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Can you increase rent during a lease term?

On Behalf of | Jun 21, 2024 | Real Estate Law

Increased rent can be complicated for both landlords and tenants. For the former, it could mean maintaining a steady income stream and profitability. Understandably, there is a good chance that the tenants will not like the idea.

As a property owner, you may wonder if you could implement a rent hike during a lease term. The simple answer is it depends on the type of lease.

Landlords cannot raise rent in fixed-term leases

In fixed-term leases, the agreed-upon rent must remain fixed throughout the entire lease term, which typically lasts a year. This setup potentially offers stability for all parties.

Property owners can only increase rent mid-period if there is a clause in the contract that permits for such adjustment under specific circumstances. These provisions must be clearly outlined in the agreement and signed by both parties before the lease begins.

In some cases, mutual agreements could work. Landlords may approach their tenants with a proposal to do upgrades to the property, and if the latter agrees to the increase, a written amendment to the lease agreement must follow suit.

Month-to-month leases are more flexible

While less predictable in terms of rent, month-to-month leases allow landlords to raise rent. They must notify tenants at least 30 days before the new rent takes effect. In New Hampshire, there is no cap on how much an owner can increase. However, responsible property ownership means considering market conditions before making a decision, even with month-to-month leases.

Transparency creates healthier landlord-tenant relationship

As rent escalation can be a sensitive discussion and can lead to losing a good tenant, it is essential to maintain transparency before, during and even after the lease. An experienced real estate lawyer can help craft a clear lease agreement to avoid any future disputes. Remember, satisfied tenants are often good signs of a secured investment.