This blog explains how to raise the rent on a Section 8 tenant. Perfect for Landlords who own a rental property and have a Section 8 tenant but don’t know how to raise the rent.
My Story
I am a real estate agent in Huntington Beach, California AND I am also a Landlord. I manage my own properties. AND I have a Section 8 tenant in my rental property AND my tenants lease will be expiring soon. My tenants rent is well below the fair market rents. My tenant is paying, or should I say, Section 8 is paying well below the standard.
Last year, I missed the opportunity to raise the rent because I was not prepared. This year I am prepared. I did the homework and have decided to share my experience with you on exactly how I did it.
Section 8 Tenants
The U.S. Department of Housing and Urban Development (HUD) provides rental assistance to those potential tenants who qualify. They have a Housing Choice Voucher Program. This program is commonly called Section 8.
Raising the rent on a Section 8 tenant is similar to raising the rent on a tenant who does not get Section 8. There is just one extra step.
Keep in mind that when you do a rent increase in California you will need to give your tenant an advanced notice of 60 days if the rent increase is less than 10% of the current amount. If the rent increase is more than 10% of the current amount then the tenant will require a 90 day notice in writing.
How To Raise The Rent On A Section 8 Tenant
STEP 1 – Call the tenant. Let them know their lease will be expiring soon. Ask the tenant if they want to stay in the property for another year? Let them know the reason you are contacting them is because you will be raising the rent.
STEP 2 – Call the Housing Authority. Each county has their own office, so make sure you call the correct location. You want to call the office in the county where your property is located. You will need to ask for the Housing Representative that is handling your case. Let them know you are a landlord and why you are calling so they can make a note on the file ahead of time and work with you during this process to raise the rent.
STEP 3 – Fill out a Notice Of Change In Terms Of Tenancy. Pay special attention that you have an updated copy of this form because the rules/laws seem to change frequently. This form gives you 4 options when raising the rent (see featured image). In California tenants are protected by The Tenant Protection Act of 2019, aka AB 1482. In addition, if you raise the rent more than 5%, like the form says, then you need to abide by the Tenant Protection Act Civil Code 1947.12 (g).
STEP 4 – Mail the Notice Of Change In Terms Of Tenancy to the tenant. Keep in mind if you are increasing the rent less than 10% you will need to serve this with 60 days advanced notice AND if you are increasing the rent more than 10% you will need to serve this with a 90 day advanced notice. ALSO, mail a copy of the NOTICE OF CHANGE IN TERMS OF TENANCY to the Housing Authority. (This is that one extra step I was referring to)
IF YOU DON’T FOLLOW THESE TIMEFRAMES THE HOUSING AUTHORITY MAY NOT APPROVE YOUR REQUEST TO RAISE THE RENT ON YOUR SECTION 8 TENANT.
STEP 5 – The Housing Authority will process the change to raise the rent and then send out their paperwork to the tenant for review and signatures.
STEP 6 – You and the tenant review and sign the Housing Authorities paperwork.
STEP 7 – You and the tenant review and sign your landlord lease.
Real Estate Services
My name is Zeb Plante and I work for Cal Direct Realty. Are you interested in buying a rental property? Do you have a property to sale? I would like to offer my professional services to you. I am experienced in 1031 exchanges, divorce sales, probate sales and multi-family. In California, I am familiar with the following areas: Orange County, Los Angeles County, Riverside County and San Diego County.
