Legality of Raising Rent Across Multiple Units

6 Replies

I purchased a 14 unit apartment complex back in December. With it I inherited 13 tenants. 11 of the units are 2 bed 1 bath, same square floor plan and amenities. The tenants I inherited pay any where from $460 to $620 per month ($460, $475, $500, $515, $545...) . I told my property manager that we need to raise the rent on the ones below $500 up to $500, the ones below $550 up to $550, and the ones below $600 up to $600. I wanted to do it straight away on tenants that were month to month and upon renewal for leased tenants. My property manager responded back with, "we have to raise the rent equally on everyone". I don't know if they meant percentage or straight dollar amount, but either way, that didn't feel right. If some is paying market rent, it doesn't seem like I should be forced to raise their rent just to get people below market up to what the market dictates. They said it had to do with Fair Housing Laws. Is anyone aware of any law requiring this? I'm fairly new to this and haven't be through a price increase yet. This will be my first one. Does anyone have citations of any laws proving or disproving this statement. Its in Cincinnati OH if that helps.

@Michael Hooper

Are these tenants paying their own rent versus subsidized from some agency?  

I am not aware of anything that requires it to be done equally would need to research some more.  Are these units all the same or is there variation in size and features?

Paul

All of the tenants are paying their own rent. All of the 11 - 2 bed / 1 bath are the same size and features. There are 3 - 3 bed / 1 bath, but I left those out just to compare apples to apples.

Sounds like the PM is trying to avoid the tough conversations that come with raising rent and explaining to tenants (once they get to talking) why one's rent is different than another. By the PM's logic, you shouldn't be in this predicament because all the units would've been rented for the same amount?!

It is my understanding, you can raise rent on month-to-month tenants whenever you choose.  However, it would be common courtesy to give them a written X-day notice (I'd give 30 days, and if they wanted to give you their move out notice, then they'd have that option.)

Hey Micheal;

i have a 39 unit in Cincinnati. Although each unit is a 1/1, no two units are alike. Basement units rent for less than 1 and 2 story units. Rehab'd units rend for more than un-rehab'd units. Some units would take much more time/money to return to rentable condition should the current tenant move out, so when those rents get raised, they are raised less than units which I know would be quick to re-lease. Some tenants are not as pleasant to deal with. Those renters see bigger and more frequent increases as the property continues to stabilize and/or improve.  and on and on and on...

Your property manager is insane. 

DL 

@Michael Hooper At best they're concerned that some tenants might claim they're being discriminated against. With the rents being all over the place there might be some tenant-tenant talk, which would perhaps raise the question about why rents were different in the first place. There's no Fair Housing provision that'd prevent rents being raised or require them to be raised evenly. Their fear is simply that they'd get sued, which sounds unlikely even.

Going in to the property after a sale and management change and proceeding with a ton of rent raises would likely create a lot of vacancy. That's probably the real concern they have, but that's a different conversation to have than one about "Fair Housing".

Ask for more information. PMs should be forthcoming about what their expectations are for the property so I'd be concerned if they can't be honest about something like this. 

Peter MacKercher, Real Estate Agent in MO (#2010004223)
(314) 210-4414

It is common for there to be concessions during leasing and obviously rents get raised and lowered, so your rent roll will likely have a wide range of rents. And it's also common for you to not raise rents on renewals to full market if you're trying to maintain occupancy so you will have a varying rent rate even amongst renewals in the same month. It's crazy for your PMC to say that rents have to be the same .

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