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RENT INCREASES UNDER    CALIFORNIA LAW **

 Whether the landlord can raise the rent depends on whether there is a lease or a rental agreement, and what it says.

Some tenants have leases. If there is a lease, the rent cannot be increased during the term of the lease, unless the lease allows rent increases.

Many tenants have periodic rental agreements – for example, a month-to-month rental agreement. If there is a rental agreement, the landlord can increase your rent, unless the agreement does not allow rent increases. The landlord must give the tenant proper advance written notice of the rent increase. The written notice tells the tenant how much the increased rent is and when the increase takes effect.

How much advance notice must the landlord give the tenant?

If there is a month-to-month (or shorter) periodic rental agreement, the landlord must give you at least 30 days' advance written notice of a rent increase. The landlord must give the tenant at least 30 days' advance notice if the rent increase is 10 percent (or less) of the rent charged at any time during the 12 months before the rent increase takes effect.

The landlord must give the tenant at least 60 days' advance notice if the rent increase is greater than 10 percent of the rent charged at any time during the 12 months before the rent increase takes effect.

 The amount of notice required depends on the percentage of the rent increase. In order to calculate the percentage of the rent increase, we need to know the lowest rent that the landlord charged you during the preceding 12 months, and the total of the new increase and all other increases during that period.

EXAMPLES: 1. Assume that your rent is $500 per month due on the first of the month. Your tenant has been paying this rent for over a year. You want to increase the rent $50 to $550. How much advance notice must you give? First, calculate the percentage increase in the rent. It is:

  • 50

  • 500 = 10%

The current rent increase ($50) does not exceed 10 percent of the lowest rent charged in the past 12 months ($500). Therefore, you must give your tenant at least 30 days' advance written notice of the rent increase.

 2. Assume that the rent is $500 per month due on the first of each month. You have charged this rent for over a year. You wants to increase the rent $60 to $560. How much advanced notice must you give? First, calculate the percentage increase in the rent. It is:

  • 60

  • 500 = 12%

The current rent increase ($60) equals 12 percent of the lowest rent charged in the past 12 months ($500). Therefore, you must give your tenant at least 60 days' advance written notice of the rent increase.

3. On January 1, 2008, you started charging monthly rent of $475. In November 2008, the rent was increased $25 to $500. Effective January 1, 2009, you want to increase the rent another $50 to $550. How much notice is required?

The percentage increase in the rent must be calculated by adding all the rental increases made in the 12 months previous to January 1, 2009. Combined rent increase is:

  • $ 25

  • + 50 =

  •  $ 75

The percentage of increase is calculated using the lowest rent charged during the preceding 12 months. The lowest rent charged was $475. The percentage of increase equals:

  • 75  divided by

  • 475 = 15.7%

Since the increase is greater than 10%, you must give at least 60 days' notice.

 

How may you deliver a notice of rent increase?

Your notice of rent increase must be in writing. You may deliver a copy of the notice to your tenant personally. In this case, the rent increase takes effect in 30 or 60 days from the date the notice is delivered.

Alternately, you may mail the notice, with proper postage and addressed to your tenant at the rental unit. If you mail the notice, you must give an additional five days' notice. That means you would have to give 35 days' notice from the date of mailing if the rent increase is 10 percent or less. If it is more than 10 percent, 65 days' notice is required.

Timing of the Notice

Most notices of rent increase state that the increase will go into effect at the beginning of the rental period. For example, if you have a month-to-month rental agreement and you wishe to increase your rent by 10 percent effective on October 1, you must make sure that the notice of increase is delivered to your tenant personally by September 1. (If you mail the notice to your tenant, you must give you an additional 5 days' notice, so the notice must be mailed by you by August 27.)

You may make the increase effective at any time in the month if proper advance notice is given. If the rent increase becomes effective in the middle of a rental period, your tenant is entitled to receive the increased rent for only a prorated portion of the period. For example:

  •  Rental period -- Month-to-month, from the first to the last day of the month

  • Rent -- $500 per month

  • Rent increase -- $50 (from $500 to $550) per month (a 10 percent increase)

  • Date that the notice of rent increase is delivered to the tenant personally -- April 15

  • Earliest date that the rent increase can take effect -- May 15

  • Because you delivered the notice on April 15, the increase cannot become effective until May 15 or 30 days later. The rent payment for May would be calculated as follows:

  • First period: May 1 - May 14 -- During this period the old rental rate of $500 is in effect.

  • Second period: May 15 - May 31 -- During this period the new rental rate of $550 is in effect.

  • Number of days in first period -- 15 Number of days in second period -- 16

Prorated Rent Due for the Month of May

  • $ 500 x 15/31 = $ 241.94

  • + $ 550 x 16/31 = $ 283.87

  • $ 525.81

Can you require the tenant to pay the increased rent in cash? you normally cannot require the tenant to pay the rent (or the increased rent) in cash. However, you can require the tenant to pay the rent in cash if, within the last three months, the tenant has paid you with a check that was dishonored by the bank (A dishonored check is one that the bank returns without paying because the tenant stopped payment on it or because the tenant's account did not have enough money in it.)

 In order to require the tenant pay the rent in cash, you must first give the tenant a written notice stating that the tenant's check was dishonored and that the tenant must pay cash for the period of time stated by the landlord. This period cannot be more than three months after the tenant:

  • Ordered the bank to stop payment on the check, or

  • Attempted to pay with a check that the bank returned to the landlord because of insufficient funds in the tenant's account.

You must attach a copy of the dishonored check to the notice. You can personally deliver the notice to the tenant, or serve the notice on the tenant using "substitute" service.

The requirement that the tenant pay rent in cash may change the terms of the tenant's rental agreement. If so, you must give the tenant proper advance written notice of this change.

Additional Considerations

Normally in the case of a periodic rental agreement, the landlord can increase the rent as often as the landlord likes. However, the landlord must give proper advance written notice of the increase. The rent increase cannot discriminate against the Tenant or retaliate against him/her for exercising a right as a tenant.

Increases in rent for government-financed housing are usually restricted. If you’re renting a government-financed unit, check with your local public housing authority to find out whether there are any restrictions on rent increases. Local rent control ordinances may also limit rent increases, or impose additional requirements on landlords. If your rental unit is in an area with rent control, check with your local rent control board or your local elected representative to find out whether there are any restrictions on rent increases.

**California Department of Consumer Affairs