Of the 100 largest U.S. cities, 91 have seen rent increases over the last year. If you’re planning to raise the rent, it’s important (and legally required) to give your tenants a rent increase letter in advance so they have time to prepare and decide if they want to renew their lease.
Here’s a comprehensive outline of what to include in a rent increase notice, when and how to deliver it, plus a free rent increase letter template.
Key takeaways:
- A rent increase letter is a written notice informing tenants of an upcoming change in their rent, including the new amount, effective date, and response deadlines.
- Landlords typically must provide a notice of raising rent 30 to 90 days before the increase takes effect.
- State and local laws may include regulations for rent increase amounts, frequency, and notice periods.
- Delivering a notice of rent increase can be done via certified mail, email, or in person. Always get proof of receipt for your records.
- When writing a rent increase letter, be clear and professional, provide a reason for the increase, include deadlines, and consider using a template to cover all key details.
What is a rent increase letter?
A rent increase letter is a written notice to tenants informing them of an upcoming change in their monthly rent amount. This letter serves as an official record of the rent adjustment, detailing the new amount and the effective date of the change. The purpose of this notice is to communicate the upcoming rent increase, ensuring both parties are informed and can plan accordingly.
Reasons for sending a rent increase letter
Rent increase letters aren’t just a formality—they’re a vital tool for maintaining transparency and compliance. Here’s why they matter:
- Legal compliance: Most states require written notice for rent increases, with clear deadlines and terms.
- Avoiding disputes: A well-drafted letter helps prevent misunderstandings with tenants.
- Maintaining tenant relationships: Communicating a rent adjustment with clear reasoning can foster trust and reduce turnover.
- Financial clarity: Ensures tenants understand the updated rent amount and payment expectations.
- Recordkeeping: Documents notification of an increase in rent and delivery confirmations for your records in case of legal disputes.
When to send a rent increase notice
The notice period for rent increases will depend on your state laws and lease agreement (annual rent versus month-to-month). Generally, a landlord must provide a notice of rent increase to tenants 30 to 90 days in advance.
While an increase in rent notice is typically sent when a lease is up for renewal, there are other circumstances where you may be able to raise the rent. These can include:
- Lease renewals: When a lease term is ending, landlords may increase rent for the new agreement to reflect current market rates.
- Month-to-month leases: In month-to-month agreements, landlords can usually raise rent with 30 days’ notice.
- Legal adjustments: Local rent control laws may permit rent increases during a lease to address rising property taxes or maintenance costs.
- Significant improvements: Upgrades or improvements that significantly increase its value may justify a rent increase, even during the lease term.
- Economic conditions: In areas experiencing high inflation or housing shortages, landlords may raise rents to match market rates.
It’s really important to know the local rules and what your lease says about rent increases. That way, you can make sure any changes and notice periods are handled correctly.
What to include in a rent increase letter to tenants
The rent increase letter format may vary depending on where your property is located, but there are some key details that usually need to be included:
- Tenant’s name and contact details: Clearly identify the tenant.
- Rental property address: Specify the unit the letter refers to.
- Notice date: When the letter is issued.
- New rent details: Include the current rent, the proposed increase, and the new rent amount.
- Effective date: State when the new rent will begin.
- Response deadline: Give tenants a clear date to accept or decline the terms.
- Delivery method: Mention whether it was sent via certified mail, email, or delivered in person.
- Local laws: Cite state regulations for raising rent in your area (e.g., Civ. Code § 1947.12.).
Sample Rent Increase Letter
[DATE]
[TENANT NAME]
[PROPERTY ADDRESS]
Dear [TENANT NAME],
Thank you for being a valued tenant at [PROPERTY ADDRESS]. Your existing lease is set to expire on [LEASE EXPIRY DATE]. Starting [LEASE RENEWAL DATE], the monthly rent for your unit will increase from [CURRENT RENT PRICE] to [NEW RENT PRICE]. The adjustment is due to [REASON FOR INCREASE], and in compliance with [STATE LAW].
Should you decide to renew your lease, this will be your new monthly rent payment that will take effect as of [NEW LEASE TERM DATE]. However, all other aspects of the lease agreement will remain the same.
If you don’t wish to renew your lease, please provide a non-renewal lease letter by no later than [DATE], as stated on the lease.
If you have any questions about the new rent price or would like to discuss the increase, feel free to contact me.
Sincerely,
[LANDLORD NAME]
[CONTACT INFORMATION]
How to write a friendly rent increase letter
Follow these tips to draft an effective rent increase letter that maintains a positive relationship with your tenants:
- Be specific: Include all necessary details, such as the new rent amount and effective date.
- Use professional language: Keep the tone formal but approachable, showing consideration for the tenant’s situation.
