How to Properly Raise Rent: A Guide for Landlords

Rent increases are an unpleasant experience, to put it mildly, but they are an essential component of property management. It guarantees that landlords keep up with inflation, rising market prices, and property costs such as upkeep and maintenance. However, raising your tenant’s monthly bill may come with legal obligations, and breaking the rules could land you in hot water.

In this entry of Eviction Essentials: Your Guide to Landlord-Tenant Law and Courtroom Drama in North Carolina, we'll take landlords through the legal requirements for raising rent, notice periods, allowable increases, and how to deal with tenant pushback while preserving a good landlord-tenant relationship.

1. Understand Your Local and State Laws

Make sure you comply with local and state rules before you even consider increasing your tenant's rent. A few cities and states have rent control regulations that limit how much and how often rent can be raised. In North Carolina however, rent control is prohibited at both the state and local level. This means:

No rent price limits: Landlords have the freedom to charge whatever the market supports and dictates. But, keep it ethical.

No rent increase caps: No restrictions on how much rent can be raised.

No local rent regulation: Counties and cities are prohibited from implementing their own rent control laws.

2. When and How Can a Landlord Raise Rent?

Fixed-Term Leases vs. Month-to-Month Agreements

• Fixed-Term Lease: Unless the lease expressly permits it, landlords are not permitted to increase rent in the middle of a lease, and any increase must take effect when the lease is renewed.

• Month-to-Month Tenancy: Although North Carolina law does not define a specific timeline, a landlord is entitled to raise rent rates as long as they give adequate notice, usually 30 days in advance.

Lease Agreement Requirements for Rent Increases

If your lease agreement does not include a clause allowing rent increases during the lease term, you must have tenants execute a new lease or sign a lease amendment before the rent increase takes effect.

• New Lease Agreement: If the current lease has expired or is about to expire, the tenant must sign a new lease that reflects the updated rental rate.

• Lease Amendment: If you and the tenant agree to a rent increase before the lease ends, you can draft a simple lease amendment stating the new rental amount and effective date.

• Without Tenant Agreement: If the tenant refuses to sign a new lease or amendment, the rent increase cannot be enforced until their current lease term ends.

Ensuring your lease includes language about potential rent increases can help prevent disputes and give landlords more flexibility in adjusting rental rates.

Notice Requirements

North Carolina doesn’t impose a statewide notice requirement for rent increases, but it’s always a safe bet to follow standard industry best practices:

• 30-day Notice: Used for month-to-month leases.

• 45 to 60-day Notice: Some landlords provide extra time to encourage tenant retention and smooth transitions.

Although it is not legally required in North Carolina, providing a written rent increase notice helps avoid disputes and misunderstandings.

Rent Increase Notice Format A proper written notice should include the following:

1. Tenant’s Name and Address

2. Current Rent Amount 

3. New Rent Amount

4. Effective Date of Increase

5. Reason for Increase (Optional, but Recommended)
6. Landlord Contact Information

3. How Much Can a Landlord Raise Rent?

As previously stated,  there are no legal restrictions on rent increases in North Carolina. However, landlords should consider:

• Market conditions – Research the rental rates around your area to ensure your increase aligns with local trends.

• Tenant retention – An increase of between 3-5% is within a reasonable range and has a greater chance of being accepted. A sudden and steep increase is highly likely to cause conflicts and may push tenants to leave.

• Operating costs – Factor in property taxes, maintenance, and inflation if you are considering a rent adjustment.

4. Dealing With Tenant Pushback

Tenants resisting a rent increase should be expected. I mean, wouldn’t you react the same way if you were in their shoes? So keep it ethical and fair. If objections are raised, here’s how to handle it  professionally:

• Transparency: Explain the reason/s why the rent is being increased (rising property taxes, maintenance costs, or market trends).

• Negotiate: If your tenant disagrees at first, they may agree to a smaller increase in exchange for signing a longer lease.

• Highlight your Property’s Value: Have you made any upgrades or improvements to your rental? Emphasize how these add value to the property.

• Incentives: Think about keeping rent lower for your loyal long-term tenants. Or, offer incentives for tenants who consistently pay on time.

5. What to Do If your Tenant Refuses to Pay the increase

1. Discuss their concerns, talk about their issues, and try to come to an agreement.

2. Remind them of their lease conditions and their obligation to pay the agreed-upon rent after the notice period.

1. If they decide not to renew under the revised terms of the lease, a notice of lease termination will be required.

6. Final Thoughts

Raising rent is an essential part of property management, but to prevent unwanted conflicts, the increase should be lawful, reasonable, and fair. By understanding state laws, giving proper notice, and maintaining open communication, a North Carolina landlord can adjust rent while keeping good tenants in place.

Are you a landlord or property manager that needs help with an eviction? You can call us at +1 980-263-9926, send an email to george@gibbsglaw.com, message us on Facebook, or reach out through our Website, and book a free 30-minute consultation, today!