Raising the rent on a property is a delicate matter for landlords. If you plan to have a rent raising process in place, this article is for you to know whether you should or how you need to manage the process. Raising the rent on much higher side will most likely to generate tenant complaints, and also have the probability of losing the tenant who can find something more affordable.

Before you start to raise the rent on your property, you need to do some market research and check out the market rate for rent in the area of your property. Further, some specific policies and rules apply when it comes to increasing rent. All landlords must follow these rules to avoid violation of the Tenant Act. A side note here; sometimes, landlords don’t want to increase the rent if they have a trustworthy relationship with their tenants.

How to Raise the Rent on Your Property

In many states, property owners and landlords cannot raise the house rent in retaliation after exercising certain legal rights. But, the State governments have provided a strong position for landlords who want increased rental rates. That means if you’re a landlord, you may exercise your right to raise the rental prices to match the market rates to manage property improvement, maintenance, or to accommodate tax.

Another vital aspect that all landlords must be aware of is the shift in “The Tenant Protection Act.” The act has gone into effect in the State of California from January 1, 2020.

If you’re a property owner in Long Beach, know that the tenant law has changed many aspects of tenant living and rent raise. If you’re a new landlord, you might be trying to adjust to the changes and act implementation. The best way to understand the changes and nuances is to seek Long Beach Property Management professionals’ assistance.

Here is an overview of how the Tenant Protection Act or other laws impact you and your renters living in the property.

What is Rent Control Law

In California, traditionally, rent control law refers to State ordinances that limit the number of rental property owners can charge. Rent control laws specify the highest percentage by which rental property owners can raise the rent and other corresponding limits on the increase rate. In some states, the rate at which landlords raise rent is expressed as CPI Consumer Price Index.

State law AB 1482 (Tenant Protection law) went into effect in California in Jan 2020. The act typically caps rent increase statewide if you want to qualify for units at 5% plus the regional CPI raise. 10% is the lowest rent that you can charge for a year before the increase.

Additionally, if you’re a landlord, you can increase rent twice over 12 month period. AB 1482 doesn’t override restrictive counties and cities’ rent control. However, it may apply to the properties it doesn’t cover.

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Increasing the Rent on a Property in Long Beach

With Statewide rent control in Long Beach, landlords cannot increase the rent more than 5 percent, and the yearly charges of living increase (set by CPI). This means the landlords in California cannot increase the rent by more than 8 percent in most State parts.

However, individual landlords who have one single-family home, condo, and townhouse can rent an exemption. Not only this, but the property’s age is also an important factor to consider. If a rental property has received an Occupancy Certificate in the 15 years, it will get an exemption.

Note that there is an array of variables you can utilize with this law. It covers most rental properties in California, but if you have your own investment property, you may not have to consider the rental cap. We understand it is confusing for many Landlords. That is why we encourage them to seek professional help from the Long Beach property management company. Following these steps will make it easy for you to raise the rent on your property:

Also Read: Everything You Need To Know To Have A Successful Lease-Up

Step 1: Allocate your Expenses into Rent Cost

In order to make sure that being a landlord stays profitable for you, you will need to maintain positive cash flow. By allocating the following expenses into rent cost during tenant turnover or lease renewal would be the right way that you are charging enough:

  • Property taxes
  • Property Maintenance
  • Higher utility costs
  • HOA dues
  • Insurance premiums
  • Cost-of-living expenses

Step 2: Consider the State Laws or your Lease Agreement

Being a landlord, you need to review the state laws and your lease agreement to determine the amount of notice you can give to the tenant. As per most of the administrative authorities, 30 days’ notice is the minimum requirement. Communicating your tenant 90 days in advance of the lease getting up through a letter will let them know that there will be a rent increase if the lease is renewed. This can provide you the opportunity that your tenant would make any adjustment with a rent increase that matches his budget.

You can also avail of this opportunity to give them an incentive to renew their lease earlier. For instance, offering your tenant a 3% increase if they renew 60 days before their lease ends up, and otherwise, they will get a 5% increase if they wait until the last minute to renew their lease.

Lease Agreement

Step 3: Adhere to the Local Laws or other related Laws

You need to make sure that your rent increase complies with local limits and rent control laws. Also, other laws need to be determined in the process of raising the rent on your property:

» Rent Increase Law

Keep in mind that all rental property owners need to consider the California state laws that protect tenants. The law typically restricts the raise of rent for some properties. According to the Tenant Protection Act 2019, rent-controlled property owners need to adhere to the given restrictions.

Rent Increase Limit: Landlords can raise the rent by 5 percent, including yearly inflation below 10 percent. The current inflation rate in California is about 3 percent, which means landlords will raise the rent by 8 percent.

Rent Raise Frequency: Landlords can only increase the rent on the property twice 12 months. Plus, the increased amount for the 12 months should not exceed the limit given above.

» Eviction and the Tenant Protection Act

In addition to the changes mentioned above, the Tenant Protection Act has also impacted the eviction process. Put, you cannot renew the lease with your renters and ask them to evict the property just by giving them appropriate notice. To evict your property without penalty, you need to have a reasonable cause, such as their involvement in criminal activity or breach of the lease agreement or payment defaults.

If you don’t have another reason, but want your property evicted, you can still serve the notice but with a relocation fee (equal to one month’s rent). It can also cost you more as you have to pay a compensation fee to your tenants if they are senior citizens or differently able people. It is because they might have to put extra effort into finding a new house.
Security Deposit

Like other aspects, the California law doesn’t allow a security deposit of more than two months’ rent for unfurnished units. For furnished properties, this limit is three times monthly rent. However, if your tenant accepts the raise in rent, you can ask for an additional security deposit.

Get Long Beach Property Management

With several changes and laws in place, managing rental properties can be overwhelming. Many municipalities and local cities are now forming new laws to align with raising the renting process. Whether you are a vigilant landlord or new to the ownership if you’re not sure how to deal with rental properties, get the help of professional Long Beach Property Management company, RTI Properties. Our experts can guide you about the new laws and rental market rates in the state. Contact our property managers today or call now at (310) 532-5994 for more insight. With over 30 years in the business, we are here to help both landlords and tenants grow and flourish in the sunny Los Angeles neighborhoods and in all over Southern California.

Also Read: Why RTI Properties Rated Five Stars For Long Beach Property Management?


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