When canI raise rent?

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When canI raise rent?

I have a 2 year lease with tenants. In the contract it is written: “Tenant agrees to pay $2500 per month for the term of the agreement”. It is also written “Rent will increase 5% at the end of each year (12month period)”. Can I increase the rent at the end of the first year of the contract?

Asked on December 16, 2011 under Real Estate Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

A lease, like any contract, is enforceable as per its plain terms. From what you write, the lease calls for a 5% increase at the end of the first year, even though that's not the end of the lease term. That is perfectly legal--usually, in multi-year leases, there are periodic increases. The only difficulty is that the language about it being $2,500 per month for the term of the agreement does create some ambiguity. While I believe, based on the quoted language, that the best interpretation is a base rate of $2,500, subject to a 5% increase after one year, be prepared that if the tenants disagree,  you will have to decide whether it is worth suing them to get the extra $125 per month.


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