Month to month lease and raising rent
Investor · Midwest · Member since 2013 · 253 posts · 34 votes
What are the requirements to raise rent on a month to month lease? Is it just 30 days notice or is there something more? Does it matter how much the increase is compared to the total rent? How does one take in to account market rent when a place has been rented for below market rent or not raised in multiple years?
Can a landlord in a month to month lease that started off paying water or other utilities later require tenant to start paying those utilities? How does this work and should the landlord be mindful of?
If a landlord notifies a tenant of increase in rent or starting to pay utilities previously paid by landlord and the tenant does not comply what remedy does the landlord have? Does a tenant have a reasonable expectation that anything will stay the same or change through the year in a month to month lease situation?
@Therese V. A lot of questions here. I'm cutting to the chase here. You need to familiarize yourself with your state's tenant / landlord laws. They vary from state to state. This would give you the knowledge and confidence in case you would ever have to go to court.
A lot of these questions depend on whats in your lease and your state laws. An eviction lawyer could help you with some types of general questions and help with a solid lease.
@Therese V. A lot of questions here. I'm cutting to the chase here. You need to familiarize yourself with your state's tenant / landlord laws. They vary from state to state. This would give you the knowledge and confidence in case you would ever have to go to court.
A lot of these questions depend on whats in your lease and your state laws. An eviction lawyer could help you with some types of general questions and help with a solid lease.
It is all in the state codes which as a landlord you are responsible to know.
A M2M lease is exactly the same as a term lease without a end point. It is automatically renewed exactly the same every month unless the landlord chooses to change something. Everything is done by official notice as outlined in your regulations.
@Kurt K. @Thomas S. thank you both for your responses. I don't have a specific situation in mind, just seeing what I can work on learning until the need arises. I'll take another look at the state's regulations.
How often do you guys raise rents? Do you wait until there is a specific difference like $50 or $100 in market value of the rental or just every year? A specific percentage or dollar amount?
Your posts should be more concise. not multiple.
Go on line look up landlord law for your state and find out the laws to get a good foundation. So keep in mind that is foremost, and responses are general in nature.
Month to month term leases renewal notice for any changes to lease, or lease term renewal due to rate change, needs to be give a full 30 days notice before the 1st of the month for any rent increases. I usually try and give at least 45 days,
YOU only give a notice if your making a change,, other wise the terms continue.
You can set the rent rate at whatever you think it needs to be at. they can choose to leave and give proper notice also. So that's why I give 45 day notice,, this gives them sufficient time to think and respond that they will be accepting the new terms so if they can give me proper notice back by 1 day before the 1st of the month if they are going to vacate, This should be in your renewal notice.
At that time if you have any other terms that will change regarding utilities then you let them know that as of same date utilities will be their responsibility and give them the proper information to make the switch for utilities.
Any lease terms have to be in writing and given with proper notice which for a month to month lease is 30 days prior to the 1st of the month. IN writing , I put a copy in the mail and I put a copy at their door.
The laws vary by state as well as city. For example the rules in Seattle are more restrictive than Washington State overall. When you're a landlord it's your responsibility to know and comply with the law.
Not legal advice, but:
Month-to-month is a 30 day term under the VRLA http://law.lis.virginia.gov/vacodepopularnames/vir...
Meaning everything has a 30 day cycle, including giving notice to terminate the lease, raise rents, etc. You would have to give them written notice before the 30 day period that you would be changing the terms, be it rents or service inclusions or removal. The tenant would then have time to decide to continue the lease or reject it by giving notice that they would not be renewing at the end of the period.
So if it's January 1st, and you tell them rents will increate on Feb 1st, you would be out of line because you did not give proper notice for the 30 day cycle. Instead you would have to tell them rents will go up on March 1st. However let's say it's Dec 20th, you could tell them rents will increase on Feb 1st and you would be within your right. This would go the same for all other items you asked about.
Keep in mind that Virginia is a landlord friendly state, it's very friendly to landlords here, tho some courts are less friendly than the next, and bend the laws to suit their personal views, but that's mainly in the larger cities like Richmond where you will see judges rule in an aggressively tenant friendly fashion by imposing rules, such as all notices have to have real ink signature on them, etc.
My only real advise is to not mess around with your tenants in a fashion where your raising rents every 30 days or something like that, or adding and removing services randomly because you do or don't want to deal with it. Judges do like to make examples of bad landlords that don't play nicely or fairly within the gray areas of the law. It's best to move forward in a 12 month cycle even if the tenants are month-to-month.
Good luck!
I raise all my rents annually, we are under rent control but if not I would raise them a minimum equal to the annual cost of living index. If the market went higher than the Cost of living or my expenses, for example taxes, went higher so would my rents.
Landlords that do not do it annually risk reducing the value of their property and losing tenants when they are forced to make a substantial rent increase to catch up. Always raise your rents every year even for the "good tenants". Tenants expect rent increases annually, so do your part as a good landlord and fulfill their expectations.
On a month to month situation, we raise the rental rate by 25%. Most tenants are GLAD to pay this because in our experience they only need one or two months extra to close on their home, find a new place, get through a life challenge, or finalize a new job. This is put in writing in our lease agreements from day one that the rent goes up 25% on a month to month scenario by default. Since this is standard across all of our lease agreements, we comply with any fair housing laws.
Ask yourselves a few questions for your market -
1) What is the tenants alternate cost? (Meaning - if they are FORCED to move out - how much will it cost them for interim housing)
2) What do apartments (real apartments - not the ma/pa 8 plex) charge when a tenant wants a 1-2 month extension?
In the end of all of this the Property Manager / Landlord controls the extensions. If they do not want to extend, put that to the tenant in writing with the required amount of time per your state. Texas is 30 days. With this being completed, you can do a lot of good with extensions. Another good point is pushing a November lease end to January or February. In our market, the low time is Thanksgiving. The last two weeks of November are always dead. From there - it's all uphill until late summer when it starts to slow down again.
By allowing for extensions, you could put a landlord (or yourself) back on to "Summer Cycle" as we call it here in San Antonio. Which, by the way, is from April to October. I know - a LOOOOOOONNNNNGGGGG summer!
Take care out there!
I see that a lot of people wrote about 30 days notice. Let me make a remark here. Yes, you have to give a 30 days notice if the rent increase is less than 10% of the rent charged at any time during the 12 months before the rent increase takes effect. But if that amount is greater than 10% it should be a 60 days notification.