Rent Increase Notice- owned property 4 months

[Matthew Keyes]

Closed on a property in march- 3-unit fully occupied.  They were all midway through their leases which were transferred over, new leases were not signed.  I just gave a tenant 60-day notice that I was raising rent as her lease ends 8/30/21.  She informed me that she has been there 3 years and needed to notify her 90-days prior.  I was aware of the 90-day period but was not aware she had been there for that length of time.  Do I have any options, it is not feasible to allow her to renew the old lease as it is $400/month under market.  I would be ok extending her lease an additional month if that is a legal option.  Thanks in advance!

Best,

Matt

[Suzanne Player]

You definitely want to have an attorney on your team to advise you on these matters & give you a lease drafted to protect you.  They'll take into account all the specifics of your situation.  Don't take your legal advice from your tenant but do NOT go it alone.

"You don't know what you don't know" - sometimes there are questions you wouldn't suspect to ask.  Common sense won't necessarily tell you to ask.  An experienced local attorney will know the specifics of your county & municipality in addition to the state law pertaining to residential rentals.  The forums are great, but I wouldn't ask for legal or accounting advice on a forum.  A lot of attorneys will give you a free consultation (ask before setting the appointment) so you can get to know them & decide if you want to work with them (& ask about fees).  

I wouldn't make a decision on this without counsel - not having counsel will probably cost you more than working with a good attorney. 

[Bill Brandt]

I ASSUME, and you will know when you talk to a lawyer, what proper notices are and what happens if the lease ends without any adjustments. Of course these are things you should have know before buying. I will add this si also why I often give people 90-120 notice. You could have given notice the week after you bought. There’s zero downside to you and only upside. The tenants probably know if they’re renewing. If they are great, now you know,they aren’t? Great, now you know. 

So that fixes future events, you learn notices and lease end options and you start giving 100-120 day notices so you’re covered. 

In this case you state may vary and your lawyer will let you know. In NV when a lease ends it becomes MTM if nothing new is signed. So I would let it become MTM and notify the tenant that October first their rent is going up $500, I might even go November first to make sure I give plenty of notice and I’ll be making it up with the increased rent anyway. I have no idea what happens in NY. Hopefully it doesn’t auto renew as another year. If so you learned a $4800 lesson about why you should study markets and their laws before buying and give notices earlier than legally required. 

[Theresa Harris]

Find out what the law says for your area.  See if there are caps on rent increases and what the notice period is.

[Matthew Keyes]

Quote from @Bill Brandt:

I ASSUME, and you will know when you talk to a lawyer, what proper notices are and what happens if the lease ends without any adjustments. Of course these are things you should have know before buying. I will add this si also why I often give people 90-120 notice. You could have given notice the week after you bought. There’s zero downside to you and only upside. The tenants probably know if they’re renewing. If they are great, now you know,they aren’t? Great, now you know. 

So that fixes future events, you learn notices and lease end options and you start giving 100-120 day notices so you’re covered. 

In this case you state may vary and your lawyer will let you know. In NV when a lease ends it becomes MTM if nothing new is signed. So I would let it become MTM and notify the tenant that October first their rent is going up $500, I might even go November first to make sure I give plenty of notice and I’ll be making it up with the increased rent anyway. I have no idea what happens in NY. Hopefully it doesn’t auto renew as another year. If so you learned a $4800 lesson about why you should study markets and their laws before buying and give notices earlier than legally required. 

I appreciate the candor and wealth of information.  I may not have been clear but I am familiar with what requires a 60 or 90 day notice,  I was not familiar with the length of her tenancy as her current lease is only a 1-year.  Going through our due diligence again it does not appear she has been there as long as she states either.  I did find my answer though and it looks like she will get an additional 30 days at her current rate.

I definitely do agree though, nobody should buy real estate until they know every single carve out of their State’s real property laws.

[Bill Brandt]

Sorry for the extra dose of “snarky”. 

Do you know or find out what happens when the lease expires with no addendums? Did it become MTM or another year?   my fear was that it would automatically lock in her rate for another year. 

[Matthew Keyes]

Haha that’s quite all right!  NYs reads “If the landlord fails to provide timely notice, the occupant's lawful
tenancy shall continue under the existing terms of the tenancy from the
date on which the landlord gave actual written notice until the notice
period has expired.”  They buried it quite deep though that the first several times I looked through I could not locate.

