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How Does Rent Control Work?

Rent control often involves more than limits on rent increases or total rent. Many rent control laws also contain tenant-protection measures, such as restrictions on when landlords can terminate a tenancy, rules about how much notice landlords must give tenants before raising rent, and requirements that landlords pay tenants interest on security deposits.

Common Rent Control Rules

Some rent control laws address only one or two rent-related topics, while others cover many more landlord-tenant issues. Although rent control laws vary, most contain at least one of the following:

  • Rent cap formulas. A few laws require regulators use a formula to set the maximum rent landlords can charge for a particular unit.
  • Limits on rent increases during a tenancy. Some laws limit landlords’ ability to raise the rent until the current tenant leaves.
  • Limits on rent increases over a certain period of time. Some laws set a formula for how much (usually a percentage of the existing rent) landlords can raise rent for the same unit during a designated time period (for example, limiting rent increases to no more than 3% of existing rent during any 12-month period).
  • Registration requirements. Landlords often have to register their rental properties with a board or commission.
  • Security deposit rules. This kind of rule says how landlords must hold security deposits (for example, in an interest-bearing account at a federally insured bank).
  • Rent-increase procedures. The law can set procedures landlords must follow when giving notice about a rent increase—for example, having to disclose to tenants that they have the right to request that the rent control board to review an increase.
  • Termination procedures. Landlords must follow procedural rules when terminating a tenancy. For instance, landlords might have to give at least 30 days’ written notice before termination.
  • Eviction protection. Eviction-protection regulations require landlords to have a good reason (explained below) to end a tenancy.
  • Tenant education. Several laws require landlords to give tenants information sheets when tenancies begin, change, or end.
Eviction Protection

Other than limiting rent increases, the most common tenant protection in rent control laws is eviction protection. Without rent control laws, landlords can normally end a month-to-month tenancy, or choose to not renew a lease, for any non-discriminatory or non-retaliatory reason. Many rent control laws, though, require landlords to have a good reason (or just cause) to end tenancies, such as:

  • a tenant’s violation of a significant term of the lease or rental agreement—for example, failing to pay rent or allowing unauthorized people to live in the rental unit
  • a tenant’s illegal activities on the premises
  • a landlord’s desire to move into the rental unit (or have a specified family member move in), or
  • renovation or remodeling that will make it impossible or unsafe for tenants to continue in residence.

Landlords who end tenancies without just cause might face stiff civil—and even criminal—penalties. Also, some rent control laws require that a just cause be the landlord’s “dominant motive” for ending a tenancy. Under these laws, tenants or rent control boards can take action against landlords who use a just cause as a pretense for ending a tenancy, while really acting out of a desire to raise rent. Proving a landlord’s true motive, though, can be very difficult.

Rent Control by State

There is no national rent control law. Instead, individual states address rent control by:

  • passing a law that prohibits localities from enacting their own regulations
  • declining to pass any laws that mention rent control (leaving individual localities free to enact their own provisions)
  • passing a law explicitly allowing local ordinances (stating, for example, that cities or counties in the state may enact rent control), or
  • enacting statewide law.

In 2019, Oregon passed the first statewide rent control law. California's statewide rent control laws will take effect on January 1, 2020. Similarly, Washington, D.C., has district-wide rent control. Some other states, such as New York, allow counties and cities to enact their own rent control ordinances. In the past, only big cities had rent control, but these days more and more smaller cities and towns are adopting rent control measures (especially in California).

Types of Property Subject to Rent Control

Rent control laws often exempt certain properties. (Being exempt means that these properties aren’t subject to the normal rent control rules.) And many laws allow owners of specified properties to apply for an exemption. Examples of properties that are either exempt or might be eligible for an exemption include:

  • new buildings
  • buildings owned by a natural person (not a corporation) who owns only a few rental units
  • owner-occupied buildings (usually with no more than four units)
  • single-family houses (including condominiums and townhouses), and
  • luxury units (typically properties where rent was higher than a certain amount at the time the rent control law went into effect).
More Information About Rent Control

The best source of information about rent control in any area is often the local rent control board or commission. If you live in an area with rent control and you don’t know whom to contact, a quick Internet search for “rent control” and the name of your city should provide the information you need. You might find a rent control handbook or guide posted on the websites of the board, commission, or city, along with other resources for both landlords and tenants. Also, look for a website that’s maintained by a local tenants’ rights group—rent control is often the result of tenant activism, and typically these tenants remain organized, vigilant, and eager to communicate their hard-won rights to others.

If you need information or actual assistance and don’t get it from your rent control organization, a local landlord-tenant attorney should be able to help you. An experienced lawyer will be able to explain the law and advise you on how to proceed with any disputes or problems.

From Lawyers  By Ann O’Connell, Attorney

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