Category: rent-control

Washington’s Rent Cap Law and the Exemptions That Matter

In May 2023, Washington passed HB 1217, establishing the state’s first statewide rent increase cap. The law limits annual rent increases to the greater of 7% or the Consumer Price Index (CPI) for the Seattle-Tacoma-Bellevue region, capped at 7% for three-year periods. But that headline figure masks critical nuance: Washington’s rent cap does not apply uniformly to all rental properties.

RCW 59.18.140 carves out specific property types and situations where landlords can increase rent without the HB 1217 ceiling. These exemptions were intentional legislative choices—the statute recognizes that certain housing categories operate under different economic models or policy objectives. For self-managing landlords with 2–75 units, understanding these exemptions determines whether you can raise rent freely or must stay within the 7% cap annually.

Misidentifying your property’s status has real consequences. If you charge rent above the cap on a non-exempt property, you face:

• Statutory damages of $1,000 per violation (per tenant, per year)
• Recovery of overcharged rent with interest
• Tenant’s attorney fees and court costs
• Potential investigation and enforcement by the Washington Attorney General

This guide walks you through each exemption category in RCW 59.18.140, explains the compliance proof you need, and shows you how to document your exemption claim before rent negotiations begin.

The Nine Property Exemptions Under RCW 59.18.140

Washington law exempts the following property types and situations from HB 1217 rent caps. Each has specific requirements and edge cases.

1. Owner-Occupied Properties (Single-Unit or Multi-Unit)

Statute language: “The owner occupies the unit as a primary residence and either owns the property in fee simple or is a life estate holder.”

This is the most commonly claimed exemption, but also the most frequently misapplied. The rule is strict: you must live in the building as your primary residence. You cannot claim owner-occupied exemption if you:

• Own the property but rent out all units (even if you say you plan to move in later)
• Live in a different state or out-of-state part-time
• Own the property through an LLC or corporation (ownership in a business entity disqualifies the exemption)
• Are a life estate tenant but do not own the property
• Have vacated your unit intending to move away permanently

Compliance documentation: Keep proof of your primary residence status. The law does not require specific documentation, but courts have accepted:

• Voter registration listing your rental property address
• Driver’s license with property address
• Property tax homestead exemption filing
• Mortgage or deed documents showing your name as owner
• Utility bills or mail received at the property address

Important edge case: If you own a duplex and live in Unit A while renting Unit B, you may claim exemption for Unit B under the owner-occupied rule. However, some local jurisdictions (Seattle, Tacoma) have additional renter protections that may override this exemption. Check your city’s municipal code before assuming duplex units qualify.

2. Properties With a Certificate of Occupancy Issued After April 28, 2019

Statute language: “The property has received a certificate of occupancy for new construction on or after April 28, 2019.”

New construction is exempt from HB 1217 during an initial window. However, the exemption is time-limited and expires automatically.

Exemption timeline:

• Property receives certificate of occupancy after April 28, 2019 → Exempt from HB 1217
• First tenant’s move-in date occurs → 5-year exemption clock starts
• 5 years after first tenant move-in → HB 1217 rent cap applies automatically (no exemption renewal available)

The statute does not require landlords to notify tenants when the exemption expires. It expires automatically by operation of law. If you own a property that received its certificate of occupancy in 2020 and leased to the first tenant in January 2021, your exemption ends January 2026. Any rent increase you charge in 2026 must comply with HB 1217.

Compliance documentation: Obtain and retain:

• Certificate of occupancy (filed with local building department)
• Date certificate was issued
• First lease execution date and tenant move-in date
• Written notice to yourself or your files calculating exemption expiration date (recommended but not required by statute)

Note: A certificate of occupancy is different from a building permit or final inspection approval. You need the actual certificate—the official document from your city stating the property is legally occupiable. Contact your local building department to obtain a certified copy if needed.

3. Federally Subsidized Housing

Statute language: “The property is participating in a federal assistance program that regulates rents, including but not limited to federal housing assistance programs under 42 U.S.C. Sec. 1437.”

Properties receiving Section 8, Low-Income Housing Tax Credit (LIHTC), public housing assistance, or other federal rent-regulated programs are exempt. Rent is controlled by federal regulation, not HB 1217, so Washington’s state cap is inapplicable.

Compliance documentation: Maintain:

• Current federal housing assistance contract or agreement
• Program name and agency (HUD, state housing finance agency, local public housing authority)
• Copy of rent determination letter from federal program administrator

4. Long-Term Care Facilities and Assisted Living

Statute language: “The property is a long-term care facility licensed under chapter 18.51 RCW or an assisted living facility licensed under chapter 18.20 RCW.”

Nursing homes, memory care facilities, and assisted living residences are exempt. These are licensed by the Washington Department of Social and Health Services (DSHS) and operate under separate rate-setting rules.