[Andrew Syrios]

You can't raise the rent in the middle of a lease unless the lease is a month-to-month or has some weird clause in there I've never seen. It really just comes down to what the lease says you can do. That being said, we're talking about one additional month. You can talk to a lawyer, but I'm not sure that's really worth a fight over.

[Chris Good]

If the lease says 90 days I'd just give her an additional month, you just want to make sure you gave her proper notice. I normally post a notice on the door and take a picture of it so its time stamped. I personally wouldn’t get an attorney involved for something like this..

[Nathan Gesner]

Quote from @Matthew Keyes:

Closed on a property in march- 3-unit fully occupied.  They were all midway through their leases which were transferred over, new leases were not signed.  I just gave a tenant 60-day notice that I was raising rent as her lease ends 8/30/21.  She informed me that she has been there 3 years and needed to notify her 90-days prior.  I was aware of the 90-day period but was not aware she had been there for that length of time.  Do I have any options, it is not feasible to allow her to renew the old lease as it is $400/month under market.  I would be ok extending her lease an additional month if that is a legal option.  Thanks in advance!

If the Tenant knows more than you, you're doing it wrong. You have got to educate yourself before they take advantage of your ignorance and really make life miserable.

Contact an attorney to learn what you can/cannot do. Consider joining a Landlord group, reading the law, studying government-created Landlord-Tenant guides, etc. You need to know this stuff inside and out.

$400 below market is costing you almost $5,000 per year. I would consider terminating the lease (if that's an option) and starting fresh with a new tenant that is willing to pay market rate for your rental and that doesn't feel they can walk all over you.

[Matthew Keyes]

Quote from @Nathan Gesner:

Quote from @Matthew Keyes:

Closed on a property in march- 3-unit fully occupied.  They were all midway through their leases which were transferred over, new leases were not signed.  I just gave a tenant 60-day notice that I was raising rent as her lease ends 8/30/21.  She informed me that she has been there 3 years and needed to notify her 90-days prior.  I was aware of the 90-day period but was not aware she had been there for that length of time.  Do I have any options, it is not feasible to allow her to renew the old lease as it is $400/month under market.  I would be ok extending her lease an additional month if that is a legal option.  Thanks in advance!

If the Tenant knows more than you, you're doing it wrong. You have got to educate yourself before they take advantage of your ignorance and really make life miserable.

Contact an attorney to learn what you can/cannot do. Consider joining a Landlord group, reading the law, studying government-created Landlord-Tenant guides, etc. You need to know this stuff inside and out.

$400 below market is costing you almost $5,000 per year. I would consider terminating the lease (if that's an option) and starting fresh with a new tenant that is willing to pay market rate for your rental and that doesn't feel they can walk all over you.

 I think you misunderstood, I know exactly what requires 90 day notice.  She informed me that she has been living there longer than any documentation I have states.  In fact I have documents stating she has not been there the length of time.  As I have never been accused of not giving ample notice, my question was around what legal requirement I have as I am not looking to litigate this matter.  I have found the additional context in our NY property laws that answers my question though and fortunately it looks like the misunderstanding will only cost me $400.

[Robert Wetter]

Sounds like a tricky situation, but I would agree with Suzanne and not take legal advice from someone who's rent you are trying to raise haha. I have some great real estate attorneys in the Capital Region that you would benefit from having on your team. PM me!

[Kar Sun]

Quote from @Matthew Keyes:

Closed on a property in march- 3-unit fully occupied.  They were all midway through their leases which were transferred over, new leases were not signed.  I just gave a tenant 60-day notice that I was raising rent as her lease ends 8/30/21.  She informed me that she has been there 3 years and needed to notify her 90-days prior.  I was aware of the 90-day period but was not aware she had been there for that length of time.  Do I have any options, it is not feasible to allow her to renew the old lease as it is $400/month under market.  I would be ok extending her lease an additional month if that is a legal option.  Thanks in advance!

Best,

Matt

 If they are in the middle of their leases then what are the terms of giving the notices are on their current leases?

Is it 60 days or 90?

You can turn them into month to month on a renewal.

Then get the rent you want and ask them if they want to sign up for another year.

Follow your state laws on notices.

I do not recommend an attorney unless you want to pay 3-5K to someone for the info you can look up yourself.

[Suzanne Player]

Even when a tenant is right about the law, don't count on them to fill you in on the parts that will be favoring you rather than them.  They aren't under oath to tell you the whole truth.  

I am often shocked at how often people take their legal advice from the party that would be opposing them if there were litigation.