4 Reasons for a Rent IncreaseJuly 28th, 2010 by Staff Writer
A rent increase can sometimes come as quite a surprise to you, especially if you haven’t received one in a while. However, many times it’s necessary if the landlord must make improvements, keep pace with the cost of living or make up the difference due to increased taxation.
Of course, sometimes the reason doesn’t have anything to do with operational costs but is the result of the landlord’s need to generate more income for himself and his family. Fortunately, a lease locks in the rental rate you’re currently paying for the lease term and, therefore, can’t be increased during that time.
If you don’t have a lease but rent month-to-month, your landlord is required to notify you of an increase in writing 10 days before the rent is due. If you make your lease payment on a weekly or semi-weekly basis, then your landlord must give you written notice 3 days before the due date.
#1 – Improvements
If you notice that your landlord is making improvements on the property where you live, and you only have, say, a month to go on your current lease, you may have to pay a higher rental rate when you sign the new lease. Landlords must often raise rents when they are forced to make improvements on a property. When rents are raised because of alterations, the increase is usually based on the actual cost of the upgrade. Also, improvements make the real estate a more valuable rental property. Typically, property improvements include installations, such as central air conditioning or security systems, or replacements of major appliances.
#2 – Cost of Living and Inflation
To stay competitive and to meet the rising demands of inflation, a landlord will increase the rent. If he wants to meet his rising costs he, in turn, must also produce more income from his rental units.
#3 – Taxation
Taxation can also play a role in what you’re charged for rent. If a landlord is forced to pay more on his property or income taxes, then he must also, in turn, increase the rents for his property.
#4 – Neighborhood Improvements
In many instances, when the real estate value starts to rise for the surrounding properties, a landlord will also make the adjustment by imposing a rental increase. Therefore, if you live in an up-and-coming neighborhood and don’t reside in a rent-controlled property, expect a rental increase for the privilege of living in such a location.
Unfortunately, in some cases, rents are increased because of the personal costs that a landlord incurs to support himself and his family. He may need to generate more income in order to meet certain family expenses. Nevertheless, according to the law, he is in his legal right to raise the rent on the units of a rental property at his discretion. Therefore, even if the reason for the rental increase has to do with his personal financial situation, it is still allowed. In addition, he doesn’t have to give a reason why he’s effected an increase.
Consequently, if you’ve recently had your rent raised and you don’t believe it’s for any of the aforementioned reasons, maybe there isn’t any reason at all. Maybe the landlord just wanted to give himself a raise.