Real Estate

Rent and Rent Control

In just about any lease, some of the most important parts are the rent provisions. The payment of rent is critical to both the landlord and tenant: it's what the tenant has to pay for the right and privilege to use the property, and it's what the landlord charges to cover things like the costs of maintaining the property, paying taxes and hopefully make a profit.

In almost every lease, the parties agree on the amount of rent, and it's not uncommon for leases to set out if and when rent will increase (or decrease) and by how much. But, even when the parties agree on such things, some states and cities have "rent control" or "rent stabilization" laws that limit how often a landlord can raise rent and by how much.

It's important for every landlord and tenant to know some things about the rent provisions of a lease, and if you're in an area with rent control laws, it's even more critical. So, before you sign a lease, be certain to check the landlord-tenant laws in your area, or get some assistance from a real estate lawyer.

General Rent Provisions

In most states, the landlord-tenant laws control what has to be included in the rent provisions of a lease. The requirements vary from state to state, but generally the rent provisions need to include things such as:

  • The monthly amount of rent
  • The date on which rent is due
  • The manner or method of payment, such as by check (personal or business account?), cash, or money order
  • When a payment will be considered late, such as if there was a mail delay, including any "grace" periods and late fees

Also, many state laws provide that rent is due and payable without demand or notice at the time and place agreed upon by the parties. In other words, there's no need for the landlord to notify the tenant each month that rent is due.

Rent Control and Stabilization

Rent control began in certain states and cities after World Wars I and II as a result of increased rents in major U.S. cities, which was caused by the lack of housing. Many modern statutes are called "rent stabilization" laws, which are similar to but a little different from rent control laws.

Nonetheless, the both rent control and rent stabilization laws generally:

  • Limit how often a landlord can increase rent and by how much
  • Allow the government (usually a city) to force a landlord to decrease rent
  • Limit a landlord's ability to evict a tenant

Rent control and stabilization laws are not very common. In some states, there are laws that bar a city from enacting such laws. In some states, rent control laws can only be enacted by the state and not the cities. But, rent control is still in place in states with large concentrations of population, such as California, the District of Columbia and New York.

Also, not all rental properties are subject to rent control or stabilization even in areas where such laws exist. Usually, only buildings that were built before or after a specific date and/or house multiple tenants fall within the laws. So, for example, single family homes and condominiums are often not covered by rent control laws. And, under many of the laws, landlords have to register rent controlled housing with the appropriate government agency.

Rent increases are typically determined by some administrative body, such as a rent control board, as a percentage based upon the prior year's rent or based upon average housing costs in the area. Increases typically range from 4 to 8% per year. These are "automatic" increases that a landlord can make without permission from the government.

In addition, most laws allow a landlord to increase rent with government permission when, for example:

  • The landlord requests the increase because of a major repair or improvement to the premises
  • There are increased operating or maintenance costs

Rent decreases typically occur when: :

  • There's a decrease in demand for rental housing in the area or a decrease in maintenance costs, as determined by the government agency
  • If the landlord refuses or neglects to provide services and the tenant applies for rent reduction. "Services" include things like inadequate heat and/or hot water, unsanitary common areas like hallways and lobbies and insufficient security, such as broken or inoperable door and window locks

Evictions are impacted by rent control and stabilization laws in that they usually limit the reasons that justify an eviction by specifically listing appropriate reasons. In other landlord-tenant relations, evictions can occur for any reason listed in the lease or landlord-tenant laws. Rent control and stabilization laws typically allow evictions only when, for example, a tenant:

  • Fails to pay rent
  • Using the property for an illegal purpose
  • The premises will no longer be used for rental property
  • The building is condemned

The main difference between rent control and rent stabilization is that in rent stabilized property, the tenants have the right to have their leases renewed, often for a term of one or two years, at the tenant's option. The landlord is required to offer a renewal, and a tenant's failure to renew is a ground for eviction.

In some areas, like New York City, there are both rent control and rent stabilization laws. Which laws apply to which properties primarily depends upon when the building was built. So, be sure to check the laws in your area to make certain that your lease complies with all rent regulations.

Questions for Your Attorney

  • Are there any rent control or stabilization laws in our area?
  • The landlord of my rent-stabilized building didn't offer me a renewal, and when I asked him about, he said I would get one "soon." That was a month ago. What can I do?
  • If I have good grounds to evict a tenant from my rent-regulated building, can I increase the rent on the new tenant, or do I have to rent it at the same price?
  • Does more than one tenant have to complain to the government about the general unsanitary conditions of our rent-regulated building in order to get a rent reduction?
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