Can Landlords Raise the Rent on Commercial Properties?

Filed under: Real Estate Law

I just received a notice from my landlord. The rent on my commercial space will increase by 20 percent next month! Isn’t that against the law?

Due to increased taxes and overhead expenses, I need to increase the monthly rent on my commercial property. Am I allowed to do that?

Whether you’re the tenant of a commercial rental space, or the landlord managing the property, rent increases can be a tricky business. Landlords are often accused of greed, even though the rent increase is necessary to cover their own expenses. Renters are wary of a rent increase because it will impact their own bottom lines, and in some cases they are simply unable to afford it.

Under California state law, landlords of residential properties are prohibited from raising rent without first announcing the rent increase 30 days in advance (and sometimes 60 days in advance, depending upon the situation). Meanwhile, no such laws prohibit a sudden rent increase for commercial properties. Instead, commercial leases are strictly governed by the original lease agreement.

So, if you’re a tenant facing a sudden rent increase, what options do you have? Check your copy of the lease carefully. It should state whether you are due a notice of rent increases. If no such clause exists, your landlord may be able to increase the rent without any advance notice.

The same advice applies if you’re a landlord who needs to raise the rent on a particular property. Check your lease agreement. If you did not agree to notify the tenant prior to rent increases, then you may be able to proceed without violating the terms of the lease.

Rent increases are often a point of contention for both lessees and landlords. But unless your lease states otherwise, the landlord is within his rights to increase rent as early as next month.

Before signing a commercial lease, consult with a real estate attorney about your rights. Since commercial leases are subject to far fewer protections than residential leases, you need to be aware of your rights and the terms of the lease before signing on the dotted line.

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