How to Send a Rent Increase Notice
No landlord looks forward to informing tenants of a rent increase. It can be one of the most difficult parts of the job, but there are ways to handle it responsibly while maintaining the goodwill of your tenants.
The first thing you’ll need to do is decide how much the increase has to be. Next, you’ll need to figure out how to communicate the change to tenants. How you go about it will depend on why the increase is happening.
Why Landlords Raise the Rent
A rent increase is a delicate matter. Sometimes it has to happen so you can keep your business afloat, but you can also lose tenants if they feel that your reasons aren’t good enough. The difference often lies in your ability to communicate why the rent increase is necessary.
To give you an idea of how this works, here are some common reasons why landlords need to raise rent.
Property improvements: You are typically permitted to raise rents if the property needs improvements to remain safe and livable. The amount of the increase should be based on the cost of the improvement. Sometimes this is even required by law, but more on that later.
Cost of living increases: If your expenses as a landlord have climbed high enough that the rent income no longer covers them, you’ll need to raise rents. Be careful, though, because you don’t want to come across as greedy. Don’t talk about how you “need to make a living” or focus on your business. Instead, remind tenants that you can only keep renting out properties if you can pay the expenses on them.
Property taxes: Sometimes property taxes increase, and you have to raise rents to keep up. Check the landlord/tenant laws in your state and city, because increases related to taxes can be regulated. Again, more on this later.
Legally, you can raise rents for any reason you choose, but these underlying factors tend to be more understandable to tenants. They’re more likely to balk at a change that seems to be driven by a landlord’s desire for financial gain, even if that’s not necessarily the case.
You don’t have to tell tenants why you’re raising the rent. You may choose to disclose as a gesture of goodwill, but the law only requires that you notify tenants of the increase.
Legal Requirements for Rent Increase Notifications
Your rent increase letter must fulfill two basic requirements. It must be:
Presented in writing
Sent sufficiently ahead of when the change takes effect
Most states require landlords to give tenants 30 days’ notice in the event of a rent increase. This covers tenants who pay rent monthly as well as those who pay weekly, as in the case of boarding houses.
However, there are certain state-specific and even city-specific exceptions to this rule.
Massachusetts Rent Increase Notice
Massachusetts is one state with such exceptions. In Massachusetts, the deadline for a rent increase letter depends on the duration of the rental period and the presence or absence of a lease.
Most rental periods—or, the amount of time that one rent payment covers—are typically either a month or a week, but Massachusetts law allows a rental period to be of any duration that the landlord chooses. That said, if there is any kind of formal rental agreement in place, the landlord is not allowed to change the rental period while the agreement is in effect.
If your tenant already has a rental period that is longer than 30 days but does not have a formal lease, you must give them notice equal to one full rental period before you increase their rent.
Massachusetts law states that if your tenant has a written lease agreement, you can only increase the rent during the lease if you have a tax escalator clause. This special provision allows landlords to raise rents in the middle of a lease term if taxes on the property increase. If this applies to you as a landlord, you may only increase the rent on the unit by the percentage of the increase that is allocated to that unit.
For example, if your property tax on a three-unit property increases by $1,800 per year, which works out to $150 per month, you can only increase each unit’s rent by $50 per month.
Without a tax escalator clause, or to raise the rent for any reason other than property tax increases, you can only implement an increase when the lease renews or extends. You must notify the tenant of this increase in writing before the new lease begins.
Some Massachusetts leases do include language that prohibits landlords from increasing the rent at the time of renewal. Before you send a rent increase letter, make sure that the lease in question doesn’t include this provision.
California Rent Increase Notice
Like Massachusetts, the state of California prohibits rent increases during the term of a lease unless you have a special provision to the contrary.
If a tenant at your California property has a rental period of one month or less, you have to give 30 days’ notice before raising the rent by 10 percent or less. Advance notice must be 60 days or more if the rent will be going up by more than 10 percent.
In most areas in California, there is no legal limit to the amount of a rent increase. The exceptions are rent-controlled buildings in cities such as Los Angeles and San Francisco.
In Los Angeles, for example, owners of rent-controlled buildings can only increase rent by 5 percent per year. If the landlord covers gas and/or electricity, an additional 1 percent increase is permissible for each service.
New York Rent Control Regulations
If you own a rent-stabilized property in New York, you probably know exactly how much you can raise the rent. The annual meeting of the city’s Rent Guidelines Board gets a lot of press coverage, primarily because its decision affects the finances of 2.4 million tenants and close to a million apartments—nearly half of the city’s rentals.
In 2019, the Board agreed that rent in these properties can go up by no more than 1.5 percent for one-year leases and 2.5 percent for two-year leases. This change got even more attention than usual because of landmark pro-tenant legislation that passed statewide in June. These new laws:
Prohibit landlords from de-regulating apartments when rents pass a certain level
Limit landlords’ ability to raise rents when they renovate buildings or units
Eliminate the "vacancy bonus," which allowed a landlord to increase rent by as much as 20 percent when a tenant moved out
Unsurprisingly, this legislation was intensely debated on both sides. Wherever you land on the topic, be aware that rent increases may be scrutinized particularly closely over the next few years.
Rent Control Regulations Elsewhere
Many other states across the country have cities where some buildings are rent-controlled. If you own a building or unit that is rent-controlled, city or state legislation may:
Limit how often or when you can increase rents
Allow you to de-control rent only once, when the unit is vacated
Allow for rent increases in certain cases, such as when you need to pay for improvements or renovations
The laws governing rent control are complex and vary from city to city. This list from Landlord.com will take you to the appropriate housing authority for the city in which your property is located. It will also tell you whether your state permits or prohibits rent control, a useful piece of information if you’re considering investing in properties in another state.
