California law places very specific notice requirements on landlords who wish to raise their tenants’ rent, and failing to follow those requirements can ultimately jeopardize a future eviction lawsuit.
Landlords can generally raise their tenants’ rent (in month-to-month tenancies) with thirty days’ notice, so long as the increase is no more than 10 percent higher than any point over the preceding 12 months. An increase of more than 10 percent requires sixty days’ notice to the tenant.
Many landlords don’t realize that the 10-percent requirement is cumulative of all increases. For example, assume there’s a month-to-month tenancy for $1,000/month. Within a few months, the landlord gives 30 days’ notice to the tenant that he is increasing the rent to $1,100/month. This is fine, since the increase is not greater than 10 percent. However, say the landlord wants to increase the rent by another $100 a few months after that. This increase (to $1,200/month) must be combined with the previous increase, resulting in a 20-percent total increase. Therefore, the second increase requires sixty days’ notice.
In other words, landlords contemplating a rent increase should base their math on the lowest rent over the 12 months prior to the effective date of the increase.
Tenants can potentially sue their landlords in small claims court to recoup the improper increase, and it can also cause the landlord to lose an unlawful detainer lawsuit if eviction becomes necessary. If the eviction is based on the tenant’s failure to pay rent, then the judge may notice that the three-day notice reflects an improper increase. As a result, the rent demanded in the notice is inaccurate, and the judge can dismiss the lawsuit.
Landlords should exercise caution when increasing rent; otherwise, it may come back to severely haunt them in the future.