Renewal at undefined 'market rate'
'Market rate' without definition lets the landlord raise rent to whatever they claim the market is. Ask for a cap or reference comps.
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What it actually means
Market rate is subjective. Without a reference (e.g., HUD Fair Market Rent, average of 3 comps), the landlord has unlimited discretion.
Negotiate: 'market rate as determined by [specific index]' or 'not to exceed X%' gives you protection.
What it looks like in a lease
"Upon renewal, Rent shall be adjusted to the then-current market rate as determined by Landlord."
What to watch for
- No cap
- No dispute mechanism
How to negotiate it
'Can we define market rate as the lower of: (a) 5% increase, or (b) HUD FMR for this area?'
When it crosses into a red flag
- Landlord's sole determination
- No reference index
Frequently asked questions
Can I dispute their market rate?
Without a defined process, you can only negotiate or move. Build in a dispute clause upfront.
Want to know how this works in your specific state? Read the Rent increases during a lease guide, or pick your state from the guide index.
Related clauses
General information, not legal advice. Clauses are interpreted differently across states and courts. For a binding interpretation of your specific lease, consult a licensed attorney in your state.
