Raising Rent - How Much
Question
We have a yechida in Beit Shemesh that we rent out. It is nicer than most, having a separate kitchen, normal sized bedroom, a nice salon and a very nice ambatya. It also has a good sized private chatzer for a sukka or for sitting. Our current lease is about to run out. We have been taking 3,200nis per month which is well under the going market price. Our upstairs neighbor has the same yechida, built with us at the same time, but does not have a chatzer. A year ago they brought in a new socher and received 3,400nis per month. We were not aware that they got that amount when we signed with our socher at 3,200 or we would have raised the price. That was the second year for this socher. The neighbor just brought in a new socher and is now getting 4,500nis. We told our socher that we would like 4,200 for the next year, which is still well under the going price. The socher came to me and said it is not proper to ask for such a large raise in rent at one time. He thought maybe up to 400nis is normal. They are willing to go up to 3,700nis. This will be their third year here. They are good sochrim, he works and they have always paid every month on time. They just had their first child. I don’t know if there is a halachic issue here as to how much one may raise the rent. We are not looking to squeeze out every last shekel, we are satisfied with being a bit under the market price. But there is a huge difference between what they are paying now and what the real market value is. I am certain we could easily get 4,700nis. I’m looking for an eitza how to handle this properly in a way that is fair for both sides. Thanks very much.
Answer
Shalom!
Thank you for your question.
The Talmud tells us, "Rav Huna said, but if he wants to raise the rent, he may" which is explained to mean that the price of rent may be raised...“when the price of housing rises."
It is important to read the contract signed with the tenant since it may be written that the tenant has an option to stay at this rate etc. if however there is no agreement of this kind and it is now the end of the year then you are free to ask what you want, since it is considered as a new lease agreement.
Of course, it may be in your interest to be considerate with your current tenants in order that they stay. Having good tenants is also worth money!
Bava Metzia 101b; CM 312