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How Much Can a New Owner Raise the Rent?

by Shilpi Paul

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Recently, one of our commenters posed the following questions:

How much can a new owner increase the rent on a tenant who still lives on a pre-existing month-to-month lease? How does rent control work when ownership changes?

We reached out to Joel Cohn, the Legislative Director of DC’s Office of the Tenant Advocate, for an answer. Here is what Cohn said:

Let’s assume that the unit is under rent control because the previous owner was not entitled to the small landlord exemption or any other rent control exemption. Upon transfer of ownership, the unit would remain under rent control unless the new owner is entitled to the small landlord exemption (or another exemption). The new owner may only take the small landlord exemption if he or she owns four or fewer rental units in the District, and does not own these units as a business entity. Without this exemption, the rent control caps will apply regardless of the lease term.

So long as the unit remains under rent control, the maximum standard annual rent increase is based upon the CPI [consumer price index] percentage for the current “rent control” year. That figure is published each February by the DC Rental Housing Commission and it applies to the “rent control” year (starting on May 1st and running through April 30th of the following calendar year).

The cap for elderly tenants (age 62 and over) and tenants with disabilities is the CPI percentage itself. For all other tenants, the cap is the CPI plus 2 percent. The current CPI figure is 3.6 percent. Thus, for elderly tenants and tenants with disabilities, the maximum rent increase is equal to the current rent charged multiplied by 0.036. For all other tenants, the maximum rent increase is equal to the rent charged multiplied by 0.056. An owner may take a larger rent increase only upon a vacancy or by one of five possible petitions to the Rent Administrator.

Readers, if you have any further insights, please let us know in the comments.

See other articles related to: rent control

This article originally published at http://dc.urbanturf.com/articles/blog/how_much_can_a_new_owner_raise_the_rent/6328

4 Comments

  1. MM said at 11:27 am on Wednesday November 21, 2012:

    If the unit is not under rent control, are there any limits to what the new owners can charge? For example, can they more than double the rent?

  1. mona said at 12:57 pm on Wednesday November 21, 2012:

    If an owner has 4 or fewer rental units and they aren’t owned as a business there is no cap on how much they can raise the rent

  1. RR said at 6:18 pm on Wednesday November 21, 2012:

    What prevents the unregulated landlord from demanding unreasonable rent for the property is the owner’s financial need to keep the property occupied. An empty rental yields nothing at all. In fact, an empty apartment is a net loss because the landlord is still paying utilities and upkeep on it.

  1. andy said at 4:30 pm on Friday November 23, 2012:

    This is why buying is often a smart choice. No more rent increases!

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