Rent increase with no lease tenants

19 Replies

Hi, I did renovations and increased rent. I have no lease with tenants. I gave them  2 weeks notice for increased rent. Is it ok in NJ? They asked to wait for 45 days which I want to avoid. Any advices?

In most states if you don't have a lease, by default it falls to a month-to-month lease. Essentially anyone can effect changes with a 30 day notice, a two-way street. So if you want to increase the rent, you can give them a 30 day notice and be fine with it. My honest advice is to put them on an actual lease which spells out your intentions, fees, due dates, late charges, pets, smoking, etc. This particular Tenant may not want to sign a lease since the have been there without one but you can either present them with one, if they refuse terminate their next month's Tenancy or you can wait them out. 

you are incorrect when you say you have no lease. acceptance of rent constitutes a legally binding, ORAL, month to month lease. you cannot give 2 weeks notice. you must gove 30 days notice, and one full rental month. that means to raise rent on april 1, you must give notice before feb 28. this is so they have one full months notice. if your state laws said 60 days, it would be two full months. download your local tenant laws before you get yourself in trouble

You are responsible to know all your state landlord tenant regulations. It is necessary to operate your business within the law and not end up being taken to court by your tenant. Learn the laws and follow them to the letter.

As Andrew states you do have a lease with your tenant. It would be wise to get yourself a fully inclusive lease and have him sign it. I would strongly recommend you use a M2M lease so as to remain in control of your property. A term lease places your tenant in control until the lease ends.

Ok. Great. Thank you everyone for advices. I appreciate it. 

You must have your Tenants on a Lease.  It is very risky to not have them on a lease.

It's a new building and I am working on new leases. Thank you for all comments. I am new to Real Estate and still learning.

Judy P. please explain why it's risky not to have them on a lease? If a person/tenant wants to leave a lease nor a leash will hold them.

@Thomas S. Why would it be giving the tenant control doing a yearly lease? The lease still operates by your terms. Rent should only be raised on an annual basis anyway. I always lease on an annual basis, but there are always exceptions.

Originally posted by @Val Jaz :

Judy P. please explain why it's risky not to have them on a lease? If a person/tenant wants to leave a lease nor a leash will hold them.

 its risky because if you have no written lease, the tenants only obligations are to abide by state laws. a written lease outlines what can and cannot be done in your property and reduces liability. it is likely you are confusing the term written lease with term lease. a written lease can be month to month or term.

@Account Closed      A term lease will require that the landlord evict in the event a new tenant (total stranger) does not work out as a tenant or worse will be forced to tolerate inappropriate tenant behaviour as opposed to simply giving notice of non renewal when on a M2M lease. M2M allows landlords to terminate or use leverage to educate tenants on proper behaviour where as with a term lease landlords are usually forced to live with bad tennats for a year.

Is that a problem.....try living with a intollerable tennat and see how stressful it can be.

Good tennats have no problems being on M2M leases where as a tenant that knows they are less than ideal will avoide a M2M like the plague. This makes for another good screening tool.

Getting rid of a bad tenant is far more important than worrying about a good tenant moving out (they will do that regardless of a lease).

2 weeks is not enough time in most states.  The minimum is usually 30 days.  In some days it is 60 days for M2M leases.

Also, having a M2M Tenant does NOT only bind them to state laws as previously suggested by other posters.  The Tenant had to sign some type of lease at the beginning of their term.  This was the lease.  A month 2 month tenancy just EXTENDS the terms of the original lease.  So, the lease itself (and all of it's rules and policies) are still in affect.  The only thing that changes in a month to month lease term is the short nature of the renewals.  It gives either party the opportunity to end the lease every 30 days (or 60, if your area requires that), or to raise rents, and so forth.

A Tenant desires to have a secured lease term to ensure that their rental rate will remain the same for 12 months.  A Tenant unsure of where he will be in 3 months wants a month to month to allow for flexibility for moving if needed, but the trade off is the risk that the rental rate may be raised at any time during his tenancy, with proper notice.

For a landlord, the same is true in there being benefits to both options.  For a 12 month lease, the landlord secures a Tenant for 12 months, which is nice to know that you don't have to keep trying to rent it out.  For M2M lease terms, the landlord has the ability to charge more for shorter term leases and/or raise the rental rate with proper notice.  

So, it really just depends on what is more important to you as a landlord....having secure tenants in place, or raising rents every month?  THere is no wrong answer, it just depends on what your business model is.

