Money Rehab with Nicole Lapin - “My Landlord Is Trying To Raise My Rent. What Should I Do?” (Listener Intervention)

Episode Date: October 8, 2021

In today’s Listener Intervention, Nicole chats with a Money Rehabber whose landlord is looking to raise her rent big time. What’s her next move? Listen to find out! Learn more about your ad-choices at https://www.iheartpodcastnetwork.comSee omnystudio.com/listener for privacy information.

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Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. Negotiating with your potential landlord while your apartment hunting is tough.

We all know this. But it's a whole other beast to try to negotiate with your actual landlord if, God forbid, he or she tries to raise your rent. Today's listener intervention is with money rehabber Kim, who has found herself in that exact situation. Kim, welcome to Money Rehab. Thank you. I'm such a big fan. You are turning my life around just one episode at a time. Thank you so much. It's my pleasure. Thank you so much for telling me. Those are words that get me up in the morning. Tell me what's going on.

Okay. So I just got a notice from my landlord. I've been in the same apartment for about seven years. And fast forward, the rent has never increased, but everything's extra. So there's the rent and then there's water on top of it. And then we have to pay a heating bill from September through March, which is $400 a month. Con Ed is on me, everything else. And there's not a lot of repairs that are happening here. So there are not a lot of repairs that are happening here. So anyway, he sent me an email in the middle of August, just saying that he was really sad to report

that he's going to have to raise my rent by $400 a month. And I just thought that that was a little high. It is high. Absolutely. So can you read me the email? So dear Kim, when you first started renting from me in 2014, I told you that I would do my best to keep your monthly rent low. And I believe I have done so. In seven years, I've not increased your rent. During that time, my property taxes have increased significantly. In addition,

I've made improvements to the building without increasing anyone's rent, including replacing the oil boiler and the hot water heater to the building, painting the common areas, and several plumbing issues. I had intended to have this discussion with you several years ago, but when the COVID-19 pandemic hit us, I put the subject on hold. Today, I am unable to keep enough funds and savings to cover any large projects. For example, prepaying for the winter's oil costs me $6,000 in September, and the only benefit is that it keeps your payments lower, but it takes until May to be reimbursed. These are funds that I could use on other projects, such as the gutter work and leaking heating pipes. The rental apartments in Pelham are almost non-existent and those available are ridiculously expensive. I don't want to lose you as a tenant, but I need to increase your rent. After much discussion with my family, I've chosen to increase your monthly rent to $3,200 starting

as of October 1st, 2021. I will be attaching a lease extension to that effect. Please print out and sign two copies of the lease extension, then return them to me. I will sign both copies and return one to you. If you have any other questions, please don't hesitate to call me. Regards. And when was that sent? So that was sent August 20th, 2021. Okay. So technically that's 30 days notice, which is one of the requirements for what happens when landlords give you a notice for a rent increase. There are different standards across different locations, of course, but one pretty common

one that should stand in your case is that you have to get a physical letter. case is that you have to get a physical letter. They can follow up with an email. But if you didn't get a physical letter, that's technically an illegal notice. You didn't have anything in the mail? No. Yeah. I mean, listen, I'm not a lawyer. And that brings me to my other question. How much do you want to stay at this place between us girls and how much can you actually spend? Right. And that's a really good question. What I pay is $2,800 a month just flat for a three bedroom apartment. And in Pelham, I would have to say it's a pretty fair price. I would say the other apartments that are three bedrooms probably go for about that, maybe $3,000. apartments that are three bedrooms probably go for about that, maybe $3,000. I could go up to $3,000 with all of the additional costs on top. Now, I have twins who just graduated from high

school. So they're both in college. And one of them is living at home. One of them's not at home. So do I need a three-bedroom apartment? No. Would it be nice to have this just, you know, for another year or so since I work here, we live here, the kids know this, they think of this as home. So I'm flexible as far a lawyer to actually fight, that's also expensive. So we think it's a balance between those expenses and what we're going to propose back to him. Have you chatted with anybody else in the building? I have. It's a three-family house. So there are three of us, three families who live here and the people who live directly above me, I saw, and they received the same email and they didn't even get as far as I did, you know, figuring out what the email was about. They were away for most of the summer. And then the people who live on the third floor, I have not been able to reach yet, but I would imagine that they've been given the same letter, the same

