Rules about raising market rent on long term tenant Providence RI
Scenario: Tenants who have been living in a unit for 10 years and paying $1K and the identical unit is renting for $1800. The tenants are month to month with no lease. Wondering the best approach to raise them to market rents. Looking for specific advise for this location. After initial RI Tenant Laws review, didn't see anything called out either way. Would like advice on how others successfully managed a similar situation.
@Tina Rubin I don't know of any prohibition against raising the rent to whatever amount you want, as long as you give proper notice - at least 30 days, or 60 if any of the tenants are above 62. You also want to make sure the tenants didn't recently report you for code violations, as they could claim in an eviction hearing that the rent increase was retaliatory.
Whether you want to raise them to market all at once or try to increase it over time is up to you. But usually, when someone has gotten used to that amount of rent, they've based everything else in their life around it so it's going to be tough to ramp them up to market.
If you give them more advanced notice to try to let them find another place that's cheaper than your new market rent, be prepared to hear a lot of complaining about how expensive everything is and how they can't find anything, just need more time, etc.
It's not a great situation, if it were me I would just bite the bullet and raise it to market rent, maybe giving them 60 or 90 days notice if you really want to be nice. Chances are they will move out though - the question is how difficult it will be for them (and you) on their way out.
It's a tough situation because like I said, most times these folks have gotten used to their very-below-market rent and will have a very tough time adjusting. On the other hand, you probably paid a lot for the property assuming rents would be able to be brought to market, so you'll need to raise it to market just to make your #s work.
If you think they will be able to afford the new market rent, you can try to make the pill easier to swallow by improving their unit and addressing any reasonable requests they have about the property. People who can pay more, often don't mind paying more if they feel they're getting something for it.
@Anthony Thompson - Thank you! We are leaning towards the "just bite the bullet and raise it to market rent" allowing for 3-4 months notice as opposed to trying to break the amount up in increments. We also considered the renovation route but in this example, the unit is already in great condition and no need of updating. You are correct that we need to raise the rents to make the #'s work and knew this would be a tough part of the process.
§ 34-18-16.1. Rent increases — Notice requirements.
(a) Prior to an increase in rent being imposed by a landlord for a residential tenancy, notice of the increase shall be given in writing to any tenant by a landlord at least thirty (30) days prior to the effective date of the increase.
(b) A landlord must give sixty (60) days notice to month to month tenants over the age of sixty-two (62), before raising the rent.
Personally, I would give your tenant notice on termination. Clean the place up and rent it at market rate. It would be very hard for your tenant to afford almost doubling their rent, so you're just asking for trouble by trying to keep them there. I would give them notice they have 60 days to be out so they have time to find something. If they insisted on staying, I would require them to show verifiable proof that they can afford $1,800 and I would increase the security deposit to match.
