Tips for Landlords Managing Rent-Controlled Apartments

Managing apartment buildings can be as challenging as it is rewarding, and landlords find rent-controlled buildings come with their own complexity. Many cities implement rent control to maintain rent stability and protect tenants. For landlords, managing rent-controlled buildings can be profitable – but they must understand rent control and its implications to avoid legal issues.

Of course, owning any property involves managing many tasks, and it can be difficult to keep up with them all without some help. That’s why property owners often benefit from property management services. A property management team understands the various legal necessities of owning and managing a rent-controlled apartment and can stay on top of new developments, so you don’t have to. Gain insight into managing rent-controlled apartment buildings from Cervelli Real Estate & Property Management.

How Does Rent Control Work?

In the absence of rent control, the primary factor that determines rent prices is the local market. Landlords consider what other landlords in the area charge and set prices that keep them competitive. However, in areas with rent control laws in place, landlords must consider local regulations when figuring out rent prices.

In the U.S., each state takes a different approach to rent control. New Jersey doesn’t impose statewide rent control laws but allows local governments to establish these regulations. Over 100 NJ cities have placed restrictions on rent control, such as Newark, Edison, and Jersey City.

As it suggests, rent control dictates how much a landlord can charge tenants and provides a maximum allowable rent increase. The goal of rent control is to protect tenants, but localities that implement these laws also recognize their impact on landlords. The ideal is striking a balance between stabilizing rent and honoring the interests of property owners and investors. In addition to restricting rent increases, rent control laws often require landlords to provide valid reasons for evicting tenants. They also protect tenants from retaliation should they exercise their rights.

The Impact of Rent Control on Landlords

Landlords of rent-controlled apartments need to be aware of local regulations. Should a landlord attempt to undermine rent control laws, tenants can exercise their right to report violations to city housing authorities.

At the same time, landlords want to make a profit. One of the main arguments against rent control is reduced profitability. Limitations on rent increases often make it harder to invest in the property. Plus, with tenants renewing leases more often, landlords frequently face increased maintenance and repair costs without added income.

Strategies for Navigating Rent Control

Rent control may feel like a reason not to manage apartment buildings. Yet, you may still find managing rent-controlled properties lucrative by operating more strategically. One of the most beneficial steps you can take is partnering with a reliable property manager. These professionals are knowledgeable of local rent control laws and stay up to date with guidelines to ensure you stay compliant. This gives you peace of mind that your rent increases adhere to requirements, so you won’t waste time and resources on legal concerns.

Other best practices to help landlords navigate rent control include:

Analyze the Various Factors Dictating Rent Prices

Rent control guidelines are not the only factor determining your rent prices. The local rental market also plays a significant role. Evaluating market rates helps establish competitive rent prices. Additionally, property management costs can influence prices. Determine the costs for utilities included in the rent, as well as renovations, repairs, and routine maintenance.

Ultimately, your goal is to set fair rent prices that attract tenants while ensuring you have enough revenue to cover expenses and make a profit.

Maintain Effective Communication

No matter which type of building you manage, effective communication is essential. It fosters a better relationship with your tenants and can make resolving disputes easier. In some cases, communication can help avoid problems turning into legal issues.

When tenants reach out with questions or concerns, respond promptly. Explain how you plan to resolve the issue. Regularly update tenants on maintenance and repair tasks. Offer multiple methods of communication, such as email and text, to reach tenants easily.

You might also consider sharing tenant resources on your website or at the rental office. It’s not a landlord’s responsibility to let renters know about changes to rent control laws, but you can make it easier but having this information easily accessible for renters to review.

Additionally, while NJ state law does not impose statewide rent control, there are still guidelines to follow. For instance, landlords must give proper notice of a rent increase – at least 30 days before. Some cities have their own guidelines, so landlords want to check with the local housing authority to determine when they must issue notices.

Proactive Property Maintenance

Another major concern for landlords of rent-controlled apartments is maintenance. Some landlords might feel they don’t have enough resources for certain repairs or upgrades. This can diminish a tenant’s experience and create a bad reputation for the property.

Landlords can prevent this chain of events with proactive maintenance. Routine property inspections can identify problems before they become bigger issues, potentially saving money on repairs or replacements for equipment breakdowns. You can also develop relationships with local service providers, which may offer better rates. Share ideas with renters on ways they can best use heating and air conditioning or laundry facilities to prevent malfunctions.

Seek Legal Advice When Necessary

Despite your best efforts to avoid them, legal issues may still occur. You can better protect yourself by becoming aware of tenant rights and understanding your obligations under local laws. If you experience legal trouble, don’t figure it out alone – seek legal advice. When you find an attorney or housing agency that can help, explain the situation in detail and follow their guidance.

 Guidance With Rent Control and Property Management

Landlords are advised to take rent control seriously given the implications. With the many other tasks landlords handle, staying on top of new developments in rent control can be difficult. Rules change all the time, not just in regard to rent control but owning and managing apartment buildings in general. At Cervelli Real Estate & Property Management, our property management services ensure you stay compliant with guidelines while also assisting with daily operations.

Cervelli Real Estate & Property Management has over 30 years of experience serving New Jersey’s Gold Coast, including Hudson, Bergen, Essex, Union, and Passaic counties. Contact us today to learn more about how we can help manage your apartment building.