Again to get back to the original question, I don't think 2 weeks is going to fly.  You have to give them enough notice that if they decided to move out, they can.  If it is required that they give you 30 days notice to move, but you only give them 2 weeks notice of a raised rental rate, that isn't fair.

I nderstans in CA is 60 days notice to increase rent if the tenant has been in the property a year or longer, less than a year is 30 day notice.

@Thomas S. - I disagree that good tenants will not have a problem with a month to month lease. I would never rent a place with a month to month lease unless I had no other choice.

Originally posted by @Cara Lonsdale :

Also, having a M2M Tenant does NOT only bind them to state laws as previously suggested by other posters.  The Tenant had to sign some type of lease at the beginning of their term.  This was the lease.  A month 2 month tenancy just EXTENDS the terms of the original lease.  So, the lease itself (and all of it's rules and policies) are still in affect.  The only thing that changes in a month to month lease term is the short nature of the renewals.  It gives either party the opportunity to end the lease every 30 days (or 60, if your area requires that), or to raise rents, and so forth.

 I agree with everything you said accept the above. Being month to month does not imply a written lease has expired, nor does it imply that there is no written lease whatsoever. Both situations are different. If there was a term lease, that has expired then in every state I know of, it defaults to a month to month agreement. In this case, the terms of the original lease are upheld. In this case, the OP has stated there is no written lease, which means there is an oral lease agreement in place. In this case, state law (and local case law) is the only binding rules the tenant has to follow.

@Eric M.

"I would never rent a place with a month to month lease unless I had no other choice."

And that is because as a tenant you want to be in control of the property for a extended term. In regards to term leases most state regulations see term leases automatically become M2M at the end of term. It boils down to who is in control and how much trust you want to place in a total stranger. My preference is to never trust and once a good relationship has been built neither side cares that it is M2M.   

All regulations I am aware of require 12 months between rent increases regardless of the fact that the tenant may be on M2M. A M2M should be written to automatically renew unless one party has given proper legal notice to terminate.

@Thomas S. "And that is because as a tenant you want to be in control of the property for a extended term."

Yes. I absolutely hate moving. I would never go through all of that work knowing that they could legitimately kick me out 30 or 60 days later and I would have to start all over. Or they could raise the rent every month and I would be held hostage to my loathing of moving. I would never know if they were planning on selling or moving back in and that is why I would only move somewhere with a year term.

It seemed to me that you were saying "Good tenants have no problems being on M2M leases" That is clearly not true.


I'm not saying you are wrong to only use M2M leases, I am just pointing out that you are limiting your potential renters.

Originally posted by @Andrew Boettcher :
Originally posted by @Cara Lonsdale:

Also, having a M2M Tenant does NOT only bind them to state laws as previously suggested by other posters.  The Tenant had to sign some type of lease at the beginning of their term.  This was the lease.  A month 2 month tenancy just EXTENDS the terms of the original lease.  So, the lease itself (and all of it's rules and policies) are still in affect.  The only thing that changes in a month to month lease term is the short nature of the renewals.  It gives either party the opportunity to end the lease every 30 days (or 60, if your area requires that), or to raise rents, and so forth.

 I agree with everything you said accept the above. Being month to month does not imply a written lease has expired, nor does it imply that there is no written lease whatsoever. Both situations are different. If there was a term lease, that has expired then in every state I know of, it defaults to a month to month agreement. In this case, the terms of the original lease are upheld. In this case, the OP has stated there is no written lease, which means there is an oral lease agreement in place. In this case, state law (and local case law) is the only binding rules the tenant has to follow.

 You are TOTALLY correct.  My assumption was based on the existance of SOME type of lease in the past that has just been automatically renewed to month to month.  Do people still offer tenancy based on oral agreement???  Ug scary.

Thank you for reminding me to clarify.

@Eric M. I understand your concerns however that are not based on reality.

1) landlords never want to get rid of good tenant's.

2) Rents generally may only be raised annually. If you want to hold a good tenant you do not raise rent above market.

3) Selling is done regardless of lease term.

Your concerns are not based on reality only on assumption and although I have a waiting list for tenants limiting potential renters has never been an issue since I do not tell them up front I only offer M2M and when I do I have never had a applicant balk at the idea. 

Correction I have had a few walk away but in every case I had already determined that I was rejecting their application. I had informed of them I only offer M2M as part of my screening test and they disappeared into the wind.    

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