INCREASE IN RENT BY LANDLORDS, WHAT TENANTS SHOULD KNOW ABOUT THEIR RIGHTS

INCREASE IN RENT BY LANDLORDS, WHAT TENANTS SHOULD KNOW ABOUT THEIR RIGHTS

In the context of an ever-changing economic landscape, the issue of increase in rent has become a significant legal and social challenge, particularly for low-income tenants or students. While landlords’ adjustments in rent aim to offset increasing costs or maximize profits, they often lead to negative consequences. Tenants face considerable financial pressure, the risk of housing instability, and the need to seek more affordable accommodations, often compromising on living conditions.

Moreover, unexpected or opaque rent increases can lead to disputes, disrupting the contractual relationship between landlords and tenants. The question arises: how does current legislation regulate landlords’ right to increase rent? What limits are established to ensure a balanced protection of the interests of both tenants and landlords?

The rent must be agreed upon by both parties and recorded in the lease agreement

According to current legal regulations, the rent is a mandatory term in the lease agreement for residential properties. It serves as the basis for determining the fundamental obligations of the tenant to the landlord for the lawful use of the property.

The rental is freely agreed upon by the parties in the lease contract, along with the form of periodic or one-time payment, as per legal regulations. Typically, this price remains applicable throughout the lease term, or any increase is subject to a predetermined and agreed-upon range by the parties.

It is important to note that if the State has regulations on the rental of residential properties, the parties must comply with those regulations accordingly.

Landlord has right for implementing the increase in rent, but it must be agreed upon by the tenant

Landlord is not permitted to unilaterally adjust the rent during the term of the lease, except in certain exceptional cases allowed by laws. The conditions regulating rent increases aim to balance the interests of both landlord and tenant.

Clause 2, Article 170 of the Housing Law 2023::

“2. If landlord renovates houses with consent of the tenant and the remaining rent term does not exceed one-thirds of the duration of lease agreements, the landlord has the right to adjust rent. New rent shall be negotiated by the parties; in case of failure to negotiate a new rent, the landlord has the right to unilaterally terminate lease agreements and must pay reparations for the tenant as per the law.”

Thus, based on the aforementioned provision, the landlord has the full right to reasonably and lawfully adjust the rental price from the agreed amount during the contract’s effective term. The reasonableness and legality of such an adjustment are emphasized by satisfying the following conditions:

– Applicable circumstances: when the landlord undertakes renovations to the property;

– Remaining lease term: one-third or less of the term specified in the leasing agreement;

– Mutual agreement: both the landlord and the tenant reach a consensus on the new rental price following the proposed increase.

– Additionally, the landlord must provide the tenant with prior notice of the rent increase within a reasonable time frame.

If no mutual agreement is reached, either the landlord or the tenant has the right to unilaterally terminate the rental agreement without incurring any penalties.

The tenant is entitled to compensation for the unutilized lease term, as stipulated by law.

While landlords’ adjustments in rent aim to offset increasing costs or maximize profits,
they often lead to negative consequences. (Photo: Internet)

In addition to the increase in rent, there are several other important considerations when entering into a residential lease agreement

Although notarization or certification is not mandatory, the housing lease agreement must be in writing and include the following key provisions:

– Details of the landlord and the tenant, including the full name of individuals, the name of organizations, and their respective addresses;

– Description of the rental property’s characteristics;

– Rent amount, duration, and payment method;

– Timeline for handing over the property and the lease term;

– Rights and obligations of the parties, such as the obligation to repair the property in case of damage, whether subleasing to a third party is allowed, late payment of rent, etc.;

– Commitments of the parties;

– Additional agreements (if any);

– Effective date of the lease agreement;

– Date, month, year of signing the lease agreement;

– Signatures with full names of the parties, and the seal of the organization (if one or both parties are organizations).

Legal basis:

  • Civil Code 2015;
  • Housing Law 2023.

𝐋𝐈𝐍𝐂𝐎𝐍 𝐋𝐀𝐖 𝐅𝐈𝐑𝐌 – 𝐒𝐮𝐬𝐭𝐚𝐢𝐧𝐚𝐛𝐥𝐞 𝐜𝐨𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧

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