected from a rental increase. Your promise to commit to a longer stay in the property is exchanged for the landlord's promise not to raise the rent during that stay. So, if your landlord tries to raise the rent in the middle of a fixed term lease, you should complain.

In a rent control city, such as New York, San Francisco, Oakland, Berkeley, San Jose, Santa Monica, D.C. and other cities, you may have many other additional protections from rental increases. Even in a rent control city, however, not all rental units are rent-controlled. Rent control regulations vary widely by city so you must check with the local fair housing or rent control board for specific guidelines.

For more information on what to do about rental increases, check back in two weeks for the next column.

Mandatory notice for rent increases
Q: I'm not on a lease, but month-to-month. My apartment complex was just bought, and the new owners mailed me a letter postmarked 9/25 announcing that my rent has been raised from $530 to $550 if I sign for six months. It also stated that if they did not hear from me by 9/28 that they would assume I was going to continue on a month-to-month basis and that October 1 they would expect my payment for $575 (rent + the $25 fee for being month-to-month). Is this legal? My sister said they have to give 30 days notice of an increase in rent. They dated the letter 8/30, but like I said, it was postmarked 9/25.

A: Well, your sister's right, at least this time. Even if you're on a month-to-month rental basis, the landlord must give you 30 days notice of any rent increase. If your letter was postmarked only 5 days before the rent increase started, that isn't sufficient.

So, now what should you do? I'd write a firm but polite letter to the landlord. You should explain that you don't believe he gave the required 30-day notice of the rent increase based on the postmark on your letter. Acknowledge that you received the notice and that you will pay the increased amount beginning November 1.

In addition, I'd let the landlord know whether you'd like to sign a new lease. As you experienced renters know, this is a common rental increase tactic. Many landlords reduce the rent increase if the tenant will commit to a term lease of 6 months or more. Some landlords offer even greater reductions for a commitment to a term lease of one year. The differing rates for the year, 6 month and month-to-month rental arrangements are perfectly legal.

What if the landlord doesn't offer you a reduced rent increase for committing to a term lease? Well, it doesn't hurt to ask, especially if you're a good tenant. Sometimes, the landlord may not want to lose you as a tenant, especially in a smaller complex. A landlord has to weigh the possibility of increased income from a new tenant willing to pay the higher rent against the possibility they'll be a less desirable tenant than you. The extra income might not be worth it to them. Of course, a little persuasion never hurts either.

In short, landlords don't always know what will happen when they raise the rent, even though they ordinarily try and keep rents competitive. They expect to lose some people, and sometimes they want to encourage less than ideal tenants to move. But, if the reaction to a rent increase is too negative from too many people, your landlord may be willing to discuss the increase.

Q: If a rental lease renewal has been signed by both tenant and landlord, and the landlord decides to collect the rental increase a month early without anything in writing, is the tenant obligated to pay that increase without either initialing the original lease or getting a new lease produced for new signatures? The tenant is a 25-year tenant of a mobile home park, owns the mobile home, and rents the land. The landlord indicated that he didn't think he'd get the contracts out on time, so he put a December 1, 2000 date on the contracts. But, he wants the increase to start November 1st. He did not send out letters, but simply verbally got people to pay the increase for November. This is a senior mobile home park.

A: Well, the general rule is that the tenant would not be obligated to pay the increased amount for November. If he didn't give the proper length notice of the increase for December, he doesn't have the right to collect the increased amount for December either. It may be January before he can collect the increased amount. But, this is a general rule that applies to residential housing. Some states have a separate set of laws that govern mobile home parks and the rental of spaces there. So, you may want to check with a local mobile home owners' organization if there's a group like that in your area.

Disclaimer
Information provided by Phil or Greg should not be construed as real estate or legal advice. State and local laws may vary, so please consult legal counsel in your area with respect to your individual situation.

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