I have a question about what my landlord is trying to do to me is this the right forum for that?

Asked by Eric Mahoney, 33770 Tue Oct 30, 2007

We signed a lease the first year we moved in. We have lived here now 7 years with no lease. Its a duplex and he has never raised our rent in that time. We have basically rented out the other signed and kinda managed the place for him. 3 months ago he tells me take over the lawn and I wont raise you rent.Great no problem with that. Now he says you either buy the duplex and this price or I will raise your rent $300 in Jan. Can he do this??

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11
Jim Walker, Agent, Carmichael, CA
Tue Oct 30, 2007
I disagree with Kurt. IF the property owner has the legal right to raise the rent, and IF the owner follows the proper procedures, then there is not a violation of ethics. There is however an uncomfortable situation. Please do not allow the uncomfortable sitaution to worsen. Do not use Kurts emotional and empathetic response of "highly unethical" to influence your dealings with the property owner.
Kurt does not enough facts to make that kind of an accusation,


Accusing the owner of acting unethically, after you have enjoyed seven years without a rent increase is likely to inflame the situation for you even worse. Consider the following possibilities:
1. Owner may have an adjustable rate loan that has increased, and he might need the increased rent ot cover the increased payment.
2. Owner may have other looming expenses for the property such as roof or fence \, heating cooling or some other expense.
3. Owner may have realized that by failing to increase your monthly rent in the past seven years that the market rent value has increased greatly. He may have been advised by a business advisor to put his own business interests ahead of the fondness or regard he had for you.
4. Owner has indicated he wanst to sell, he wants to give you first option to buy before putting it on the market. Because buyers look at the current rent or the market rent ( if vacant) to determine how much they will offer, he realizes that if you don't buy the property yourself, he will have to sell it to another investor.

If he does not raise your rent, the new buyer (if buyer is an investor) will not pay full value for the building due to its below market rent. However the new investor would raise your rent to market rate anyway, (or worse evict you) so the current owner would only be delaying the inevitable rent increase for you by only a few months..

If the new buyer is an owner occupant for your side of the building , the new buyer will want you out quickly so that they can move in.
4 votes
ian cockburn, Agent, New Orleans, LA
Tue Oct 30, 2007
He can raise the rent anytime he wants.
Maybe you should buy the duplex.....get a Realtor and get an idea of what the duplex is worth, and work a deal with the landlord...you may have lived there 100 yrs, but the arrangement is still a rental agreement.

A problem some renters get when they rent for a long time is they think they have an unwritten perception of ownership, but that is not the case...you are still a renter on the whims of the landlord.
Good luck, and consider buying...give yourself the equity in the property!
Web Reference:  http://www.iansellsnola.com
2 votes
Carrie Crowe…, Agent, Southaven, MS
Wed Oct 31, 2007
Eric,
My guess is the landlord is tired of being a landlord and is considering a sale. If you rent has not been raised in 7 years, you have been very lucky. Ask yourself if you could get the same ammenities in another place for a better price than adding the 300.00 If so, find yourself another place to rent. If not, I would consider paying what he is asking, if buying is not an option. If you are the owner, you could still rent out the other half to help pay your mortgage! Sounds like a great opportunity to me.
1 vote
Salt Lake Ag…, , Salt Lake City, UT
Wed Oct 31, 2007
First to answer the question, yes the PROPERTY OWNER can ask whatever they want in rent.. The market determines whether it is worth it or not.

Based on the two options it sounds like he is going to sell it and is giving you first right of refusal. If you buy it obviously he does not have to raise the rent.

The value of the property on the open market is based on the rent it is collecting. So in order to get the value out of it the rents have to be in line with the marlket.

So the real focus needs to be whether you are going to buy it or not. Again it sounds to me it is going to be sold.
1 vote
Patti Pereyra, , Chicago, IL
Tue Oct 30, 2007
Wow, you've been a pretty lucky tenant to have leased the same property for 7 years without a rent increase. I say that with full sincerity!

In answer to your question, yes, your landlord can do this. While there are average annual rent increases for each rental market, a landlord can disregard those averages and raise the rent as much as he wants.

Because you are on a verbal agreement, your tenancy is basically month-to-month and you are therefore not protected by annual lease terms that would normally not be changed until the lease expires.

