How Much Can an Apartment Raise Rent?

As the cost of living rises in an area, landlords will often raise the price of rent to accommodate the increased property taxes, utilities, and market rates.

However, the cost increase may exceed your budget and force you to move.

If you fret the amount that a landlord can raise the rent, look no further.

We will discuss the limitations and regulations surrounding apartment cost increases to keep you informed.

How Much Can a Landlord Raise Rent Prices Legally?

In most cases, an apartment can increase their rent as much as they want. Most areas do not have laws protecting tenants from raised prices.

However, some cities require landlords to aid in their tenant’s relocation if they raise the rent beyond a set amount. 

On average, rent increases were around 2% in the United States in 2019. This value equates to approximately $196. About 78% of renters had an increase that year as well.

While landlords can technically quadruple their rent each year, you are unlikely to encounter that.

They need to compete with other apartments in their area and be accessible to tenants.

As a tenant, you should expect a rent increase each time you renew your lease. The primary exception is living in a rent-stabilized apartment.

Rent-stabilized apartments have government laws that prevent drastic increases. In some cases, the rent can never change for the place.

Also read: Do Apartments Raise Rent Every Year?

Why Do Landlords Raise Rent?

Landlords raise the rent for a few reasons. These price increases include:

  • Maintenance
  • Improvements
  • Cost of living
  • Taxes
  • Gentrification
  • Insurance premiums
  • Association fees

Many apartments, especially older ones, require upkeep to stay comfortable and inhabitable.

If you need more repairs, the landlord will increase the rent to maintain the infrastructure.

Other improvements, such as adding security systems, air conditioners, and new appliances, may result in a rent increase. 

The apartment has a higher value, and the landlord needs to compensate for the money they put into the place.

Cost of living increases are usually small, but they do factor into your annual lease.

Many landlords build these into the lease agreement, so you should expect them at most places.

When your area raises its property and income tax, your landlord may find that they make a lot less money and need to increase the rent to make back the losses.

Gentrification can bring new restaurants, stores, and parks at a high price. Rental prices increase as the area seems more desirable since people are more likely to pay the steep costs.

The cost of utilities, insurance premiums, and homeowners associations may increase yearly as well.

Your landlord will factor these into the annual rent raises.

How Often Can an Apartment Raise Rent?

Your landlord can raise your rent when your lease term expires. 

If you rent monthly, they can increase the prices on the first of the month. These increases may not seem as drastic, but they can add up by the end of the year.

Annual contracts may show more drastic increases. It’s often a better idea to sign a long-term lease to avoid having to pay for rent increases too often.

There are specific times when your landlord can increase rent before your lease ends. You can work with them to renegotiate your lease agreement, for instance.

In most cases, rent increases can only happen once a year if the tenant is in the Housing Choice Voucher Program (Section 8).

The United States Department of Housing and Urban Development (HUD) sets a Fair Market Ren standard annually, which tells landlords if they can make a rent increase.

The local Section 8 public housing authority needs to approve the rent increase notice before it gets shown to the tenant. 

Landlords should consult lawyers before negotiating a rental raise on anyone in the Housing Choice Voucher Program.

What Does a Landlord Have to Do to Notify You?

Your landlord needs to give you notice of at least 30 days before increasing the prices. Some areas have different rules.

In California, you need 60 days’ notice if the raise is over 10%.

Thirty days notice is required for rooming houses and tenant-at-will agreements as well.

That way, you have plenty of time to find a new place if you cannot afford the increase.  

What Circumstances Are Illegal?

A landlord cannot retroactively increase rent. If they change the rent prices, they need to inform you and have you pay that cost from that day onward.

There is no backpedaling rent.

Also, they need to give you a 30 days’ notice before asking for more money. Anything less is illegal. Check your state’s laws to see if they need to require longer notice.

If your landlord tries to raise rent before your lease ends, you have no legal requirements to pay their request.

A punitive rent increase involves your landlord raising prices to punish you. These are grounds for a civil suit.

Other illegal instances of raising rent include:

  • Rent-stabilized properties
  • Lease agreements that forbid increases
  • Discrimination against you according to your religion, race, sex, color, nationality, disability, or familial status (Fair Housing Act)
  • Increases beyond the local law’s limits
  • Indirectly forcing the tenant to move out

In any of these circumstances, you should fight your landlord’s illegal actions.

Begin by sending a written letter to your landlord. Reference the specific legal statutes you believe they violated and detail their offenses.

Next, find records of your lease term and agreement, and hold onto any correspondences. 

Try not to make a verbal agreement if you ever end up in this situation, as you cannot prove it in court.

However, you should write down anything you agree upon just in case.

Treat your landlord with courtesy during these correspondences. If you have behaved well during your lease, they are more likely to listen to you and renegotiate.

Any rudeness on your part can make things challenging in your household and the courtroom.

Emphasize how much you love the apartment to show them that you want to discuss the matter.

If you do need to go to the courtroom, you will want proof of anything said.

There are laws in place to protect renters, but you do not want to risk them disputing your verbal claims.

As long as you have honest proof of everything said, you should win a civil lawsuit against your landlord.

What Happens When Rent Increases?

After you get your rent increase letter, read it thoroughly to ensure it is legal. Check out the local landlord-tenant laws and review your agreement.

Work with the other tenants to see their thoughts on the increase. If everyone bands together, you may be able to lower it.

Then, talk to your landlord about negotiating the price. They may be willing if you are a well-behaved tenant.

The increased rent may raise your security deposit. You could ask about keeping your deposit at the same amount.

If you have not caused damage to the property, your landlord would be more willing to keep the lower deposit. Otherwise, you will need to raise the amount to the new rent price.

How to Increase the Apartment’s Value

If you want to raise the rent on an apartment, you will need to increase its market value to keep it competitive.

According to the Zillow Group’s Consumer Housing Trends Report, some of the most desirable characteristics to potential renters include:

  • Air conditioning units
  • Fitness centers
  • Business centers
  • Pet areas
  • Game rooms
  • Movie theaters
  • Pools
  • Hot tubs
  • Car parks

Some more affordable ways to boost the value involve:

  • Cleaning any clutter out of shared spaces like hallways
  • Painting the walls and ceilings
  • Changing the door
  • Adding or replacing light fixtures

If you have a bit more to spend on improvements, try to update the appliances. Also, you can add architectural detail to give the room more character.

Replacing the windows or adding new ones makes the place look bigger. Getting soundproof doors and windows will benefit future tenants.

Try to keep the flooring smooth and fresh, replacing them as needed. Nobody wants to walk on cracked tiles.

You can take down some walls or split one bedroom into two. Finish up any unfinished rooms to attract more rental parties.

How to Raise the Rent

If you want to increase prices and maintain your current tenants, talk to them about your decision. Discuss the amount, why you need to raise the rent, and when you will do it.

Try to show them statistics about the local market prices. Most people understand that apartments want to remain competitive and profitable in their area.

Also, raise the prices gradually when possible. Instead of jumping up 10%, aim for a 2-3% increase each year until you reach the goal price.

While you need to provide at least 30 days’ notice, you might want to give a longer one to avoid any surprises on your tenants’ part.

Concluding Thoughts

Your apartment can increase rent by as much as it wants within the confines of the law. Landlords are unlikely to push the limits, but the possibility is there.

By brushing up on local laws, you can guarantee that everything happens legally. Then, you can decide if you want to stay or move to a new place.

As a landlord, you need to follow the law to avoid a lawsuit. Also, ensure you have a strong reason to increase the rent.

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