Can landlords increase rent during a lease term?

Rent Increases During a Lease Term in California: What Landlords Need to Know

As a landlord in California, understanding the rules surrounding rent increases during an active lease term is essential to ensure compliance with state laws and maintain good tenant relations. California has specific regulations governing when and how rent adjustments can occur, designed to protect tenants from unexpected rent hikes while allowing landlords the ability to manage their properties effectively.

Can Landlords Increase Rent During a Lease Term?

In general, landlords in California cannot increase the rent during the active term of a fixed-term lease unless the lease specifically allows for it. Here’s a breakdown of the key considerations:

1. Fixed-Term Leases (e.g., One Year Lease)

• No Rent Increase Without Lease Provision

If the lease states a fixed monthly rent for the duration of the lease (e.g., 12 months), the landlord may not increase the rent until the lease expires. Rent increases during the lease term are permissible only if the lease contract explicitly includes a clause that allows for rent increases during the term.

• Lease Provisions Allowing Increase

If the lease has a clause permitting a rent increase within the lease term, the landlord must follow the terms outlined, such as the timing and amount of increase. Such clauses are uncommon but may be negotiated upfront.

2. Month-to-Month Tenancies

• Rent Increase Allowed with Proper Notice

For tenants renting on a month-to-month basis (either by agreement or automatically after a fixed-term lease expires), landlords may increase rent at any time, provided they give written notice in accordance with California law.

• Notice Requirements for Rent Increase

- For rent increases of 10% or less (calculated over the past 12 months), the landlord must provide at least 30 days’ written notice. - For rent increases of more than 10%, the landlord must provide at least 90 days’ written notice.

Key California Laws Affecting Rent Increases During Lease

California Civil Code Sections 827 and 1947.12

• Notice of Rent Increase: Civil Code Section 827 requires landlords to provide proper written notice before increasing rent in a month-to-month tenancy.
• Written Notice Timing: The length of notice depends on the percentage increase, as outlined above.

California Tenant Protection Act of 2019 (AB 1482)

• Caps on Rent Increases: In many cities throughout California, the Tenant Protection Act limits annual rent increases to 5% plus the local rate of inflation, or 10%, whichever is lower. However, these caps apply primarily to rent increases between tenancies or during renewal periods—not during an active fixed-term lease unless the lease permits.
• Exemptions: New buildings (built within the last 15 years), single-family homes/condos (with proper notice), and certain other property types may be exempt.

Local Rent Control Ordinances

• Many California cities have their own rent control and rent increase ordinances which might impose additional restrictions on rent hikes, notice periods, or allowable increases. Landlords should verify local laws in their municipality.

Practical Implications for California Landlords

If You Have a Fixed-Term Lease

• Do not increase rent unless the lease explicitly authorizes an increase during the lease term.
• Plan rent increases to take effect after the lease expires or is up for renewal.
• Upon lease renewal, provide proper written notice and comply with any applicable rent control rules.

If You Have Month-to-Month Tenants

• Provide appropriate notice before increasing rent:

- 30 days for increases up to 10% - 90 days for increases over 10%

• Be mindful of rent caps under AB 1482 and local ordinances.

Notices Must Be in Writing and Delivered Properly

• Notices can be delivered in person or by mail (including email if the tenant agrees and local laws permit).
• Retain copies of all notices for recordkeeping.

Summary: Best Practices for Rent Increases During Lease Terms in California

Conclusion

California landlords must adhere strictly to the state’s laws governing rent increases during lease terms. Generally, rent cannot be increased during an active fixed-term lease unless the lease expressly permits it. For month-to-month tenancies, landlords can raise rent with proper written notice respecting the thresholds for notice periods. Additionally, state rent control protections, including the Tenant Protection Act, and local ordinances may impose further restrictions or requirements.

By ensuring clear lease terms, providing proper written notice, and staying informed about state and local laws, California landlords can effectively manage rent increases while maintaining compliance and good tenant relations.