Limits on how much a landlord can charge a tenant apply only in certain areas of California, New York, New Jersey, Maryland, and Washington, D.C., which are some of the most densely populated areas in the country. Over half of the remaining states have laws that ban rent control ordinances, and many of the existing ordinances are being loosened in favor of landlords. However, some rent control ordinances still have strong protections for tenants, so it is worth understanding how they work if you live in an area governed by them.
These ordinances apply only to certain types of property. There are three main types of rental property that are typically not covered by rent control ordinances: new buildings, owner-occupied buildings with four or fewer units, and certain single-family houses and luxury units that are rented for more than a certain amount.
When it does apply, the term “rent control” can be an understatement. Rent control ordinances usually cover issues other than rent, such as the way in which a landlord can evict a tenant and notice requirements that need to be met.
Rent Control Protecting Current Tenants
Known as vacancy decontrol statutes, some types of rent control only protect current tenants from rent increases while they are living in a certain unit. Once they move out, either voluntarily or by eviction, the landlord can raise the rent by a certain percentage or as much as they want, depending on the applicable statute. In some situations, rent control boards do allow landlords to raise the rent of existing tenants by a certain percentage each year. This might be tied to the rent amount, or it might be based on a consumer price index.
If you live in a property with this type of rent control, you should be aware that the landlord may be able to petition to increase the rent if they improve the property or if they incur other costs, such as increased taxes. The rent control board will decide whether to grant the petition.
Rent Control Protecting New and Future Tenants
A stronger form of rent control, vacancy control statutes do not allow the landlord to raise the rent for a unit when a tenant moves out or is evicted. These statutes provide a base rent for each rental unit. The base rent is meant to account for issues such as housing supply and demand, the rent that was charged before rent control went into effect, and the costs incurred by the landlord in maintaining the property. Inflation or other external factors may permit the landlord to raise the base rent during a tenancy.
Notice Requirements in Rent Control Areas
If they want to raise the rent or terminate the tenancy, landlords in rent control areas need to comply with certain notice requirements. These are stricter than the usual requirements in these situations. When it comes to raising the rent, a landlord may need to tell the tenant that the increased rent can be reviewed by the rent control board to determine whether it complies with the ordinance. When it comes to terminating or refusing to renew a tenancy, the landlord usually needs to have “just cause.” (See below for what this may mean.) The landlord also may need to provide a longer termination or non-renewal period than landlords who are not under rent control.
Evictions in Rent Control Areas
Rent control ordinances, especially those that only protect current tenants, may create an incentive for landlords to frequently terminate tenancies. To address this problem, rent control ordinances also often provide that a landlord needs to have “just cause” to terminate the tenancy. This can consist of tenant misconduct, such as a major violation of the lease. For example, the tenant might have refused to pay rent or caused significant damage to the apartment, or they might be disturbing other tenants or committing crimes such as drug dealing on the premises.
Sometimes just cause also can consist of a reason related to the landlord. A landlord may be able to meet the just cause requirement by stating that they plan to move into the unit or give it to an immediate family member. This may warrant a closer look to make sure that the move actually happens and lasts for a reasonable amount of time. If not, you may be able to sue the landlord in small claims court to recover any costs that you incurred. The landlord also may be able to meet the requirement if they are planning to substantially remodel the property. However, in some areas, they may need to give the tenant a similar unit or give them priority in moving back into the unit after the remodeling.
Security Deposits and Rent Control
Some rent control ordinances provide extra requirements for how landlords must handle security deposits. They may need to put the security deposit in an interest-bearing bank account or handle it in another specific way. These rules vary from place to place, so you should look up the ordinance that covers your area to find out if it provides any requirements.