What to Include in a Letter to Raise Rent
Landlord rent increase notifications must have certain information to be considered valid and complete. Whatever other wording you choose, make sure that you clearly state:
The date of notification
The address of the property and the unit number
The new monthly rent
The total amount of the increase
The date the increase will take effect
A friendly rent increase letter should also include the reason why the rent is going up. You don’t need to share personal details (“My taxes went up and my son is going to college”) but it’s good business to explain your rationale. If possible, make the connection between the rent increase and your ability to provide high-quality service as a property owner.
Finally, always use the full legal name of the tenant in your letter to raise the rent.
Rent Increase Notice Samples
You have a lot to do as a landlord, probably more than your tenants know, and implementing a rent increase adds to that load. On top of the preparation and sending of the letter, you have to update your records, redo your budget, and probably have several telephone or in-person conversations with tenants who object to the change.
So that you don’t have to add “write a letter” to your to-do list, here are a few sample rent increase forms and letters that you can use as a template.
Standard Rent Increase Form
This form is designed for use in sending a rent increase letter to a month-to-month tenant. It also works to notify an annual lease tenant when you need to increase rent before the end of the lease term.
Note that unless there is specific language in the lease allowing for rent increases, or if your tenant explicitly agrees to an increase, the law requires that you wait until the lease ends. The next sample may serve as a more appropriate model in that case.
Tenant Address and Unit Number
Dear [Tenant’s Name],
This letter serves as your notice that beginning on [date], your monthly rent for Unit [#] at [property address] will increase by [increase amount] to [new monthly rent total] per month. This amount will be due on or before the [date] of each month going forward.
You are only obligated to accept the new rent total if you wish to continue your tenancy. Please indicate your choice below and return this form with your signature by [chosen date].
Thank you in advance for your understanding and attention to this matter.
I, [Tenant name], accept the new monthly rent of [new amount] and will be remaining in residency at [address], unit [#].
I, [Tenant name], do not accept the new monthly rent and will be vacating [address], unit [#] at the end of the rental period on [date].
Lease Renewal with Rent Increase Form
This form is ideal for situations in which you’re required to wait until the end of a lease to increase rent. You will notice that some of the wording in this notice is similar to the basic notice above. Where the information is the same but the wording is different, you may elect to use the previously offered language.
Tenant Address and Unit Number
Dear [Tenant’s Name],
This notice is to inform you that as of [date increase becomes active], the monthly rent for Unit [#] at [property address] will be [new monthly rent]. This is an increase of [increase amount] above the current rent of [current monthly rent amount]. This change is necessary for the ongoing upkeep of your unit.
Your current lease is scheduled to expire on [date]. This notice serves as your offer of a new lease with the new rent of [amount]. This change is reflected in your new lease agreement, along with any other necessary and reasonable changes.
Should you choose not to accept any of the new terms, including the new rent amount of [amount], you must vacate the unit on or before [date], when your current lease is scheduled to expire.
Please note that by choosing to remain in the unit after this date, you agree to the new rent amount and all other reasonable changes within the lease agreement. The rent will be due on the [date] of each month after the new lease takes effect.
Please sign and date the new lease agreement and return it at your earliest convenience, no later than [date]. Thank you for your prompt attention to this matter.
[Date of Notice]
Friendly Rent Increase Letter
Some property owners may find the rent increase notice sample above to be a bit too formal. For those landlords, here is a sample rent increase letter that is a bit more friendly and casual. This friendly rent increase letter includes all of the information above.
[Date of Notice]
[Rental unit address]
First of all, I want to take a moment to thank you for being such a responsible tenant. You pay on time, take good care of the place…what more could a property owner want? I value you very highly, and that’s why I’m sorry to notify you that I need to increase your rent, effective [date].
As I’m sure you’re aware, there are many expenses involved in owning a property. Many if not most of these expenses are directly related to keeping your unit in good repair.
I am committed to making sure that [address] is a place where you are proud to live. Increasing expenses mean that I can only do that by increasing your rent.
Your current lease officially ends on [date]. After that, the rent for [address and unit] will increase by [amount] to [new total monthly rent]. If you wish to continue in residence as tenants, I will need you to sign a new lease in which you agree to the new amount.
If you have any questions or would like to discuss a month-to-month agreement with the new rental amount in place, please feel free to give me a call at [phone number]. Otherwise, please sign the enclosed lease agreement and return it to me at [address] at your earliest convenience, no later than [date].
Thank you again for your time and responsibility as tenants. I do hope you will choose to remain at [address].
How to Send Your Rent Increase Notice
These templates should save you time in preparing your rent increase notice, but don’t spend all that saved time addressing and stamping envelopes instead. Mailform can handle those logistics and mail your letters for you. All you need to do is send us the addresses and the text of the message.
No matter how many tenants you have, Mailform has a service that will work for you. Our bulk mail service takes over the work of merging your address list with the notification letter so that a time-consuming task takes almost no time at all.
Our single recipient service is ideal for those with fewer tenants. It’s the same easy process on your end, just send us the information and let us take care of the rest. If you have questions, comments or suggestions, please email us at email@example.com!
There’s no need to make rent increases any more stressful than they have to be. With these templates and Mailform’s convenient services, you can get back to caring for your properties. Which, after all, is what being a landlord is all about.