email, the same email, I should say. So the people upstairs have decided to wait to see what I'm going to do before they reach out to the landlord. Okay. And what do they want? You know, I think we're all on the same page that we understand it's been seven years since he's raised the rent. Does he deserve to make a little bit more money? Sure. But $400 a month, it's just it just seems to be outrageous to me. And I wonder if he's throwing this out there as, you know, a softball, you know, to just say, let's throw this out here and see what happens, see what's going to stick. What are you going to come back with? So, so I, yeah, I really wanted to get your tips with how I could work this, how I might be able to negotiate this so that I can

stay. Okay. So that's really what I wanted to reverse engineer. What do you ultimately want and how can we get you there? Because if you want to leave, that's a different story. If you're like, okay, it's not ideal ever to move within the top three most stressful things anyone does. And so let's just try to get the best deal possible. My biggest suggestion is going to be whatever we discussed today, talk with or I'm happy to talk with to some of the other tenants because banding together is going to be a really good option if you guys think this is unfair. There's more power in numbers for this. This guy, right, we have to think about what he wants. He doesn't want to be out of all the

rent, right? And what is the best time to find a renter? Do you know? No, no. But I would imagine, to find a renter? Do you know? No, no. But I would imagine, you know, Ida just hit. So a lot of people are displaced right now. And that's another wrinkle. And nothing happened here to our specific apartment building, but all around us, you know, was pretty decimated. Yeah, no, that's another variable for sure. But typically, it is the best time to find a new renter in the summer. So he has missed that window. And I think he knows that. I looked at some of the other apartments that are available. There actually happen to be a lot of apartments, one, two, and three-bedroom apartments in your area, which is also good for you to mention and talk about the comps of the area. apartments, one, two, and three bedroom apartments in your area, which is also good for you to mention and talk about the comps of the area. Because, right, we want to appeal to what's

going to work for both of you. For him, he doesn't want to lose a tenant. He also doesn't want a crappy tenant. I'm assuming you've been a great tenant. You pay your bills on time. You don't cause havoc, no wild parties, ragers, whatever. Right. And he doesn't pay for anything. I mean, the fact that he brought up like the, you know, the water, you know, whatever he brought up the water. Oh, yeah. The oil boiler and the hot water heater is is shocking because he doesn't pay for anything. I mean, I've had this place painted. Anytime the dishwasher breaks down, I have it fixed. Oh, really?

Yeah. He doesn't do anything. He doesn't do anything. Have you asked him to fix those things and he hasn't? You know, there've been times when I had somebody come to fix the dishwasher and then I've backed it out of my rent and sent him, I'd let him know what was happening ahead of time. I told him that I was going to make a couple of phone calls to see if it's something that we can fix so that I don't have to get another dishwasher. And then he would say, okay, so whatever it is, just back it out, take it out of the rent. So I would send him the receipt and then I would back it out of the rent. And then I would hear, well, what are you spending this for? This

isn't part of your lease. And this isn't, you know, I'm going to have to reread the lease because I don't think that I'm responsible for that. Now, has he gone after me for that? No, no, he doesn't. Here's my suggestion. You have a couple of different levers that you can pull. You can sign a longer term lease at your current rent because that then, if you think of his perspective, gives him more security in knowing somebody is going to be there for a long time. Turning an apartment over is expensive. They have to punch the unit. They have to list it. Also, the devil they don't know could be worse as far as the tenant goes. So whatever you do, make sure you also really emphasize that you have been a good tenant because landlords do prefer well-behaved tenants and tenants that actually pay their bills because that is a whole other issue.

And you want to remind him that he has a pretty good there. find him and he has a pretty good there. So the other option is sign a new lease for a shorter period to try and tell him that the apartment can become available at the best time to get a new renter, which is the summer. So we're at the end of the summer now. Your lease ends in October or he wants the rent increase to go up in October? October. Yeah. But how long is the whole lease? You know, it doesn't really, it's been month to month as long as I've been here. I mean, the first, the original one was 10 months. Seven years ago? And he has not raised the rent. But as I said, everything is extra. Everything is, you know, okay, so plus $400 dollars for this month, plus two hundred and fifty dollars for this month.

