Rent control involves limiting the amount by which a landlord can increase the rent to ensure that tenants will not be surprised by a sudden surge in their costs.
As a landlord, you need to be aware of how rent control works so you can be sure that you are not breaking the law when you raise the rent.
Before you make any changes, check out these facts about rent control.
How Does Rent Control Affect Tenants and Landlords?
The main point of rent control is to make sure that rent remains affordable for most people.
In particular, this law only allows landlords to raise rent by a small percentage each year.
Without it, many landlords would increase rent any time the demand for rental homes increased.
This could make rent unaffordable for low-income residents.
While rent control is focused on keeping the rental price reasonable, it does have some other effects.
For example, an area with rent control laws also requires landlords to make repairs within a specific period.
If you don’t make the repairs fast enough, your tenant can pay for the repairs and take the cost out of the rent.
If you try to fight this action, you will have to answer to a local rent control agency, which likely gave the tenant permission to withhold the rent from you in the first place.
The same agency will make sure you do not evict your tenants without a good reason.
After all, rent control usually ends when the renters move out, so some landlords try to find any reason to evict so they can charge the next tenant more.
Does Rent Control Apply to All Landlords and Tenants?
Not every area has rent control.
The cities that do include New York City, Washington, D.C., and Newark on the East Coast.
It includes Los Angeles, San Francisco, Oakland, and San Jose on the West Coast.
Other areas of New York as well as some cities in Maryland also have rent control.
At the same time, more than 30 states have laws against rent control, so chances are you won’t be dealing with it if you don’t live on the coast.
What Are the Pros and Cons of Rent Control?
As you might imagine, rent control is a controversial topic with many pros and cons.
Of course, it tends to be most beneficial to tenants, since the main advantage is that they will not have to worry about paying for a sudden increase in rent.
In addition, rent control can help entire cities find a balance when it comes to its residents, since the lower and middle classes won’t be forced out due to increased rents.
On the other hand, controlling the rent can cause many tenants to stay in the same rental house or apartment longer than they normally would.
The result is a reduction in available rentals on the market and an increase in price of the ones that are available.
Some tenants may try to take advantage of the law by subleasing to other people and charging more than their rent even costs, allowing them to make a profit.
Having a basic understanding of rent control is important, but you should also check local laws and ordinances for a full understanding of your responsibilities as a landlord.
Knowing what to expect will allow you to better predict your income and deal with your tenants appropriately.
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