How Can a Landlord Increase Rent?
Massachusetts landlords need to act carefully when attempting to increase rent from tenants. With the exception of landlords who rent to tenants whose rent is subsidized by certain state and federal housing vouchers, there are no limitations on the amount of rent that a landlord may collect from a tenant. There is, however, a process that landlords must use to increase rent from existing tenants.
Tenants with a Lease
A lease is a formal agreement for the rental of property for a definitive period of time. Leases are legally binding agreements that obligate a landlord to rent the premises at the agreed-upon rent. As such, until the end of a lease, a landlord cannot demand an increase in rent.
A landlord, of course, can ask for an increase in rent after the lease, either through offering a tenants a new lease or a month-to-month tenancy. Landlords, however, need to be careful in these situations. If a tenant refuses to sign a new lease or agree to a month-to-month tenancy with the increase in rent, a landlord’s continued acceptance of rent after the end of the lease will create a month-to-month tenancy (known as a tenancy at will). The prior terms of the lease (including the monthly rent) will stay the same. Which brings us to the next topic . . .
Tenants At Will
For a tenancy at will, either party can end the tenancy by giving the other side a full rental period notice (which is most often thirty days). A landlord with tenants at will, therefore, can increase rent for these tenants by giving them proper notice of the rental increase.
There is a informal and formal way to do this. Informally, a landlord can simply ask the tenant to pay an increase in rent. If a tenant does, a new tenancy is created. If you go with this option, be sure to have the tenant sign a written agreement. While a tenancy at will can be oral, it is rarely ever a good idea.
If the tenant refuses a landlord’s offer to increase the rent, the prior month-to-month agreement (and prior rent) stays in place.
The formal way to increase rent is to end the month-to-month tenancy with a notice to quit, and offer a new month-to-month tenancy with the increased rent. This way, if the tenant refuses to accept the higher rent, the landlord has the option of evicting the tenant.
Although a landlord can ask for higher rent from tenants, doing so is not always the prudent choice. Good, reliable tenants are a huge advantage to a landlord. Keep this in mind when choosing whether to pursue a rental increase. Many landlords find that modest increases in rent each year avoids the hassle of asking for a significant increase in rent in a single year.
Landlords also need to be mindful of state law that prohibits retaliation against tenants. Landlords cannot increase rent to “punish” a tenant for raising a complaint about the conditions of the apartment or filing a grievance with the town or city’s inspectional services department. Doing so exposes a landlord to liability from a tenant.
If you need assistance with a landlord-tenant matter, contact me for a consultation.