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How a rise in rent can lead to a legal dispute

When renters in Michigan first sign a lease agreement, they generally know what the price of their rent is going to be for the duration of their lease agreement. While most renters know that their rent can increase over the course of their stay at a rental property, some may not consider whether that raise is legal or not.

Such may have been the case for one California woman who received notice that the rent of her five-bedroom home was going to increase from $6,000 a month to $11,000. As she explained to reporters for a piece on rising rental costs in the San Francisco area, this was enough to make many of the tenants in the home find other rental properties. But would such an increase in rent be tolerated in Michigan?

According to an informational pamphlet released by the MSU College of Law Housing Clinic located in East Lansing, any adjustments made in rent need to follow strict state guidelines and require notice to the tenant by the landlord. A failure to do so could lead to civil litigation down the road. So what are the stipulations for rent increases in our state?

Within 30 days of written notice, and provided there is a clause in the lease agreement, a landlord is allowed to make increases to rent if:

  • Required by federal, state, or local law, rule or regulation;
  • Changes are made to rules relating to the proper meant to protect the health, safety and peaceful enjoyment of the property; and
  • If the raise in rental payments covers additional costs incurred by the landlord due to property taxes, utility costs, and increases to insurance premiums.

In the case mentioned above, California law may not offer the same protection to renters as Michigan law does. As a result, tenants could find themselves in lease disagreements without the protection of the law to back them up--an unfortunate situation for both the tenant and the landlord as well.

Source: The Wall Street Journal, "Bay Area Rally Sends Rents Soaring," Jim Carlton, July 16, 2013

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