- Provide a reason: Include a brief explanation for the rent increase, such as rising property taxes, maintenance costs, or property improvements, to be transparent and help tenants understand the adjustment.
- Include clear deadlines: Specify when tenants need to respond and how they can accept or decline the new terms.
- Use a template: A rent increase letter PDF template can help streamline the process and ensure you’re not missing any key details.
If your tenant doesn’t respond to the rent increase letter or pay the increased rent amount by the deadline, you can begin enforcing late payment penalties outlined in the lease agreement. These may include sending a late rent notice, charing late fees, or even beginning the eviction process.
How to deliver a notice of raising rent
After writing a rent increase letter, choose a compliant delivery method:
- Certified mail: Provides proof of delivery.
- Email: Attach a PDF copy and request confirmation of receipt.
- In-person delivery: Get a signed receipt directly.
Some state or local laws may specify a certain delivery method. For example, rent increase letter laws in California require a 30-day written notice for increases under 10% and a 90-day notice for larger adjustments.
Make sure you can prove the rent increase letter was sent within the required notice period. The send date should always be on a certified mailing receipt, email, or signed notice.
Compliance tips for rent increase letters
Avoid legal pitfalls by following these tips:
- Check local limits: Some states have rules about how much rent can increase. In Oregon, the allowable annual rent increase is 10%.
- Meet notice periods: Provide 30–90 days’ notice, depending on state requirements.
- Delivery proof: Verify receipt via certified mail, email, or in-person delivery.
Always research your local and state rent increase laws. Rent control and rent stabilization laws often limit increases to a certain percentage or dollar amount and regulate how frequently you can raise rent prices.
In New York, lease renewals with rent increases for rent-stabilized units are capped at 2.75% for one-year leases and 5.25% for two-year leases (annually adjusted).
Consequences of not using a rent increase letter
Failing to provide a formal rent adjustment letter for increases can have serious legal and practical consequences. Here are the risks:
- Legal penalties: Not adhering to local laws can result in fines, legal disputes, or invalidation of the rent increase.
- Tenant disputes: Without proper notice of a rent increase, tenants may claim it’s unfair or unlawful, potentially resulting in costly legal battles.
- Unpaid rent: Tenants who think a rent increase is unfair may withhold payment, resulting in late or unpaid rent and possible eviction (get tips on how to collect unpaid rent).
- Delayed rent collection: If tenants are unaware of the rent increase and continue paying the old amount, it may lead to late fees and affect your cash flow.
- Unsuccessful rent increases: Rent increases without proper notice may not be legally enforceable, and you likely can’t collect the higher amount.
Notifying your tenants of an upcoming change in their rent will help avoid these issues and keep payments on track. Consider online rent collection to simplify rate increases.
Instead of manually updating rent rolls, the best rent collection apps let you adjust rent prices, deposit payments, and view payment history to easily see who has or hasn’t paid.
Put Rent Collection on Autopilot
Get paid on time with automated rent payments, reminders, and late fees.
Rent increase letter checklist
Follow these best practices to write a clear and compliant letter for rent increases:
- Review local laws: Check your state’s rules regarding notice periods and allowable rent increases. For example, when can a landlord raise rent in your state?
- Follow lease terms: Ensure the rent increase aligns with any terms outlined in the current lease.
- Check market rates: Research local rental rates for similar properties in your area to calculate how much to charge for rent. For instance, the U.S. Fair Market Rent for a 2-bedroom apartment increased by 0.06% in 2024, following a 12.4% increase in 2023.
- Specify key details: Include the tenant’s name, property address, current and new rent amounts, and effective date.
- Provide justification: Briefly explain the reason for the rent increase, such as rising maintenance costs or property improvements.
- Be professional and clear: Use formal but approachable language to maintain a positive tenant relationship.
- Give adequate notice: Deliver the letter within the legally required notice period (typically 30 to 90 days in advance) and request proof of receipt.
- Adjust security deposits: Update the security deposit amount if it changes with the new rent, ensuring compliance with local laws.
- Include a prorated rent clause: Specify any rent adjustments for partial months (here’s how to figure out prorated rent).
- Add response instructions: Specify how and when tenants should respond to the notice.
- Document the process: Keep a signed copy of the letter and proof of delivery for your records.
- Make paying rent easy: Simplify how to collect rent by letting tenants pay online using a card or bank transfer.
- Prepare for questions: Be ready to discuss the changes and address tenant concerns.
Automate rent collection with Baselane
Once your tenant accepts the new rent price, you can easily set up their lease and accept payments online with Baselane rent collection. Easily adjust rent and lease terms, automate invoices, schedule reminders, and get payments deposited directly into your Baselane or external bank account.