Take another look at Jim's advice because it so perfectly, in my opinion, explores your landlord's possible motivation(s), then, if you really like the property, rather than feel you are being coerced, see if you can get a few opinions on the market value of the duplex and look at this as an opportunity. Considering how flexible your landlord seems to have been these past seven years, you might just have a really good opportunity on your hands.
1 vote
Deborah Madey, Agent, Brick, NJ
Tue Oct 30, 2007
It's hard to answer because every state, and even local municipalities will sometimes have different regulations that apply to landlord/tenant relationships.

There may be regulations about how much notice the landlord must give for a rent increase, time of notice for eviction, and there are, in some places, limits on the amount a rent can be raised within a period of time. A free legal aid in your state should be able to direct you to the proper source for information on the rules that apply.

Since I do not know where you are located, and I am not an attorney, the following is an opinoin only and not legal advice. My best guess is that the landlord can do this.
1 vote
Ruthless, , 60558
Wed Oct 31, 2007
Look at the thumbs up on your answers. Jim is right. Something that hasn't been mentioned (disclaimer: I'm not a tax adviser or able to give tax advice) is that the IRS looks at a landlords rent in comparison to market rates. This is what TurboTax says:
"The IRS MAY DISALLOW part of your deduction, if you do not charge FAIR MARKET RENT for your area."
Then TurboTax lets you look up median rent charged in your county.

We just bought a two flat with your same situation. One tenant had lived there 7 years without a rent increase. Our final negotiations with the previous owner were delayed because he was IN THE HOSPITAL and too medicated to respond. We bought the property with POSITIVE CASH FLOW.

This is an excellent opportunity for you to buy the property. Talk to a loan officer, talk to a tax adviser, talk to a financial adviser, talk to a real estate agent, talk to a real estate attorney, AND TALK TO THE LANDLORD!
I bet (I don't know, though) that you can get a loan for 70-80% of the value of the property, get a second mortgage for 20-30% from your landlord (owner financing) and come out ahead of the game. If you do this, don't forget to get a home inspector too.

I just looked at your profile and you are in Largo, FL. The median rent in your county according to 2006 TurboTax for a 2 bedroom is $838 and for a 3 bedroom is $1079. Looking at multi-family homes listed for sale in Largo, I think you could do this.

DEBORAH: Florida doesn't have rent control does it? The landlord can raise the rent that much, right?

Please let us know any other details that you feel comfortable in sharing (such as your current rent, asking price, etc.). You did come to the right forum. You will get lots of help here.

Good luck and keep us posted.
Ruth
Web Reference:  http://www.irs.gov
0 votes
Pam Winterba…, Agent, Danville, VA
Tue Oct 30, 2007
In California the landlord can raise the rent to a long term tenant with a 60 notice (in writing of course). I am not sure which State you are writing from.
0 votes
Deborah Madey, Agent, Brick, NJ
Tue Oct 30, 2007
I agree w/ Jim about not letting Kurt's comments sway you into a negative frame of mind in your discussions or decisons w/ your landlord.

There is nothing wrong w/ a landlord raising rent, providing the property is not in a rent control area, and the proper procedures are followed. I don't know your area, so I can't comment on that. I don't know if the rent you are currently paying has been below market. You might have been getting a bargain for years, and the $300 increase might still have you below the average market rents for your area. That isn't a situation in which you would want to alienate the landlord. Again, I don't know enough to voice specific guidance, but did want to point these possiblitiies out before you became angry w/ your landlord.
0 votes
Kurt Thomas, , 81501
Tue Oct 30, 2007
I am not for sure on the legality of this all however it is highly unethical. One lesson to be learned, never do anything for a landlord, or even rent from one without a lease agreement. Get everything in writing. Most leases have a clause that protects the renter from a huge rent increase. Usually a high increase would be about 5%, and most leases that I have seen protect the renter from an increase higher than that. Contact your local authority on renters rights.
0 votes
Christine Bo…, Agent, Gainesville, FL
Tue Oct 30, 2007
Probably yes, but I suggest you contact an attorney. Your question here will fall under whatever State your live in. Each State may have different criteria on how to evict a tenant, or the # of days a "Notice" must be posted. Essentially you are on a month to month lease with no formal written lease agreement. Your landlord may be within his rights to raise the rent, but it should come with some type of written notice? You may a legal-aid association in your area that can answer your questions.
0 votes
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