Rent control
Local laws limiting how much rent can go up each year. Common in some cities, banned in some states. Rules vary a lot by jurisdiction.
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Part 1 of 4
Why a seller cares
In a rent-controlled city the rent a buyer can charge is capped, and the cap is priced into what the building is worth. A seller of a controlled unit is selling the income as it is, not as the market would set it.
Part 2 of 4
A simple example
Your rental is under rent control at $1,100 where market rent is $1,900. Investor buyers value the building on $1,100, and on the rules for raising it.
| The situation | What it does to the sale |
|---|---|
| A controlled unit at below-market rent | Priced on the controlled income |
| A vacant controlled unit, where vacancy resets the rent | Worth more empty than occupied |
| A city with no rent control | Rent is whatever the market and the lease say |
Rent control sells with the building. The buyer buys the cap.
Part 3 of 4
What people get wrong
That a new owner can reset the rent. In most rent-control systems the tenant's rent stays, and only the rules allow a raise.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
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