3

I'm looking to sign a lease and I notice there is a statement that the landlord can increase rent with 30 days notice. Is this normal for a lease agreement? Should I be concerned?

The exact wording is below: "Upon thirty (30) days written notice to Resident, Landlord may alter rental payment to cover additional costs in operating the premises incurred by Landlord because of any increase in ad valorem property taxes, charges for the electricity, heating fuel, and water consumed at the property, or increases in premiums paid for liability, fire or worker compensation insurance. Any such increased payment shall be additional rent."

This is in Michigan, just outside the city of Ann Arbor.

  • If this is in the US, tax escalator clauses are not uncommon, but I've never seen someone try to tack on insurance/utility increases. In my view that list is too long to be agreeable, if there is more specific language about when these increases can occur that make it clear that they can't arbitrarily jack it up then it might be agreeable. – Hart CO Aug 8 '17 at 18:52
  • If you visit again, mhoran outdid me. He cited your state law, I'd suggest assigning "accepted answer" to him. – JTP - Apologise to Monica Aug 8 '17 at 21:33
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I went to the state of Michigan for information regarding tenants and landlords

Q3 What provisions are prohibited by law from being included in the lease?

The Michigan Truth in Renting Act regulates residential leases prohibiting certain clauses or provisions and prescribing penalties. A provision or clause in a lease that violates the Truth in Renting Act is void. In particular, a written lease shall not include a provision which:

...

  1. Provides that the landlord may alter a lease provision after the lease begins without the tenant’s written consent, EXCEPT: with 30 days’ written notice, the landlord may make the following types of adjustments, as long as there is a clause in the lease allowing for the adjustments:

    • changes required by federal, state, or local law, rule, or regulation;
    • changes in rules relating to the property meant to protect health, safety, and peaceful enjoyment; and
    • changes in the amount of rental payments to cover additional costs incurred by the landlord because of increases in property taxes, increases in utilities, and increases in property insurance premiums.

In other words they can't change the rent unless they give you 30 days notice and it is for one of the stated reasons such as: taxes, utilities, and property insurance. And they have a clause in the lease

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Rent laws vary a bit by state, but it sounds like you have a "tenant at will" agreement. It should be both ways, i.e. You can give landlord 30 day notice.

If I am wrong, and you have a year agreement, he's trying to squeeze you on any of his own expenses going up. That means if the 30 days is not reciprocal, you are taking on a huge risk, in my opinion.

  • I cannot give my landlord 30 days notice looking later in the contract; this is not reciprocal. Thanks for your info. – Jonathan Aug 8 '17 at 19:22
  • Good point about this being aceptable if month to month, I had assumed in my comment that it was a year-long lease. – Hart CO Aug 8 '17 at 19:28

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