Verella’s Round-Up: "Tips for Year-End" – Is It Time to Incorporate Rent Increases in Residential Leases?

verella osborne

Verella Osborne, President, Legal Document Management, Inc.

Two property owners recently drafted residential Chicago leases in which they have the right to increase rent during the term of the lease. One tied the rent increase directly and proportionately to any real estate tax increase occurring during the lease; the other just inserted a general right to increase the rent by no more than ten percent (10%) during the term. Such rent increases may seem detrimental from a marketing standpoint, but consider the following list of costs that have increased during just the last 12 months:

So, is it time to incorporate the right to increase rents in your leases? If so, your lease would state the mandated 30-day notice requirement and stipulate the maximum increase. Options include creating an “incremental rent” lease, including step-ups every few months, higher rent during the heating season, etc. Perhaps the time has come for Chicago and Cook County property owners to become more creative in their leasing to mitigate the ever-increasing damage being inflicted on us by fiscally irresponsible governments and inept lawmakers.