Legal advice for new landlord
Hey everyone ! My names giovanni and looking for some advice on a situation i came across with a tenant. I purchased my duplex with a VA loan and plan on living in the back unit. I had inherited the tenant for the front unit. The tenant is currently paying 1043$ On a monthly lease and the last time the landlord increased was back in 2020. Currently the average rent for a 2/1 house ranges from 1500-2000$. I went to the tenant to give them a rental agreement for 1650$ as a 6 month lease and they were reluctant to even consider that new rent price, even stating that they thought it would just go up to 1200$. I said I'll try to work something out so that they can stay but at the same time I cannot afford to pay the mortgage if I bring down the rent even more. My question is how do I go about raising rents on a inherited tenant without getting into legal trouble in CA? I've read multiple things online such as I cannot raise more than 10% in a year but also read that if I am the landlord and also living on the property then I can be exempt for this. Do I make it stay as a month to month and increase the rent 100$ every month or start suggesting the tenant to look for another place so I can get somebody that will pay my asking price? Thank you for anyone who replies.
Quote from @Giovanni Guilin:
Hey everyone ! My names giovanni and looking for some advice on a situation i came across with a tenant. I purchased my duplex with a VA loan and plan on living in the back unit. I had inherited the tenant for the front unit. The tenant is currently paying 1043$ On a monthly lease and the last time the landlord increased was back in 2020. Currently the average rent for a 2/1 house ranges from 1500-2000$. I went to the tenant to give them a rental agreement for 1650$ as a 6 month lease and they were reluctant to even consider that new rent price, even stating that they thought it would just go up to 1200$. I said I'll try to work something out so that they can stay but at the same time I cannot afford to pay the mortgage if I bring down the rent even more. My question is how do I go about raising rents on a inherited tenant without getting into legal trouble in CA? I've read multiple things online such as I cannot raise more than 10% in a year but also read that if I am the landlord and also living on the property then I can be exempt for this. Do I make it stay as a month to month and increase the rent 100$ every month or start suggesting the tenant to look for another place so I can get somebody that will pay my asking price? Thank you for anyone who replies.
Why are you trying to make this work? Did you buy this property as an investment, or are you starting a charity?
$500 a month below market is $6,000 a year. Look at it this way: if you keep rents low, you are essentially subsidizing this individual so they can rent a place they otherwise wouldn't be able to afford.
Give the renter the appropriate notice of termination. Tell them you can't afford to subsidize their rent and need to rent this place at market rate. Get them out, find a renter willing to pay what it's worth, and move on.
@Giovanni Guilin I would agree with Nathan. You didn't place this tenant and I can never seem to trust a previous landlords quality of tenant screening. I would raise the rents to market value and if they choose to move out make it smooth for them and get a tenant you selected in there closer to market rent. I also wonder why the seller sold if they had an amazing tenant who never caused problems. Makes you think!
