How to handle rent increases for a single family home in Michigan

Question

How do you guys handle rent increases?  Initially, I'd go to the rental with my rent increase letter and attempt to sit down with my tenants and talk about raising the rent and get their signature.  But the husband is very moody, emotional and angry and wouldn't sign claiming they couldn't afford it.  Of course I'd give them the required 30 days notice (actually it was 40 days).  So, I'm thinking they're going to move, after he refused to sign and pay, but 30 days later he would pay it.

But now, to save myself some grief and time, I'm considering mailing them the letter "registered mail" and letting them think about it and get angry in private.  And include a signature form asking for their signature and have them mail it to me with the next month's rent.

Any suggestions? I've been doing this over 5 years now but always looking for new ideas.

Thanks.

Stewart Beal · Answer

Todd I require lease signings to be done in person by appointment.  I have found that if you do not do that, and you give them the lease to sign at their leisure, you are constantly waiting and wondering.  Are they going to sign?  Are they not?  If they refuse to meet and sign, then I market the property for rent, once you start showing the property that will motivate someone who wants to sign but just needs some extra motivation.   Another thing I would recommend is to sign a lease that automatically renews each year at 3% increase.  That way if this person stays long term, you don't need to talk about it every year.

Account Closed · Answer

If the lease is month to month, you can give them 30 days notice (more is better) of the rent increase.  There are forms for this or you can create your own.  A nice letter to go along with the form is a good idea too.  If they don't pay the new rent amount, you know that they have decided to terminate their tenancy--send them a demand for possession for non-payment of rent.  If this is a non-periodic lease (e.g. one year), you can only increase the rent after the first year is up (giving them a 30 day notice before the end of the lease that you are going to increase the rent at the start of the new year--this assumes that your lease has a clause whereby the lease renews for one year or month by month following the first year). Again...there are forms for this available.  Just make sure the forms you get are from a reputable source whereby the forms have been tested in Michigan courts.

(If this is a one-year lease with an end date that has to be renewed by a new lease, you'll need a new lease and new signature.  Or, you could amend the existing lease and extend it by an additional year with the new rent amount--you'll still need a signature.)

Todd Moriarty · Answer

Thanks for the reply.  2 weeks ago I sent my tenant a rent increase letter and, coincidently, did it exactly the way you described above.  I mailed him, certified mail, a cover letter explaining the rent increase, a form asking for his signature and to be mailed back to me with April's rent check, along with a 30 day eviction notice just in case he refused to pay it.  His lease is month-to-month and I gave him 41 days notice of rent increase.

Thomas S. · Answer

If your state landlord tenant regulations do not require the tenant to agree or sign what is the issue you are trying to resolve. Basically all you are doing is notifying the tenant of the increase not asking his permission.

Send the notice by mail with whatever info regarding eviction you want included.

Todd Moriarty · Answer

Thanks for the advice but nothing I could do to make the place nice would make a difference. It could be a golden house and they would bitch if I raised the rent.  Hahaha....You're making way too much sense and trying to reason with them. That doesn't work. There was a period there for 3 years where I didn't raise the rent on them. And during that time I replaced the driveway, and a couple windows, a storm door, a new concrete step and installed a bathroom ceiling exhaust fan.  So I felt more than justified to raise the rent a measley $50 last year.  So when I mailed him the rent increase notice, well, holy hell, he called me bitching and screaming and hung up on me!  Then he paid it anyway. They are getting a good deal, if they research comparable properties.  They know that.  I'm an excellent prompt, fair landlord. He's just never happy.

Robert Blanchard · Answer

@Todd Moriarty

What is the price point of your Rental?  How much competition is there for similar Rentals?

Have you considered including a letter with all comparable similar properties and explain the your costs (taxes, insurance, etc) have gone up and you have to pass that along to them?

If it is in the area that you are in, 85k population, they might realize that you are in fact being more than fair.

Since the Husband always raises heck, why not put them on a 6 month lease?  At the end of each 6 months,  you could increase the rent a small amount.  A $25 increase might go over better than a $50 one.   A caveat to that is that you would have to put up with them for a long time if they become problem Tenants.

What kind of improvements have you done to the property while the have been in there?   Is a Washer/Dryer included?  If so, go on Craigslist and upgrade the ones in there with a used set that looks nice.  The $250-$500 outlay should make it easier for them to accept a rent increase, and if they do leave, you could state that you have newer appliances in the property.

Todd Moriarty · Answer

Thanks for the advice

Todd Moriarty · Answer

Also, if I might add, the lease is month-to-month. So there is no term or expiration date. The lease rules still apply but this gives me more flexibility in what I can do. They asked for MM a few years ago and I agreed. Believe me, they don't want to move. They like it there. I'm just looking for more ideas and trying to protect myself legally.

Since there is no lease term, I have more freedom to do what I want, within reason. Most landlords charge more for MM leases. But I don't. I just want the fair market rate.

Jeff B. · Answer

This is my policy for lease renewals (personal experience, not legal advice).

Where the tenants are amicable, you always serve a notice, 60 days prior, that the Lease will be renewing on mm/dd/yyy

Don't ask - - T E L L.  Give your notice in appropriate lead time and if your lease is properly written, you don't need another signature, it just become effective.

The lease needs a clause like:

• 1)  "Holding Over: when the lease lapses by time, it renews xxxx".
• 2) xxxx can be 'for like terms and conditions' or 'defaults to month-to-month'.
• 3) be sure there's an block for the tenants initials when signing the original

Your notice can then be a "Notice in change of Terms & Conditions" stating the new rent and the effective date.  Serve this notice with USPS tracking and it does not (IMO) need a signed receipt.

Non payment by the tenant is then served the classic "3-day pay or quit" to begin the eviction.

Todd Moriarty · Answer

That's how I originally tried to do it, but as I said, the husband screams and whines over everything. He overreacts, refuses to pay it, then settles down and pays it. They like it there, so I know they don't want to move.  They've been there over 5 years.  What I've done in the past is include a 30 day eviction notice with the letter. I clearly state that if he won't sign and pay it, then I'll file the notice with the court. That way the clock is ticking with the notice and the day the new rent is due, and if I don't get it, I file it with the court.

How to handle rent increases for a single family home in Michigan

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