So so, yeah. OK, but I'm loving this. You know, I've been a really good renter, really good tenant. Yeah. So say that regardless. So also come up with a plan altogether, I think, with your fellow tenants. It's not a big building. Losing all of you would be devastating to him. It sounds like you're all really reasonable. And he doesn't seem completely off his rocker. So he's probably reasonable, too, if you approach it in the right way. And it sounds like to me, is everybody's rent the same?

Unclear. Unclear, unclear. I've been very open about, you know, what we pay here with upstairs, but they've been here longer. They've been here about 12 years. So, so they, they may have a better, a little bit of a better deal. I'm not sure. And then the third, the people who live on the third floor, it's a two bedroom and it's a runway. So it's a very different, they don't have a fireplace like we do or a backyard, you know, they don't have anything like that. So I would imagine theirs is a little bit lower, but I'm sure that they would not want to spend $400 more a month either. Hold on to your wallets, boys and girls. Money rehab will be right back. Now for some more money rehab. So I think you guys all want to get on the same page with how

much you would feel comfortable paying more as a percentage and then try to essentially unionize together to get that as the increase for the entire building. So the other suggestion is to offer to accept the new terms, but ask for other things like, you know, I don't know your specific scenario, but anyone else listening who might be in a similar position, some could be like a free parking spot or a free storage space. Or if you live in a building with a gym, you could ask for that. You could ask for things that make your life easier, like getting on an online portal to pay rent. You could ask for better security. You could ask for updated fixtures. You could ask for a deep cleaning of the unit. You could ask for deep cleaning of the common areas. So there are a lot of things that can make your life easier that have monetary value that could actually justify a higher rent. So I would say those are your options. You want to think about

what the percentage of money you want to spend as an increase, you're going to have an increase. If you're going to stay here, you're going to have an increase. We just have to figure out the best one for you. I think it's actually quite reasonable that your rent hasn't gone up in seven years. And so I'm not fully offended by his letter. I think that you don't want to go out of the gate with all of your ammo. So the idea that he has to write a written letter is something that you want to keep in your back pocket, for instance. That's technically not how you notify people. And it could actually reset the clock if he's like, OK, then you got an extra cushion of

time. But it sounds like you don't want an extra cushion of time. You just want to stay there and you want to pay $3,000, I'd say. And have some other creature comforts. Because, you know, honestly, the average one bedroom increased 2% in 2020. So the fact that you've dodged an increase is actually quite good, to be real. Listen, I'm always on your side, duh. But I just want to get the best deal and approach him in the best way possible that also

hears some of his concerns. So I would really think between you and your fellow tenants, to whatever extent you guys can collaborate, figure out the length of lease that you would want to sign. The longer for the owner, the better because they have more security. Or allow the lease to stop before the summer. So you can know that, as you know, summer is the best time to get a new renter. So I'm doing this as a concession for you. to get a new renter. So I'm doing this as a concession for you. And then that also shows that you're knowledgeable about the renting market and you get taken more seriously in that sense. I'm assuming that the other tenants are going to feel the same way. If not, you can go at this on your own, but I think there's power in numbers here. So I would go back first saying that you all understand that there's some

increase that needs to happen, but are 100% uncomfortable with the amount that he's proposing and that it's a no-go for you guys to increase so suddenly by that percentage, that you're reasonable and you have been great tenants and you've kept up with the maintenance issues even when he hasn't and taken the initiative for other landlord type responsibilities that he has, whatever else that you've done to make his life easier. You could say we're only comfortable with a 5% increase or whatever you guys decide to come up with collectively. And also, as part of this renewal, we want to, you know, extend for two years or three years, which will give you certainty during these uncertain times and take the pressure off you finding another tenant, which can be

costly and, you know, an unknown as to whether or not they're going to act as the great tenants we are. And then I would see what he comes back with. How does that sound? Yeah, no, I never would have thought to have done this before. So thank you. Thank you. Thank you so much for this. to have done this before. So thank you. Thank you. Thank you so much for this. For today's tip, you can take straight to the bank. If your landlord tries to jack up your rent, your neighbors are going to be your best allies. There's only one landlord, but there are many, many in some cases, tenants, and there will always be strength in numbers. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki

Etor and Will Pearson. Our mascots are Penny and Mimsy. Huge thanks to OG Money Rehab team Michelle Lanz for her development work, Catherine Law for her production and writing magic, and Brandon Dickert for his editing, engineering, and sound design. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.