Compliance documentation: Obtain:

• Current facility license from DSHS
• Copy of license displaying facility name and license number

If you operate a licensed facility, you likely have annual licensing renewals; keep these on file.

5. Single-Family Homes Sold in Arms-Length Transaction

Statute language: “The property is a single-family home that was sold in an arms-length transaction, and the buyer intends to occupy the home as a primary residence, and the property was not previously rented by the same landlord.”

This exemption applies only once per property per ownership change. If you purchase a single-family home intending to live in it, and you later decide to rent it out, HB 1217 does not cap your rent. The exemption lasts only as long as the property remains under your ownership in that use context.

Key requirements:

• Home must be a single-family detached house (not a condo, townhouse, or multi-unit building)
• Sale must be an arms-length transaction (not a gift, inheritance, or transfer from related party); however, statute does not define “arms-length” and case law is sparse
• Buyer (you, the current owner) must have intended to occupy as primary residence at time of purchase
• Property was not rented by you before purchase (critical: this is per-landlord, not per-property; if you owned it before and rented it, exemption does not apply even if you repurchase it later)

Compliance documentation: Retain:

• Closing documents and HUD settlement statement showing purchase date and your name
• Original purchase intent documentation (email to real estate agent, mortgage application stating intent, etc.)
• No record of prior rental history under your name

Edge case: What if you inherited a home? Inheritance is not an arms-length transaction, so the exemption does not apply. Similarly, if your spouse owned the home and you inherited it when they passed, it still does not qualify because ownership transferred via inheritance, not a sale.

6. Properties in Certain Rural Counties

Statute language: “The property is located in a county with a population of less than 50,000, based on the most recent U.S. Census.”

Washington exempts properties in rural counties where population is below 50,000. As of August 2026, the following counties qualify:

• Adams County (population ~20,400)
• Asotin County (population ~21,700)
• Columbia County (population ~3,800)
• Ferry County (population ~7,600)
• Garfield County (population ~2,300)
• Gilman County (population ~2,100) [Note: Gilman merged with Pacific; population combined ~4,400—verify with county assessor]
• Lincoln County (population ~10,500)
• Pacific County (population ~21,400)
• Pend Oreille County (population ~12,900)
• Skamania County (population ~12,100)
• Wahkiakum County (population ~4,500)

Important note: Population thresholds change with decennial U.S. Census data. The 2020 Census is the current baseline. If a county’s population crosses 50,000 in the next Census (2030), exemption status may change for future rent increases. Monitor your county assessor’s office for updates.

Compliance documentation: Document:

• County name where property is located
• Most recent U.S. Census population figure for that county
• Print of county population data from U.S. Census Bureau website (census.gov)

No affirmative action required—if your property is in a qualifying rural county, exemption applies automatically. However, keep documentation in your lease file to respond if a tenant challenges your rent increase.

7. Properties Operating as Hotels, Motels, or Bed-and-Breakfasts

Statute language: “The property is rented for less than thirty (30) consecutive days at a time.”

Short-term rentals (STRs) and vacation properties are exempt. The 30-day threshold is strict: if a tenant occupies the unit for 30 consecutive days or longer, HB 1217 applies. If all your leases are 29 days or fewer, exemption applies.

Compliance detail: “Consecutive days” means unbroken occupancy. If a guest stays 15 days, leaves, and returns for another 20-day stay, that’s two separate rental periods—each under 30 days—and exemption still applies. Only when a single tenant’s stay reaches 30 days does exemption expire.

Risk: If a tenant overstays or converts a short-term rental to a de facto long-term tenancy (beyond 30 days), HB 1217 rent cap suddenly becomes enforceable. Courts view the 30-day threshold as an objective fact, not landlord intent. Document lease terms clearly.

8. Accessory Dwelling Units (ADUs) – Specific Criteria

Statute language: “The property is an accessory dwelling unit serving as a primary residence for the owner of the property on which the accessory dwelling unit is located.”

This exemption is narrower than it appears. An ADU qualifies for exemption only if the primary dwelling’s owner lives in the ADU as their primary residence. In other words:

• You own a house and build an ADU on the lot
• You live in the ADU as your primary residence
• You rent out the main house → Main house is exempt from HB 1217

OR

• You own a house and build an ADU on the lot
• You live in the main house as your primary residence
• You rent out the ADU → ADU is exempt from HB 1217

But: If you own a lot with both a house and ADU and rent out both units to tenants, neither unit is exempt. The exemption requires that the owner personally occupy one of the two structures as primary residence.

