City of Takoma Park: Department of Housing and Community Development The Rent Increase Petition Process The City of Takoma Park utilizes a Rent Stabilization law to regulate when and under what circumstances a landlord can increase rents on most residential rental property. As part of the law however, landlords are also provided with an opportunity to seek approval from the Commission on Landlord-Tenant Affairs ("COLTA") to charge rents that are higher than the standard rent stabilization allowance. A landlord can make a request by filing a rent increase petition. The process is relatively easy, but frequently landlords have a number of questions before they are ready to file. Common Questions 1. On what basis can I petition for a rent increase? Hardship or capital improvements are the two bases upon which landlords may apply for rent increases. Generally, a Hardship Petition requires that a landlord show that her net operating income in the base year (usually 1990) is larger, after adjusting for inflation, than her net operating income in the petition year. In general, a Capital Improvement Petition requires a showing of improvements to a rental unit or facility, whether labor or material, which have a useful life of more than one year, which are not annually recurring in nature, and which have a direct cost of $200 or more per affected unit, or $2,500, whichever is less. The capital improvement increases have the effect of reimbursing landlords, over time, for the costs of the capital improvements and must be filed within 6 months of completion of the work. 2. What must I do in order to apply for a rent increase? Obtain, fill out and file a standard Rent Increase Petition form with COLTA in the Department of Housing and Community Development ("DHCD"). Attach to your petition all receipts and other financial records that you will rely on to justify a rent increase. Send a notice of filing and a copy of the petition to all affected tenants within one week of filing. 3. Can you tell me how much of an increase I will get before I go through the trouble of pulling together my financial records and doing the calculations? No. Any landlord seeking a rent increase must read the law and regulations, fill out the petition form and do the calculations in order to determine how much of an increase she may be entitled to. 4. Do I need to hire an accountant in order to fill out and file the petition? Probably not. The law, regulations and petition forms are straight forward and, unless someone else manages the financial business of your property, you should be able to complete the petitions yourself. 5. Is there a maximum rent increase that I can be granted? No. If a landlord's petition and supporting documentation show that she is entitled to an increase of 25% over current rents, then she will be granted a 25% increase. However, all increases on occupied rental units that are greater than 15% will be phased in over a period of years until the full rent increase is attained. (Example: a 25% rent increase will be applied as 15% in the first year and 10% in the second year). 6. What are the specific standards that COLTA uses when reviewing a rent increase petition? Petitions are reviewed in accordance with the rules, procedures and formulas set forth in Chapter 6, Article 7, Section 6-91 (Rent Increase Petitions) of the Takoma Park Code and Section 21 of the General Rules and Regulations of Procedure. You can get these Sections of the law for a nominal charge of $2.00 (to cover the cost of copying) by sending a check or money order payable to "City of Takoma Park" to: COLTA - Rent Increase Law, 7500 Maple Avenue, Takoma Park, MD 20912. There is no charge for a petition form. 7. How long does it take for COLTA to make a decision on my petition? Within approximately three (3) months of filing, COLTA issues a written Preliminary Administrative Decision that sets forth the amounts of any rent increases granted. Landlords must provide copies of the Preliminary Administrative Decision to affected tenants. 8. When can I begin to charge my tenants the rent increases granted by COLTA? You can take the new increases in accordance with the terms and conditions set forth in the Preliminary Administrative Decision. However, you will not be permitted to take increases any earlier than two (2) months after the date that you file the petition and no earlier than twelve (12) months after your last increase. 9. What can I do if I'm not satisfied with the rent increases granted? After the Preliminary Administrative Decision is issued, both the landlord and any affected tenants have 30 days to file with COLTA specific written objections to the decision. If no objections are received within 30 days, the Preliminary Administrative Decision becomes final. 10. What should I do if I don't understand something about the petition process or have other questions. First, read and carefully review the law and regulations. Then, if you still have questions, contact COLTA's Executive Director at (301) 270-5900.