“Dear Tenant: Due to passage of Prop E on 3 June, your rent will be increased effective 15 July 2014. This is legal since your one-year lease period has expired, and you now rent on a month-to-month basis.
Since my rental property is a business which funds my retirement, as expenses (property taxes) increase, I must also raise your rent to maintain my cash flow. And since there are more taxes looming for city waste water, storm water, golf course, Redevelopment and Pension debts, I’ve decided it’s prudent to increase your rent now to establish a cash reserve for future property tax increases.
The amount of my Prop E tax increase is unknown for several reasons: Timing of School Bond issuance is controlled solely by the School District, as are interest rates and fees (homeowners have no say in the matter). Since bond interest rates can be as high as 12 percent, I’ve opted for a modest 6 percent rent hike, plus 3 percent for other city taxes, at least for now.
With your current rent at $4400 for the Coronado Avenue home, the $396 monthly increase ($4,752 per year) will bring your new rent to $4796 per month ($57,552 per year). Of course, your rent for July will be prorated at only $4598. I know this amount is significant, and I will understand if you decline to accept the rent increase and terminate your lease. I would appreciate a response not later than 15 June so I can arrange for a new tenant as soon as possible should you decide to move on. There are numerous parents wishing to move to Coronado for the quality of our schools.
By the way, the School Bond taxes will be paid through 2024, and homeowners won’t get any refunds even when State budgets increase, so you should consider this a permanent rent increase.”
(Landlords are free to plagiarize this sample letter; tenants should seriously consider voting NO on Prop E to avoid rent increases.)
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