Is there a law against the amount that a landlord is allowed to raise your rent for a commercial property?
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Is there a law against the amount that a landlord is allowed to raise your rent for a commercial property?
We renovated an entire suite wanting to stay for a few years. I just opened a small business. Our lease says “Unless notified otherwise, there will be a 4% increase with rent at the time of renewal”. When I asked the woman jokingly, “Does this mean it can be 4% or 80%? She laughed and said “No, it will either be nothing or up to 4%”. My lease is currently up for renewal and they are now trying to raise the rent by almost 50%. Are they legally allowed to do this?
Asked on June 30, 2015 under Real Estate Law, Virginia
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
The law generally puts no limit on what a commercial landlord may charge a tenant, or what the rent can be increased by--it is purely up to negotiation between what are presumed to be sophisticated business entities. However, a limitation in a lease on subsequent increases *is* enforceable, since a lease is a contract, and as with any contract, whatever the parties agreed to, assuming it is not intrinsically illegal, will be enforced by the courts. However, the language you quote does not in fact seem to limit the increase to 4%; rather, it indicates that the rent increase will be 4% as a default unless the landlord says otherwise. However, the langauge does not cap what the "otherwise" could be, so based on what you have quoted, the landlord could inform you of a 50% increase and that would be legal, unfortunately.
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