“Is this legal?”

legal
Photo by PoPville flickr user Mr.TinDC

“Dear PoPville,

I have an issue I’d like to get some feedback on. I live in a not-to-be-named large building at 14th and Newton run by a not-to-be-named large property management company. I just reached the end of my 12-month lease at the end of December, and I opted to go month to month. The management company is charging me $250/month to go month to month. The fee would be waived if I signed a lease. Is this legal?”

25 Comment

  • Yes unless the unit is under rent control.

    • This is the absolute definitive answer. And if your building is a big new-ish building, it is not rent controlled.

      • You could try to get out of it for a while if they didn’t give you proper notice of the change at the end of your lease, but it sounds like this person did get notice.

      • If this is the building I am thinking of it’s The Allegro so yes it’s newer. Is this like sign the lease at the existing rent or we’ll raise the rent by $250? Or is it an actual fee?

        • When I renewed there, they offered me a new lease with a reasonable increase in rent, or I could go month-to-month but the rent would be $250 higher than that. And when they gave me two month free at the start, it was really 2 free months, like I didn’t pay, rather than an amortized discount.

    • Accountering

      So, not necessarily illegal, even if under rent control – see below. There is a sneaky work-around that the larger older buildings run by big companies use upon the initial lease.

    • Yes, generally after your lease is up and you go month to month there is an additional rent due each month. This is because allowing you month to month is a courtesy because you’re not locked in and the apartment management has no clue how long you will stay. Mine was $150 additional each month at my first building here and the one I’m in now I believe is around ~$200 additional each month.

      • @Idaho – it’s not as a courtesy, it’s DC law. All one year leases devolve to month to month unless the tenant chooses to sign a new lease. It’s one of the renters rights here.

        • Correct. It is not a courtesy, it’s a right. But it’s not a right to have your rent not change. There are limits to how high a step increase can be, but “renew for a year or face a reasonably higher rent” is a legal and fair strategy for keeping properties under a predictable lease schedule.

  • Alas, to the best of my knowledge this is legal. Most leases have clauses that outline potential rent increases if going month to month.

  • Accountering

    The other thing thats very likely is that when you signed, you got two months free or something similar. You signed a lease for $3000/month, but with one month free they amortized that and charged you $2750/month for 12 months. They will offer you the same deal if you sign a lease, but month to month reverts to $3000/month. This is how even units under rent control get around it.

    • Downside of big bldg for sure

    • Which was strange when we signed our big bld lease. They refused to amortize the 2 free months and our first two months were completely free followed by the full amount. I assume if we break the lease we would owe the rest….

    • Yep, this happened to me in 2010 . Not the month-to-month thing, but they wanted to increase my rent based on the “actual” amount I was “paying” in monthly rent. Generally, my experience renting has been that honest single landlord > mgmt. company in old building > mgmt. company in new building. The new buildings are by far the easiest and most common to get screwed in.

  • Yep, this is how it works-it always costs more to rent for less time. When you go month-to-month, you’re only guaranteeing a landlord a month of security at a time rather than a year. Happens to just about everyone-not just in large buildings! I rent a condo and I had the choice last year to renew for a year at a 3% rent increase or go month-to-month at a 6% increase.

    • By comparison, I’m now in Arlington (hence screenname) After two years at my apartment, I had to go month to month for a little bit. My monthly rent jumped up from $1955 to $3650! All legal.

      (and yes I’m out of there now)

      • Dang!!! I have never heard of someone’s rent more than doubling-yikes!

      • Yeah going month-to-month in Arlington is an AWFUL decision. Had the same thing happen to me. It’s insane.

        • It sucked, but I really had no choice. I had a house under construction that got delayed, so I couldn’t move in when my lease expired. It didn’t make sense to look for another cheaper apartment, as I only needed a few weeks more, and didn’t want to move twice. I debated renewing for another year and then trying to sublet for the balance of the year, but decided that I’d rather just pay the higher rent for a little bit and then be done.

  • justinbc

    Have you looked at your original lease? It likely answers this for you.

  • orderedchaos

    Unless your lease specifically prohibits it, this charge sounds completely legal. In fact it’s quite common—you’re trading off flexibility for cash, while the landlord is receiving higher compensation for foregoing the guarantee of a year-long renter.

  • Find out what the penalty for breaking lease is. May be severe enough to outweigh re-upping for full year (ie 60 days plus multiple mo. rent), in which case additional rent not so bad. You’re buying flexibility.

    If you renew lease but still anticipate needing an out, be upfront with building if/when your plans change. You may be on the hook but they may have others interested in leasing your unit. Find out terms of subletting or any costs you’d be expected to bear if you need to get out of the lease (ie advertising, potential lost revenue). If it sounds too hellish eat the m-m increase and enjoy the flexibility.

  • Read your original leases carefully. As a way to discourage month-to-month leases after an initial lease term ends, and / or as a way to avoid rent control, original leases are often structured as a much higher monthly rental, offset by a “rebate” and / or a “promotion” that gives a credit every month. So, you may actually be paying $2,000 a month, but the real rent is $2,500 a month with a $200 “lease credit” and a $300 “rent rebate” each month. By not renewing the lease, your “lease credit” expires, which makes your month-to-month rate legally higher. Similarly, if they were to decide to raise all of the rents as leases renew in a certain year, getting rid of that “rent rebate” doesn’t count as an increase (technically, it’s just getting rid of a rebate – so your actual rent stays the same even though your effective rent goes up), so rent control rules don’t apply. This is very, very common among some of the bigger landlords / developers in the city, and it’s an end-run around the protections for renters. Write your councilmember if you want them to close this loophole.

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