Month to month tenancy; rent increases (apartments, good, supply)

[rjrcm]

Originally Posted by STT Resident

... I disagree that you need a letter from a lawyer to prove the point to your LL.

Respond to the letter in writing, ...

That's all well and good, but if the landlord is already ignoring the law, do you really think a letter from the tenant is going to make a difference? I hope it does and all works out. However, a letter from a lawyer will carry more weight with the implied (or explicit) threat of legal action.

There may also be other issues involved not detailed here that a lawyer can review and take into consideration.

[STT Resident]

Originally Posted by rjrcm

That's all well and good, but if the landlord is already ignoring the law, do you really think a letter from the tenant is going to make a difference? I hope it does and all works out. However, a letter from a lawyer will carry more weight with the implied (or explicit) threat of legal action.

There may also be other issues involved not detailed here that a lawyer can review and take into consideration.

Actually yes, I do, and this is from first hand experience several times over. Of course there are those times when the intervention of an attorney is necessary but there is no point in spending money without first trying to settle the matter for the price of a stamp.

[nightnurse613]

I would agree that having a lawyer's advice is always a good idea however; (a) sometimes you have to pay for that advise and (2) sometimes that advise is worth what you pay for it. I liked the short and sweet approach however, I would also recommend that you take pictures when you do the walk thru inspection (and have your own witness present). Some landlords can get vindictive when return of deposits are required...

[AZJ0SH]

They can ask whatever that want on month-to-month, even though you claimed they dropped the ball, it was your responsibility to ensure you were signed into a new lease if you wanted to keep your old rent rate.

I have never seen or heard of an apartment that doesn't increase rent when going month-to-month.

[ji603]

Originally Posted by AZJ0SH

They can ask whatever that want on month-to-month, even though you claimed they dropped the ball, it was your responsibility to ensure you were signed into a new lease if you wanted to keep your old rent rate.

I have never seen or heard of an apartment that doesn't increase rent when going month-to-month.

That's not the issue here.

OP's concerned that the notice given doesn't comply with AZ landlord tenant requirements that a change in terms be given with 30 days notice to the lessee.

STT and Dura have it right OP - I'd do exactly as they say and lay it out in a letter to the landlord. Wouldn't hurt to enclose a copy of the relevant AZ Landlord Tenant act language - already provided by CD posters.

Good luck - update your thread when you figure out what's up.

[nightnurse613]

Yes, the landlord can (and usually does) ask for increased rent for MTM leases- the same for most short term lease agreements- (although, if it's just a continuation and the tenant has been meeting the terms of the original lease; there's really no imperative to do so) but it's the landlord's responsibility to put it in writing and get the lessee to acknowledge (or take steps to terminate the lease). In the absence of a proper notification there is no change in the lease; it just converts to a month to month tenancy.

[Chuck-ELP]

Thanks for your replies.
I did contact an attorney.
He said the same thing as STT Resident, which is that when a lease ends, if there is no new lease entered into (signed by both parties), then the tenancy continues on a month-to-month basis under old terms until proper legal notice is given.
In Arizona, that means either party has to give 30 days' notice before the next rent payment date of any changes to tenancy (move outs, rent increases).
Landlords can't "do what they want" because you have no lease. For this month, I paid the previous rent, and there have been no questions asked and no actions taken against me, so I think they realized they were in the wrong also.
In fact, they've asked me to stay, and have offered to lower my rent 5%. Problem is, I want no, or a short-term lease (3 mos max). And they refuse to do that. They want those long leases (minimum 14 mos). I have seen many people moving out of here recently. When will businesses stop doing things that are contrary to their interests?

[S. Chris Webb]

It is not in a landlord's best interest to sign a short-term lease when they could get you to sign a long-term one. There are several costs involved between tenants, including making the unit rent-ready, advertising, vacancy, property management & leasing fees. So they take their gamble on you either signing a longer lease, allowing you to stay month-month at a higher price, or you move out and they find someone else to fill a long-term lease.

[nightnurse613]

And, as you said, is it better to keep a (good, rent paying) tenant for an indefinite period of time or to roll the dice? With the real estate market the way it is, I think a bird in the hand....

[Chuck-ELP]

If real estate has taught me anything, it is that it is based on pie-in-the-sky greed, incomprehension of the demand (buyer, renter) side of the equation, and illogical nonsense. Stick with me, I'll explain thoroughly.

In my large complex, most of the expenses such as maintenance (including turnover) and marketing are fixed costs - they are the same month to month, and the total number of vacancies does not affect these amounts much if any.

