When and How Landlords can Raise Rent in California
The cost of living in California has skyrocketed due to the record-high inflation we're currently facing. How much and when a landlord can increase the rent legally?
Even though landlords and tenants frequently ask about this topic, there isn't a simple solution that applies to everyone. We'll go over all you need to know in this article to help you determine the precise solution for you!
The Key Takeaway
The takeaway on the existing tenant protections is its still tough to evict tenants for non-payment of rent IF related to COVID-19. Tenants must notify their landlord within seven days after rent is due, unless extenuating circumstances exist.
In early October, the L.A. City Council voted to end the COVID protections in on January 31, 2023. Landlords will be able to resume increase rent on rent-controlled apartments in February 2024.
What's the deal with Eviction Protections?
Eviction protections for tenants unable to make rent was extended through February. These protections were set to expire multiple times in the last year.
The extension allows for extra time to distribute the $5.2 billion (previously $2.6 billion) allocated to rent relief funds.
Previously, tenants who paid at least 25% of their rent starting in September 2020 could qualify for relief to cover another 80% of their debts. Newsom extended the rent relief programs in January, announcing $2.6 billion in federal funds to help landlords and tenants pay down debts. This newest law bumps rent relief funds to the $5.2 billion to cover 100% of unpaid rent and streamline the application process for distributing the funds.
Landlords have to agree not to evict them, and they needed to prove pandemic-related hardship while meeting certain salary qualifications. If landlords didn’t want to participate, tenants could still receive some aid to cover up to 25% of their remaining rent.
The argument against rent increases rests on the belief that housing is an important social provision. Allowing landlords to increase rent can reduce access to affordable housing in the city. There is also an argument that landlords should not increase the rent during a crisis such as COVID-19 because they aggravate many people's challenges.
Landlords, on the other hand, argue that they should be allowed to increase the rent because they have invested in housing and should benefit from the rising demand for rental units. Increasing rent allows landlords to benefit from a rise in demand for housing. They have taken a risk in investing in housing and should be able to benefit from their investment.
Another argument in favor of rent increment is rising inflation. While other service providers and sellers can cushion themselves from the rising cost of living and inflation, landlords would be disadvantaged when they cannot increase their income through rent increases. This means that there is a strong case for factoring in inflation rates in the cost of the rent. There is also a need to ensure that landlords are insulated from the rise in the cost of living in the city.
How frequently may a landlord increase rent?
Landlords must wait until the term of any contract you've signed with them expires before raising your rent. If you have a lease, they can't raise it until the end of the lease period.
The timing and amount of a rent increase by a landlord can vary greatly. You need to know if you're a landlord considering raising the rent.
However, this is how you can increase rent:
Adhere to a pecking order
You must adhere to a pecking order to know when you can lawfully raise the rent on your property. It can be challenging to determine whether a rent increase is permitted and how significant that increase may be because it depends on several variables that differ from one property to the next.
To know when you can legally increase the rent on your property, you must follow a type of pecking order. Read the lease's conditions first. If there is ambiguity or you don't have a lease in place, state laws or municipal ordinances will prevail. Consult your state's regulations for details on other criteria, such as how much notice you need to give and how much you can raise the rent.
Check your lease
When trying to raise your rent, consult the lease as soon as possible. Does it state clearly that rate increases may take place mid-lease?
Rent increases are frequently more straightforward to implement with month-to-month tenants than full-year ones. Given that these leases are renewed every month, you would only need to wait until the next month to raise the rent as long as you supplied the appropriate notice required by your state.
A landlord's best and safest course of action is to sign a short-term or month-to-month lease with the tenant. You can raise rent prices in response to shifting economic conditions or even revoke the lease if you have a problematic tenant.
The laws of states differ.
State and local legislation come after checking the lease, which can significantly reduce your alternatives.
States frequently have different laws regarding:
How many times can you increase a tenant's rent during the length of a lease?
How to inform tenants of a coming rent rise? For example, either via a notice on the door, etc.
What is the increase in rent payment usually caps the addition to a percentage of the current rent
There are still restrictions associated with the pandemic in several states. Your possibilities for a rent increase may also be impacted by these and another state of emergency orders. For instance, in Los Angeles County, rent hikes on rent-controlled buildings are prohibited until December 31, 2022.
Lastly, you can consult a state law if you're unsure whether the rent increase you're proposing is legal or if you need assistance figuring out how much rent can be raised, how to notify tenants of the rise, or when to do it. They'll have advice that can assist you in choosing the best course of action for your property.
(n.d.). Wikipedia. Retrieved October 6, 2022, from https://www.wallacelaw.com/blog/summary-of-californias-statewide-rent-cap-law/
guide, s. (2022, May 13). 2022 Update: How Much Can a Landlord Legally Raise the Rent in California? Sage Real Estate. Retrieved October 6, 2022, from https://www.sageregroup.com/2022-update-how-much-can-a-landlord-legally-raise-the-rent-in-california/
Schneider, B., & Lee, C. (2022, October 3). Is California's rent cap law working? | News | sfexaminer.com. San Francisco Examiner. Retrieved October 6, 2022, from https://www.sfexaminer.com/news/is-california-s-rent-cap-law-working/article_db495384-410a-11ed-bc07-b7cd5caf7d51.html
Schneider, B., Lee, C., Gibson, K., Davenport, M., & Dubois, J. (2022, October 3). Is California's rent cap law working? | National News | kpvi.com. KPVI. Retrieved October 6, 2022, from https://www.kpvi.com/news/national_news/is-california-s-rent-cap-law-working/article_a78237c5-14a7-5efe-98c3-a2d2b22084c6.html