RENT INCREASES UNDER
CALIFORNIA LAW **
Whether you can raise the rent depends
on whether there is a lease or a rental agreement, and what it says.
Some of you are
using leases, instead of rental agreements, that is to say they have a
definite term, usually one year. If there is a lease instead of a month
to month rental agreement you canít raise the rent. However at the end
of the term you can raise the rent without notice. If, however they
continue to pay after the end of the term, and you continue to accept
rent, then you have created a month to month tenancy and you will need
to read this article and follow the rental agreement rules.(more)
For those of you
using, a month-to-month rental agreement, you can increase the rent
unless the agreement has a provision against it. If, however, you are
increasing the rent, then you 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 you give your tenant?
If there is a month-to-month (or shorter) periodic rental
agreement, you must give you at least 30 days' advance written notice of a rent
The amount of notice required depends on the
percentage of the rent increase.
You 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.
You 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.
In order to calculate the percentage of the rent increase,
we need to know the lowest rent that you charged you during the preceding 12
months, and the total of the new increase and all other increases during that
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:
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:
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
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:
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
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
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
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
- Date that the notice of rent increase is delivered to the
tenant personally -- April 15
- Earliest date that the rent increase can take effect --
- 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
you.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 you
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.
Normally in the case of a periodic rental agreement, you can
increase the rent as often as you like. However, you 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 youíre 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 you as a landlord. 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
**California Department of Consumer Affairs