The management lost their gamble that I would stay. I was very clear with them: 3 month max lease length at current rent or I'm out. They offered to lower my rent 10% (curious) but they would not budge on the lease issue (more curious). If they were able to afford me to stay there for the past 18 months under current terms, they could, in this soft market, permit me to stay another 18 under those same terms.

I am nearly moved out of the apartment, and will be done this weekend. When I'm gone, 4 of 12 apartments on my floor will be empty. Doesn't sound like the management company is winning this gamble, does it? With that sort of vacancy rate, it does seem it would have been better for them to allow me to continue my residency without a lease. [As an aside, the management told me my unit was vacant 2 months before I moved into it.]

Moreover, the month-to-month rates they are quoting are ridiculous, about 60% to 70% higher than lease rates. There are no increased expenses in having a good month-to-month tenant over a tenant who is locked into a lease. These much higher rates - nearly the price of a hotel room - are simply punitive. They don't encourage people to sign a lease so much as they discourage people from staying. And that's what happens at my downtown location - young urban professionals stay only until they find something better and/or cheaper, then they leave, so there's lots of turnover.

Basically what I'm saying here is that higher month-to-month lease rates do lead to more turnover and more expenses for the management company. It's not in their best interest. They call these higher rents "market rent," but in doing so they overlook an important part of any market: The market is comprised of sellers AND buyers, and the fair market rent needs to be what renters are willing to pay, not only whatever ridiculous prices landlords demand. And some of these prices are simply unaffordable for the majority of otherwise qualified potential tenants.

And recently, a friend reports that his friend, in another complex in another part of Phoenix, has experienced the same thing I did - sign a new long lease or get out. And guess what? - he's moving out. This leads me to the question, "Why the obsession with long leases?" I believe I have an answer, and it has nothing to do with lowering expenses or anything that S. Chris Webb, Real Estate Agent, said.

It has to do with positioning your property to look good in the sales/investment markets, and with management companies making the numbers look good to their owner overlords. They are going for a good long-term receivables number, the amount of rent they can expect to collect over the next several months to a year. No doubt in some banker's world, this statistic increases the value of the property. Month-to-month renters don't contribute to this statistic, so they are discouraged.

There may be another, darker reason for this lease condition that I'm sad to even mention. The new lease I refused includes provisions for automatic "fines" for breaking the lease, on the order of the remaining lease months, + $3000, + "collection costs and attorney's fees."

Another reason I won't sign such a lease is that the economy is very unstable, as anybody who has a job knows. I'm not about to sign a lease like this, basically a blank check, that, were I to lose my job, could end up costing me the amount of a new car in lease charges, punitive charges and fees. It's shameful that this sort of thing is permitted. Given how craven many people in real estate have proven themselves to be in recent years, I would not be surprised if the management company is gambling on the possibility that I will become unemployed and broke, which would then permit them to cash in on my misfortune for a ton of money. A lease provision like this would financially ruin anybody who lost their job, given AZ's max UI rate of $240/week.

Finally, I've got to comment on this silly blurb I saw on channel 3 news on Wednesday. They were saying there's a rental shortage in Phoenix. Oh no! A rental shortage! Everybody's being foreclosed on so they are moving into apartments! Rents will skyrocket! Hurry and get yours now at any price! They interviewed an unidentified real estate agent who parroted these same talking points but provided no useful or verifiable stats.

And again, reality check: Every place I've gone to has vacancies. Of the properties where jaded leasing agents were willing to divulge vacancy rates to me - all in Central Phoenix - one had a 25% vacancy rate, a second about 33%, and the last said they were hovering around 50% vacancy. These were all pleasant acceptable properties to the typical renter (like me).

An interesting new trend in the local rental market is an increase in the number of no-lease apartment complexes popping up. Contrary to RE Agent Chris, not having leases probably decreases costs, especially costs related to enforcing leases, broken leases, bitter tenants tearing things up, etc. It also lowers social costs - the costs of court hearings and the side effects of bad credit on the economy. And given the disastrous social costs our burst real estate bubble has wrought upon us all, it's sad that people in real estate don't look at all the effects of their decisions more.

People are doubling up like never before, and they are moving out of Arizona. Phoenix doesn't have enough decent paying jobs, and those decent paying jobs pay less than comparable jobs elsewhere. I'm making 1/3 less in my field here than I would in many other parts of the U.S. To me this means fixed costs (like housing) need to be that much less as well, or people will find the area inhospitable and will go elsewhere, as many professionals in my downtown complex have.