Rentals in Los Angeles>Question Details

Bis2002, Home Buyer in Santa Monica, CA

Is it common for a 5% rent increase to be built into a 2 year lease?

Asked by Bis2002, Santa Monica, CA Wed Jul 11, 2012

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Dear Bis,
Yes, it's pretty common for any lease over one year to include an increase. I have seen 2% increases but not 5% in my area. I assume this is something you might be able to negotiate...? Have your Realtor work on it for you!
0 votes Thank Flag Link Tue Jul 24, 2012
The allowable rent increase in Los Angeles is 3% and in Santa Monica it is 1.54%. Since this property is not under rent control and is a house, 5% seems fairly reasonable to me. You could always try to negotiate before you sign and maybe they will bring it down to 3 or 4%.

Good Luck!
0 votes Thank Flag Link Thu Jul 12, 2012
Did the landlord tell you why the 5% increase with 2 year lease?
0 votes Thank Flag Link Thu Jul 12, 2012
That makes a big difference. If your not in rent control then the increase is negotiable between you and the landlord. Are you getting in at a discount? So the increase would justify the local market rate?
If you're questioning it, sounds like the 5% is too high. But if you really want the place, try countering the landlord with a better term.
0 votes Thank Flag Link Thu Jul 12, 2012
I think my posting has me I the wrong location. I'm actually renting a SF home on the south end of Westwood, not rent controlled in any way.
0 votes Thank Flag Link Thu Jul 12, 2012
It is not common. if you are signing a 2 year lease, in most cases the landlord should be satisfied with a long term lease. It saves landlord money to have tenants stay longer than a year. Each time tenants move out there are inevitable expenses to get the unit ready for the next tenant.

By any chance, will you be paying below market for the 1st year or getting special concessions? You also will want to check your rent control rules for your area.
0 votes Thank Flag Link Wed Jul 11, 2012
A 5% increase is a very generous return, considering that for 2012 the approved increase was 1.54%. Santa Monica rent control is very strict (if you fall under its protection). Contact them and find out if you would be covered.
0 votes Thank Flag Link Wed Jul 11, 2012
Everything is possible, but aren't you in rent control? Santa Monica has restrictions, restricting everything! Investigate before you sign anything?

Good Luck!
0 votes Thank Flag Link Wed Jul 11, 2012
it depends on the city where the property is located and whether or not is rent controlled... some properties are not rent controlled if they were built after certain date...
5% does not seem unreasonable, but it is negotiable...

Think about buying if you can... then you do not have to worry about this.. and with rates as low as 3.85% is a great time to buy!

Ron Escobar, MBA
Real Estate Expert!
0 votes Thank Flag Link Wed Jul 11, 2012
Certainly not. This is something I would negotiate out. The benefits of signing a 2-year are to tie in your present lease. I am not sure what the allowable increase is now in Santa Monica, but there is absolutely no reason to sign a 2 year lease with an increase factored in, other than the fact that they cannot easily get you out.
0 votes Thank Flag Link Wed Jul 11, 2012
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