Rent Rules & Related Legal Concerns for Landlords
One of the main priorities of most property owners who rent to tenants is to ensure that they are receiving the desired amount of rent, and that the rent is paid in a timely and consistent manner. If you are renting a property out for the first time, you may have questions about what is an appropriate amount of rent to charge, when and how you should collect it, and what to do if a tenant does not pay in accordance with the terms of your rental agreement or lease. There are several general principles that apply to these topics in most states, as well as specific laws related to rent control that you must be aware of in some locations.
How Much Rent to Charge
In most places, unless you are subject to rent control laws, the amount of rent you can ask for your rental unit will be determined largely by the local rental market. While there is not necessarily a limit on what you can charge, it is wise to do some research into what is being charged for comparable units in your area, and to try to set your monthly rent amount in accordance with those trends. When you decide on an amount, it should be clearly communicated to prospective tenants and articulated in your lease or rental agreement.
Rent Control
In California, New York, New Jersey, Maryland, and the District of Columbia, several cities and counties have rent control laws. These laws are intended primarily to limit the amount of rent a landlord can charge existing and new tenants in rent controlled units, and usually require “just cause” before a landlord can end a tenancy. Rent control laws do not apply to all properties, with common exceptions including new buildings and single family homes. Rent control ordinances are generally implemented by the local rent control board, which is the governing body that will often need to approve increases in rent if your property is subject to rent control. In many areas, landlords can face significant civil and even criminal penalties for violating rent control laws.
Collecting Rent
Your lease or rental agreement should clearly state the date upon which rent is due each month. In most cases this will be the first day of the month, though there is generally no reason why both parties cannot agree to a different date. The agreement should also establish whether tenants should mail or physically deliver the rent to you, and whether they can pay by check, credit card, or cash. It is also important to state whether there is any grace period for late rental payments, as well as the amount of any late charges. It is generally not a good idea to charge excessive amounts in this context, and some states have laws limiting the amount you can charge for late rental payments. Similarly, the majority of states set a limit on how much you can charge for a returned check.
Changing the Rent
Unless your property is subject to rent control laws, if you have a month-to-month rental agreement, you will generally need to provide 30 days’ notice before you can change the amount of rent you are charging, or other rules such as where or how rent is to be paid, though some states require more notice. If your property is subject to a lease, you have to wait until the end of the lease to make changes of this nature. If you are not subject to rent control laws, there is no limit on how much you can increase the rent, though again it is advisable to price your rental in accordance with similar units in your local housing market.
Retaliatory Rent Increases
It is illegal to raise a tenant’s rent in response to a housing discrimination complaint, legitimate complaints about the condition of the rental unit, or a tenant exercising their right to assembly. If you have a well thought-out rent increase policy in place, such as one that calls for a certain percentage increase each year and applies to all tenants, you will be in a better position to defend against claims that increases in rent were retaliatory.
