How much can rent increase after a lease ends?

Rent Increase Guidelines for Tenants in Oregon After Lease Ends

In Oregon, tenants often wonder how much their rent can increase once a lease term concludes. Understanding the rules around rent increases can help tenants prepare financially and know their rights under Oregon landlord-tenant laws.

Oregon’s Rent Control Law Overview

Oregon was the first state in the U.S. to implement statewide rent control with the passing of House Bill 2004 in 2019. This law places limits on how much landlords can raise rent annually for most residential rental properties. While rent control generally applies during the lease term and month-to-month tenancies, it also affects rent increases after a lease ends.

Key Points About Rent Increases After a Lease Ends in Oregon

• Rent increase limits apply even after a lease expires. When your lease ends and your tenancy transitions to a month-to-month agreement, your landlord can raise your rent, but there are caps.
• Annual cap on rent increases. Typically, a landlord cannot increase rent by more than 7% plus the local Consumer Price Index (CPI) annually. For example, if the 12-month CPI change is 2%, the total allowed increase would be 9%.
• Cap applies statewide. The rent increase cap applies throughout Oregon, including Portland and other cities.
• There is a minimum notice period. Oregon law requires landlords to provide tenants with at least 90 days’ written notice before a rent increase takes effect when the tenancy is month-to-month or a lease has ended.
• Exceptions to rent increase limits. New constructions occupied after February 28, 2019, single-family homes rented by someone who is not a corporation or REIT, and properties where tenants are provided a notice of the rent increase terms in the lease may be exempt.

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What Happens When Your Lease Ends?

When your fixed-term lease (typically 6 or 12 months) ends, the tenancy often converts to a month-to-month agreement unless you sign a new lease. Under this new month-to-month tenancy:

• Your landlord can increase rent but must follow the rent control limits.
• They must provide 90 days’ advance written notice of any increase.
• The increase cannot exceed the annual allowable rent increase cap.

For example, if your lease ends on June 30th, and your landlord wants to increase rent for a month-to-month tenancy starting July 1st, they must send you a written notice of the increase on or before April 1st (90 days prior).

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Calculating the Maximum Rent Increase

The rent increase cap formula is:

7% + Change in Local CPI (Consumer Price Index)

• The CPI is based on the Portland-Salem metropolitan area or your local market, as released by the Bureau of Labor Statistics.
• The total percentage is recalculated every 12 months.
• The cap applies over any rolling 12-month period, not calendar years.

For instance:

• If the CPI increased by 1.5% in your area over the last year,
• The maximum rent increase allowed is 7% + 1.5% = 8.5% for that 12-month period.

Your landlord cannot exceed this percentage when increasing rent either after a lease ends or during a month-to-month tenancy.

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Notice Requirements for Rent Increases

• For lease renewal rent increases: A landlord must provide notice at least 90 days before the lease termination date if they intend to increase rent for a new lease term.
• For month-to-month rent increases: A landlord must give at least 90 days’ written notice before the increase can take effect.
• Notices must be in writing and must clearly state the rent increase amount and the date it takes effect.
• Verbal notices or notices less than 90 days before rent changes are not valid under Oregon law.

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Exceptions and Special Cases

1. New Construction

Buildings constructed after February 28, 2019, are exempt from statewide rent control. Landlords of these properties can increase rent without the 7% plus CPI cap, but the 90-day notice still applies.

1. Single-Family Homes and Condos

If rented by an individual landlord who is not a corporation, these may be exempt from rent control, but the 90-day notice for rent increases still applies.

1. Substantial Improvements

Landlords may petition for rent increases above the cap if they make substantial improvements to the property, subject to approval by local authorities.

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Summary and What Tenants Should Do

• Oregon law limits rent increases after a lease ends to 7% plus CPI annually.
• Landlords must provide 90 days’ written notice of any rent increase.
• Upon lease expiration, if your tenancy becomes month-to-month, rent control rules still apply.
• Exceptions exist but are fairly limited.
• You should receive a formal written notice detailing the new rent amount and effective date.
• Keep track of the notice date to verify that the 90-day requirement is met.
• If you believe your landlord has violated rent increase rules, you may want to consult tenant rights organizations or legal counsel.

By understanding these provisions, Oregon tenants can better plan their housing budgets and know when to engage in discussions with their landlords about lease renewals or potential rent increases. Staying informed helps ensure your rights under Oregon tenancy law are protected.

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Additional Resources for Oregon Tenants

• Oregon Residential Landlord and Tenant Act (ORLTA)
• Local tenant advocacy groups
• Oregon Housing and Community Services websites

These sources can provide further guidance and updates on any changes to rent increase laws in the state.