What is a Rent Increase Notice?

November 4th, 2020
What is a Rent Increase Notice?

As a landlord or property manager, you’ll sometimes need to increase the amount of rent that your tenants are charged. They won’t be happy about facing a rent increase, of course, but by handling these changes professionally and courteously, the experience of notifying a renter does not have to be uncomfortable.

The following explains what a rent increase notice is, along with how to write one:

What Is a Rent Increase Notice?

A rent increase letter is one provided by the landlord or property manager to notify a renter of the new rent. This notice should include the following information:

  • Date of letter
  • Name of tenant
  • Name of landlord
  • Current rental rate
  • New rental rates
  • Date by which the tenant needs to sign a new lease or arrange to vacate the premises
  • Date the increase will take effect

A rent increase notice should be delivered directly to the tenant or sent via certified mail with a receipt requested. This ensures that you'll have proof the tenant received the notice on a particular date. The tenant should typically have at least 30 days to accept the change or reject it and move out.

Ways To Ensure a Positive Reception?

You can use several tips to ensure that a rent increase letter is positively received. Begin by making it personal. Use the tenant’s name in the greeting rather than just an impersonal “dear tenant.” In addition, conclude the notice with a friendly closing.

In the body of the notice, refer to the rent increase as a “change” rather than an “increase.” Thank them for being your tenant and encourage them to contact you with any questions or concerns. Include a name and phone number or email address for their convenience if they'd like to contact you.

And if there’s a specific reason for the rent increase – such as increased property taxes or improvements made to the property, like a new paint job or newly added amenities – include it in the notice. This will help tenants understand why the increase is necessary and prevent them from viewing it as simply greed on your part.

When Can Rent Be Raised?

You can’t raise a tenant’s rent in the middle of a lease. Instead, you’ll need to wait until the current lease expires. So if your tenant signed a one-year lease, you’ll need to wait until after the year is over to raise their rent. If your tenant signed a month-to-month lease, you’ll need to wait until the end of the month to raise the rent. However, although the rent can't be increased until a new lease is signed, tenants will also need adequate notice (often 30 days) before their leases expire and new rates would kick in.

How Much Can Rent Be Raised By?

Generally there are no limits on how much rent can be raised by. If the property is rent controlled, however, you’ll need to understand your local laws governing this type of arrangement. You’ll be limited in how much you can increase the rent on a rent-controlled property.

Although you can usually raise the rent by as much as you’d like, be aware that a large increase can cause you to lose tenants. This may result in lost rental income as you lose good, reliable tenants and cause a unit to sit vacant. It’s best to keep rental increases reasonable and balance your monetary requirements with your need to keep tenants.

A rent increase notice is never welcomed by tenants, but a letter that’s professional yet friendly, transparent and polite will be better received than one that’s strictly by the book. The process of notifying a renter requires that you produce a notice that has all required information so that it satisfies local legal standards and your tenants have a clear understanding of their deadlines and responsibilities.