A Notice of Rent Increase is a written letter from a landlord to a tenant that officially communicates a change in the amount of money due.
What is a Notice of Rent Increase Letter?
Landlords often send notice of rent increase letters when they want to change a tenant’s monthly rent to a higher amount.
As a reference, a notice of rent increase is also known as a Rent Increase Letter.
If there is no lease or the lease has expired, and the tenant has not signed a new lease, the landlord must follow state and local laws and give an appropriate advanced warning.
Be sure to check your city laws since some municipalities have rent control or rent stabilization laws limiting how much or when landlords may increase rent.
What is in a Rent Increase Letter?
A simple notice of rent increase letter identifies the following essential elements:
- Premises: address and location of rental property
- Current Rent: the amount of money the tenant has been paying the landlord
- New Rent: increased amount of money the landlord requires
- Effective Date: when the tenant must start paying the new rent amount
- Tenant: name of the person currently renting the premises
- Landlord: name of the person who owns the premises
When You Should Send a Rent Increase Letter
If you have a lease agreement and the lease has not ended, check your contract to see if you can increase the rent. If you cannot increase the rent, you must wait until the lease expires.
You could, however, send a letter 60 days before the lease ends to give tenants an advanced warning in case they want to renew their agreement under a new increased rent.
If you have had good experiences with the tenant, you could also waive the rent increase to avoid the hassle of finding another tenant, should your current tenant not want to pay a higher amount.
If you do NOT have a lease agreement or the lease has already expired, you must send a rent increase letter in advance, typically 30 to 60 days, depending on state and local laws.
The Seattle Times covered this issue for the State of Washington in January 2014.
For example, in California’s month-to-month or week-to-week rental agreement, landlords must give at least 30 days if the rent increase is 10% or less and 60 days’ notice if the rent increase is 10% or more. You can learn more about rent increases from the California Department of Consumer Affairs.
Reasons for Increasing Rent
There are many reasons why a landlord may need to increase rent. For example, there may be an:
- Increase in property taxes
- Increase in the cost-of-living
- Increase in insurance premiums
- Increase in homeowner association (HOA) fees or condo fees
- Annual inflation (The World Bank publishes inflation rates in the U.S.)
When can you NOT increase the rent?
There are several situations when a landlord can not increase rent:
- Lease has not expired and the contract does not allow an increase
- Landlord did not correctly give advanced notice according to state and local laws
- Landlord violated local laws on rent control or rent stabilization
- Retaliating against tenant for asking for repairs or reporting a housing code violation
- Discriminating against tenant’s race, religion, or sexual orientation
- Landlord increased rent in bad faith to try to force the tenant to move out
Many states assume retaliation if the landlord increases rent or sends an eviction notice 60-180 days after a tenant files an official complaint.
In California, for example, the Department of Consumer Affairs explains retaliatory rent increases. It is also illegal to raise the rent because a tenant reported a housing code violation.
The court may be more likely to find a landlord guilty of unlawful retaliation if the increased rent is higher than the market rate. Rentometer and Zillow provide helpful resources on comparable rental rates in your neighborhood.
Consequences of Not Using a Rent Increase Notice
Landlords prevent confusion by putting a rent increase in writing.
If you do not send a proper notice of rent increase letter in advance, the following preventable consequences may occur:
|1. Lost opportunity cost for||1. Lost opportunity cost for|
|Increased rental income||Finding a more affordable rental place|
|A new rental agreement||2. Expensive lawyer fees to|
|2. Expensive lawyer fees to||Initiate a lawsuit for retaliation or discrimination|
|Dispute an alleged retaliatory action or discrimination||3. Mental anguish|
|3. Mental anguish||Confusion about verbal agreement to not raise rent|
|Confusion about verbal agreement to raise rent|
How to Send a Rent Increase Notice
The lease agreement may describe how landlords should send letters and notices.
The free residential lease agreement sample, for example, says that notices must be in writing and should be either:
- delivered in person
- sent by overnight courier service
- sent via certified or registered mail
If the landlord has been in touch with the tenant by email, another option is to electronically send the letter and send a hard copy for good measure.
Sending a text message is generally not a good way to create a reliable paper trail. Read more about the pros and cons of text messaging between landlords and tenants on Zillow.
Notice of Rent Increase Sample
Below you can find what a notice of rent increase typically looks like:
Notice of Rent Increase
How to Write a Notice of Rent Increase
Before you fill in the details of your notice of rent increase, make sure the top of the form contains the state you are contracting in.
Step 1 – Date the Document
1. Date of Notice. Provide the date of this notice of rent increase.
Step 2 – Enter Tenant Contact Information
2. Tenant Name. Write the full name of all tenants (the persons leasing or renting the property).
3. Tenant Address. Provide the street address of the property the tenant is leasing or renting.
Step 3 – Fill in Rent Details
4. Name of Original Lease Agreement. Enter the name or title of the original lease or rental agreement between the landlord and tenant.
5. Date of Original Lease Agreement. Write the date of the original lease or rental agreement.
6. Current Rent. Provide the current monthly rent amount.
7. New Rent Amount. Write the new increased monthly rent.
8. Date of Rent Increase. Enter the date the landlord will increase the rent.
9. New Rent Due Date. Fill in the day the new rent is due each month.
Step 4 – Ask for Tenant Acknowledgement
10. Tenant Signs and Returns Letter. You can choose whether or not to include a tenant acknowledgment where the tenant signs a statement acknowledging and agreeing to the rent increase.
Step 5 – Provide Landlord’s Contact Information
11. Landlord Name. Enter the landlord’s full name.
12. Landlord Address. Write the landlord’s mailing address.
13. Landlord Phone Number. Fill in the landlord’s phone number.
14. Landlord Email. Provide the landlord’s email address.