I am brand new here on BP and fairly brand new to real estate. My father passed a few years ago and my my mother is aging and she has asked me to help her with a rental property she owns in New York City, Queens to be exact. One of my first tasks is to increase one of the tenants rent. In the past my mother would raise the rent verbally and in past years my parents never used leases. A few years ago I started drawing up leases for my mom and I was in charge of renewing leases and for the first time she has asked me to increase a tenants rent.
What is the proper procedure on increasing a tenants rent in New York City? I would appreciate any help.
Is the tenant rent regulated or free market? If the tenant is in a 2-3 or 4 family home, then the tenant is likely not rent regulated so you can increase the rent at lease renewal time as much as you want, just make sure the rent is in the lease renewal.
Thank you for the reply Amit. Do I just have to let the tenant know verbally prior to the lease renewal, should I send the lease renewal via certified mail 60 days prior to the prior lease renewal expiration date, or does it not matter?
I'm fairly certain there is no formal procedure. I generally just talk to them 60 days before the lease expires this gives them enough time to decide if they want to stay or move out. I would talk to them verbally then send them a new lease with the new rent.
Definitely read your landlord tenant laws for New York to make sure you are in compliance with them regarding rent increases. If your tenant is on a lease, you have to wait until renewal to increase rent, unless you think they will sign an amendment increasing it now. (Pro tip: No one is going to sign a rent increase early.)
If they are on month to month leases or informal, verbal leases, present them with notice in accordance to your state laws that says you will be increasing rent to $X on whatever date complies with the laws.
Note that a 30-day notice isn't 30 calendar days, it is 30 days including one entire rental period, so if you give notice before June 1, you can increase rent on July 1. If you give notice any time in June, you can't increase until August at the earliest. (I don't know NY laws, so check them to make sure you're giving 30 or 60 days notice properly.)
Thank you very much for the replies, much appreciated.
You must likely need to serve forms - available on NYC Housing Rent Board's website - detailing term of lease , percent increase, reason for increase etc.