TL;DR:
A rent increase letter is a formal written notice landlords send to tenants to announce a rise in rent. Here's what landlords should include, how much notice to give, legal considerations, and how to raise rent professionally while maintaining good tenant relationships.
Rent Increase Letter
A rent increase letter is one of the most critical documents in a rental business, and it serves two purposes. First, it legally informs a tenant of a rent change, and second, it helps set expectations while preserving a professional, respectful relationship. Whether you're a landlord managing one unit or a property manager overseeing multiple rental properties, knowing how to structure an effective increase letter matters.
What Is a Rent Increase Letter?
A rent increase letter is a formal written notice a landlord sends to a tenant to inform them of an upcoming rent increase. In simple terms, it tells the tenant their current rent will change to a new rent amount on a specific date.
This type of letter is also commonly called a rent increase notice or notice of rent increase. Regardless of the wording, the goal is the same. The letter is designed to provide clear, documented communication about a rent increase and to give the tenant time to decide whether to accept the increase or plan to move when the lease expires.
Why Landlords Send Rent Increase Notices
Raising rent is often necessary to manage rental properties. Common reasons include increased maintenance costs, higher property taxes, insurance premiums, or recent property improvements that add value to the home.
A well-written rent increase notice helps tenants understand that the increase isn't arbitrary, and they're more likely to accept higher rent when they understand the cost, market conditions, or the neighborhood's fair market rent.
Legal Basics: Advance Notice and Local Laws
Most states require landlords to provide at least 30 days written notice before a rent increase takes effect. In some jurisdictions, the required notice period is 30 to 60 days, while larger cities may require up to 90 days of advance notice.
For example, in California, if the rent increase is more than 10%, landlords must provide 90 days written notice. In cities with rent control or strict local laws, additional rules could apply.
Because laws vary by city and state, you should always confirm the required notice before delivering a rent increase letter. When in doubt, providing more notice than the legal minimum gives tenants time to adjust their budget or make a renewal decision. While you can keep a standard rent increase letter with your landlord forms, it's best to tailor the letter to current conditions and the market before sending it to your tenants.
Monthly Rent Changes and Fair Market Rent
A rent increase letter should clearly state the new monthly rent and the effective date. If your tenant currently pays $1,500 per month and the new monthly rent is $1,575, that change has to be clearly stated.
Landlords often base increases on fair market rent, which reflects average rental prices in the market or city. A modest increase of 3% to 5% annually is commonly considered reasonable, depending on local laws and rent regulation.
Being transparent about how the new monthly rent was determined helps your tenants see the increase as justified for the current market, rather than a punishment. You may be focused on how to improve cash flow, but your tenants are focused on whether they can afford to continue renting from you.
Raising Rent While Maintaining Good Tenant Relationships
When raising rent, tone is everything. A professional rent increase letter should maintain a neutral, respectful tone and avoid emotional language. If you thank the tenant for their tenancy and for being a responsible renter, it can go a long way.
A friendly rent increase letter doesn't mean apologizing. It means communicating clearly, politely, and consistently, which helps maintain long-term tenancy and reduces conflict. For example, if your tenant is renting with pets that weren't part of the original lease, you may need to increase their rent at renewal.
You should never raise rent as a punishment or to force a tenant to move out, as doing so may violate laws and damage trust.
What to Include in a Rent Increase Letter
A compliant rent increase letter should include:
- Tenant and property details
- Current rent and new rent amount
- The rent increase date
- Advance notice period and response deadline
- A brief justification (market conditions, maintenance costs, or property improvements)
- Contact information for questions
Including these details ensures the tenant knows what to expect and when. It's also smart to clarify whether the increase applies under the original lease, at renewal, or when the lease expires, and a new lease is offered.
Sample Rent Increase Letter and Templates
Using a sample rent increase letter or a rent increase letter template from a professional platform can help landlords avoid missing key details. However, any template should be reviewed and customized to reflect your local laws, lease agreements, and the specific rental situation. Having an attorney review your increase letter can provide additional confidence and compliance.
Rent Increase Notices and Lease Agreements
A rent increase notice should align with the rental agreement and lease terms. Keep in mind that some leases allow rent changes only at renewal, while others permit increases with proper notice on a month-to-month tenancy.
If the lease is about to expire, landlords typically provide notice before the renewal, giving tenants the option to accept the new rent or move out. If the tenant agrees, a new lease is signed reflecting the higher rent.
Delivering the Letter and Keeping Records
Delivering the rent increase letter properly is just as important as writing it, and common delivery methods include certified mail, hand delivery, or other verifiable methods allowed by law.
Certified mail provides proof that the tenant received the written notice, which is helpful if there's a dispute. When you send the notice, you should also keep a copy for your records, as maintaining organized records is essential for managing rental properties professionally and protecting your rental business.
Rent Increases, Security Deposits, and Payments
A rent increase doesn't automatically affect the security deposit unless local laws or lease agreements allow adjustments, and you should never require additional money for the deposit without legal justification.
Tenants may also ask about payment methods after a rent increase. If you provide modern options and resources, like guidance on payment methods or rent reporting, it can improve the tenant experience and help renters manage higher rent responsibly.
Expert Tips for Property Managers and Landlords
Whether you're a landlord or property manager, when you create a rent increase letter, it's essential that you:
- Provide more notice than required whenever possible
- Use a consistent message across all rental properties
- Reference market data, not emotions
- Stay compliant with rent control and local laws
- Have an attorney review notices for high increases
- Maintain professionalism in every letter
For property managers, consistency and documentation are keys to protecting both the property owner and tenant relationships. Remember, a well-crafted rent increase letter is more than a formality. It's a professional tool that protects landlords, respects tenants, and supports a sustainable rental business.
FAQs About Rent Increase Letters
What is a rent increase letter?
A rent increase letter is a formal written notice that informs a tenant of an upcoming rent increase, including the new rent amount and effective date.
How much notice is required for a rent increase?
Most states require at least 30 days written notice, but some cities and states require 60 or 90 days depending on local laws and rent control rules.
Can a landlord raise rent during a lease?
In most cases, rent cannot be raised during an active lease unless the lease specifically allows it. Rent increases typically happen at renewal or on month-to-month tenancies.
Should a rent increase letter explain the reason?
Yes. Including a reasonable explanation, such as market changes, maintenance costs, or property improvements, helps your tenants understand and accept the increase.
How should a rent increase notice be delivered?
It's best to deliver a rent increase notice using certified mail or another verifiable method to confirm receipt.
Can rent be raised as punishment?
No. Landlords cannot raise rent as retaliation or punishment for a tenant's behavior, and doing so may violate housing laws.
Should landlords keep copies of rent increase letters?
Absolutely. Keeping records protects landlords and property managers in the event of disputes.
