What Is Rent Control?

Rent control laws often do more than just limit the amount of rent landlords may charge. Some of these laws also restrict the circumstances under which landlords may terminate month-to-month rental agreements or not renew leases. Rent control laws such as these (also called "rent stabilization" or "maximum rent regulation" laws) are in effect in some states (such as California and Oregon) and some of the country's largest cities, including New York City, Washington, D.C., and Newark.

Rent control laws tend to be extremely complex, and every law is different, making it impossible to describe each in detail. However, many rent control laws contain restrictions, rules and exceptions similar to those addressed below.

Types of Property Subject to Rent Control

Not all rental housing within a rent-controlled area is subject to rent control. Commonly, laws exempt:

• new buildings
• owner-occupied buildings with no more than two to four units, and
• single-family houses, condominiums, and homes in planned unit developments (townhouses); and luxury units that rent for more than a certain amount.

Limits on How Long Rent Control Applies to a Particular Property

Rent control comes in two basic forms. "Vacancy decontrol" protects only the current tenant by ending rent restrictions when the tenant moves out. "Vacancy control" regulates rent over the long term, keeping rent restrictions in place even when a new tenant moves in.

Vacancy Decontrol Statutes: Protecting Current Tenants

In most rent control areas, landlords may raise rent as much as they want when one tenant moves out and a new one moves in. This feature, called "vacancy decontrol" or "vacancy rent ceiling adjustment," means that rent control applies to a particular rental unit only as long as a particular tenant (or tenants) stays there.

When a tenant voluntarily leaves or, in some cities, is evicted for a legal or "just" cause (discussed below), the rental unit is not subject to rent control again until the landlord sets the new (and presumably higher) rent. In short, new tenants in a "vacancy decontrol" city shouldn't expect to pay the same rent as the prior tenant.

In addition to built-in annual increases, most rent control boards allow landlords to petition for a rent hike based on an increase in operating costs, such as higher taxes or expenses due to remodeling or bringing the building up to code. Some laws allow landlords to "bank" annual increases and apply them all at once later.

Vacancy Control Statutes: Protecting Future Tenants

Vacancy control statutes lock in the rent even when a new tenant moves in. The rent board sets a base rent for each rental unit, taking into account factors such as the rent that was charged before rent control took effect, the landlord's operating and maintenance expenses, inflation, and housing supply and demand.

The base rent may be raised during the tenancy under certain circumstances, such as an increase in inflation or an increase in operating costs. When the tenant moves out, even when the move was voluntary or the result of a just cause, the landlord cannot raise the rent to market level. Rent stays controlled, and can be increased only by as much as the rent control law allows.

Evictions in Rent Control Areas

Most tenancies end on their own accord and with little drama: either at the end of a lease or after the landlord has given the proper amount of notice in a month-to-month tenancy. As long as the landlord is not acting with discriminatory or retaliatory motives, the landlord can decide to end the tenancy, no reasons needed.

But for rent control to work—especially when the law allows landlords to increase rent when tenants leave—it should have added restrictions on eviction. Otherwise, landlords could throw out current tenants in order to get a chance to increase the rent. Recognizing this, many local ordinances require landlords to have a "just cause"—that is, a good reason—to evict. Acceptable reasons typically include:

• a tenant's violation of a significant term of the lease or rental agreement—for example, failing to pay rent or allowing unauthorized people to live in the rental unit
• a tenant's engaging in illegal activities on the premises, including drug dealing, causing substantial disturbance to the neighbors, or intentionally damaging the property
• a landlord's desire to move into the rental unit or rent it to an immediate family member, and
• a landlord's desire to substantially remodel the property, which could not be done with people living there.

Landlords who evict tenants without just cause often face stiff civil and even criminal penalties.

Attempts to Evade Just Cause Restrictions

Landlords whose rentals are subject to vacancy decontrol rules will jump at the chance to evict tenants (particularly long-term tenants with below-market rental rates). Sometimes it's easy for a landlord to find a legitimate just reason for the eviction, such as alleging the tenant's recent and unauthorized pet. Lacking a genuine just cause, however, some landlords point to a trivial offense, like a single instance of rent arriving a day late, as their "just cause."

To prevent disingenuous evictions, some rent control ordinances require that the judge hearing the eviction conclude that the landlord's stated reason for eviction was in fact the landlord's "dominant motive." In other words, if the tenant can prove that the landlord's dominant motive for the eviction is a desire to raise the rent (despite the landlord's stated reason that the dominant reason was the tenant's one-day tardiness), the tenant will prevail in court. Convincing the judge that the landlord seeks the eviction in bad faith is no easy task, though, and usually requires the assistance of a skilled attorney who specializes in landlord/tenant law.

Fighting a Bogus "Just Cause" Eviction

If you're facing a just-cause eviction that you believe is actually motivated by the landlord's desire to raise the rent (and you want to save your tenancy), you could disregard the termination notice and prepare to defend against an eviction suit. If you head in this direction, look for an experienced attorney to represent you.

While many issues in landlord-tenant law can reasonably be handled by self-represented tenants (such as disputes over withheld security deposits), eviction lawsuits in rent control jurisdictions are usually not one of them. That's because the stakes are high, particularly in vacancy decontrol situations where the landlord stands to gain a lot of money by re-renting the unit at market rates. You'll almost always be up against an experienced landlord's lawyer on the other side. The court rules for eviction lawsuits are complex and the cases move quickly, often turning on picky points of procedure. It's no place for a novice.

In some areas, such as San Francisco, you can file a complaint against your landlord with the rent board for wrongful eviction. While most rent control boards don't have the power to stop an eviction lawsuit once the landlord has filed it in court, they often have the ability to impose fines for rent control ordinance violations. Landlords who lose in court and before the rent board will lose twice, and gain an unfortunate reputation with the board for not abiding by the rules—a reputation they will regret the next time they're in the spotlight.

Other Protections Provided by Rent Control

Sometimes, rent control laws impose rules that protect tenants, unrelated to rent. Check your law to see whether protections like the following apply to you.

• Rules regarding security deposits. Some rent control rules mandate how landlords hold security deposits. For example, Los Angeles requires landlords to put security deposits in interest-bearing bank accounts. Other laws might require landlords to hold security deposits in separate bank accounts or deposit them in a federally-insured bank.
• Special notice requirements. Most states have laws about how much notice a landlord must give a tenant before raising the rent or terminating the tenancy. For example, many states require landlords to give tenants 30 days' notice before raising the rent. Local rent control laws often contain additional notice requirements. For example, a local rent control law might also require that the notice include information about how the rent control board can verify that the new rental amount is legal.
• Relocation assistance. When landlords terminate a tenancy in order to move themselves in (or give the unit to a specified relative), they might be required to give the departed tenant financial assistance—often thousands of dollars.

Where to Get More Information About Rent Control

Sources of information about rent control where you live might include:

• Your local rent control board. Cities and states with rent control maintain websites with a wealth of information, including the text of the law itself and possibly a summary explaining its main features.
• A local tenants' organization. Virtually every city with a rent control ordinance has at least one active and vocal tenants' group. These watchdogs monitor court decisions and proposed ballot amendments that might affect the ordinance. Most important, the websites of these tenant organizations usually explain the ordinance and how it works, perhaps with a series of FAQ. Some have volunteer staff available to explain ambiguous or complex facets of the ordinance. Some even provide free or low-cost legal services or assistance.
• Local attorneys who specialize in landlord-tenant law. Ask for referrals from a tenants' organization or any legal aid office.