Can a New Owner Increase Your Rent After the Building Owner Dies?
UPDATED: July 31, 2013
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It’s a general principal of the law that someone can only transfer, by any mechanism, including through inheritance, whether by will or by intestate succession, the rights that he or she had. No one can transfer rights that they don’t have.
What does this mean in the context of a lease and rental? If someone acquires, whether by inheritance or purchase, a building with tenants, that person is bound by any existing leases. As a result, the person inheriting the building cannot change any terms or conditions of the lease, including the rent, in the middle of a lease term. (The person inherits the building subject to any obligations on it—i.e. the person can only inherit what the person from whom they inherited had to leave them, which in this case was a building with tenants, those tenants having certain rights, which are delineated by their leases.)
Once a lease is up, a new owner does not have to offer to rent on the same terms—just as the previous owner did not have to keep offering to renew a lease on the same terms. He or she is free to propose new terms, including raising the rent—and the proposed increase can be dramatic. This is particularly significant if you did not have a written lease. Without a written lease, you would be a month to month tenant. That means that each lease “term” is only one month long, and so with 30 days (or one month’s) notice, the landlord could change the terms, including the rent. If you didn’t want to pay the new rent amount, your only option would be to leave.
The critical issue will therefore be whether there is a lease or not; and if there is a lease, when is the lease term up. Once the current lease, whether written or oral (often called a “verbal” lease, though oral is the better term) is up, all bets are off and the new owner may change the terms or increase the rent. This means that, as a practical matter, if your lease term is coming up and you already know the new owner wants to raise the rent more than you’re comfortable with, it’s not too early to start looking for a new place to live.