I have a question about adjusting the price for a rental property. If I have a rental listed at $650/month and have two people interested but now want to increase the rent to $700 to bring it up to market value, are there any legal issues with doing so if 2 potential tenants are interested in the property? Can I go back to them and say that I need to raise the rent on the price or do I need to honor that $650 price in order to avoid any legal recourse?
I did the same thing but never thought about the legal part. My thoughts are if you own the property and you did not sign a letter of excepting a set price. You can do what you want. If they protest it then except the application (with recording fees) and deny them for what ever reason. Then up the rent amount.
Jest for completeness, once you have a tenant, in Calif, you may only raise the rent a total of 10% in any one year.
Without a lease signed by both you and the tenant their potential tenancy is still in negotiation. The legal issue (not a lawyer, but as I understand it) would be with bait-and-switch advertising, so as long as you update all your advertising to reflect the new price and make sure the applicants are clear on the price change, I'd assume you're in the clear.
If you have already accepted applications and any associated fees from them and they decide they're not interested because of the price change you might consider refunding them their application fee. That might be more of a gesture of good faith, or you might be advised to refund the fee because the price changed after accepting fees (different pretense for them paying you) -- again, I'm not a lawyer. As always, if you're concerned you should ask a real estate lawyer in your area.
Best of luck!
Thanks everyone! That is good info. The potential tenant hasn't signed anything just yet nor will the be able to move in for a month or so, so we should be able to make the price adjustment. I appreciate everyone's advise!