Compliance documentation: Maintain:

• Building permits and ADU permit showing ADU construction date
• Proof of your primary residence (voter registration, utility bills, homestead exemption)
• Clear identification of which structure (house or ADU) you occupy

9. Properties Converted from Commercial to Residential Use

Statute language: “The property was converted from a non-residential use to a residential use, and the property has received a certificate of occupancy within the preceding five (5) years.”

Mixed-use conversions (e.g., abandoned warehouse to apartments, retail space to residential lofts) are exempt during a 5-year window following conversion certificate of occupancy. This mirrors the new construction exemption but applies to repurposed buildings.

Timeline:

• Building originally operated as commercial (office, retail, warehouse, industrial)
• Owner converts to residential use
• City issues certificate of occupancy for residential use → Exemption clock starts
• 5 years after residential certificate of occupancy → Exemption expires, HB 1217 applies

Compliance documentation: Obtain:

• Certificate of occupancy for residential use (dated)
• Building permit or conversion permit showing prior non-residential use
• Prior business license or zoning records showing commercial history

Properties NOT Exempt – The Default Rule

If your property does not fit one of the nine exemptions above, HB 1217 rent cap applies. This covers the vast majority of rental properties in Washington:

• Multi-family apartment buildings where owner does not occupy a unit
• Single-family homes rented by non-occupant owners
• Condos and townhouses (unless owner-occupied)
• Long-term rentals in urban and suburban counties
• Properties in counties with population over 50,000

For these properties, your maximum annual rent increase is the greater of:

• 7%, or
• CPI for Seattle-Tacoma-Bellevue region (calculated annually by Washington Department of Commerce)

The formula is capped at 7% on a three-year rolling average, even if CPI exceeds 7% in a single year.

Burden of Proof and Enforcement Risk

Washington places the burden of exemption proof on the landlord, not the tenant. If a tenant alleges you charged rent above the HB 1217 cap, you must prove your property qualifies for exemption. If you cannot, you are liable for:

• $1,000 minimum statutory damages per violation (per affected tenant)
• 100% of overcharged rent, calculated from the date overcharge occurred
• Interest on overcharged amounts
• Tenant’s attorney fees and court costs
• Potential treble damages if violation is deemed willful (RCW 59.18.150)

Enforcement sources:

• Tenant lawsuits: Individual or class action in District Court (claims under $10,000) or Superior Court
• Attorney General enforcement: Washington Attorney General Consumer Protection Division investigates HB 1217 violations and can file enforcement actions; contact: Consumer Protection Division, 800-551-4636
• Local tenants’ unions: Seattle Tenants Union, Tacoma Tenants Union, and other advocacy groups actively file complaints and organize tenant actions

Because burden is on you, document your exemption immediately upon property acquisition or lease renewal. Do not wait until a dispute arises.

Compliance Checklist: How to Document Your Exemption

Use this checklist before raising rent on any property. Complete all steps applicable to your property type.

How to Use Exemptions Defensively: Documentation Best Practices

Documentation is your only defense if a tenant disputes your rent increase. Even if your exemption is valid, failure to document it shifts burden to you in litigation.

Step 1: Document Exemption Before Lease Signing

Before you issue a lease or increase rent, create a one-page exemption summary in your lease file. Include:

• Property address
• Exemption category claimed (e.g., “Owner-occupied primary residence” or “New construction—exemption expires 3/15/2027”)
• Supporting documents attached (copies of proof)
• Date you verified exemption status
• Your signature or initials

This memo creates a contemporaneous record showing you exercised reasonable care. Courts view landlords who document exemptions more favorably than those who claim exemptions retroactively.

Step 2: Include Exemption Notice in Lease

Add a clause to your lease stating the exemption basis, if applicable. Example language:

“This property qualifies for exemption from Washington HB 1217 rent cap as follows: [describe exemption]. Rent increases are not subject to the 7% annual cap under RCW 59.18.140(1)(a). [If exemption is time-limited] This exemption expires on [date]. After that date, rent increases will be subject to RCW 59.18.140 limitations.”

This puts the tenant on notice and reduces liability risk if they later claim surprise at above-cap increases.

Step 3: Maintain Updated Records

For properties with time-limited exemptions (new construction, conversions, etc.), create a calendar reminder one year before exemption expiration. Review your rent-setting process before that date to ensure compliance with HB 1217 going forward.

Common Mistakes That Void Exemption Claims

Self-managing landlords frequently misapply these exemptions. Here are pitfalls to avoid:

Mistake 1: Claiming owner-occupied exemption without actually living there. The statute does not require you to live in a property for a minimum time or provide specific documentation upfront. However, if a tenant later proves you do not occupy the property as your primary residence (via public records, voter registration, etc.), exemption is void and you face statutory damages.

Mistake 2: Assuming new construction exemption lasts indefinitely. The 5-year clock is strict and automatic. If you lease your property in 2021 and raise rent 8% in 2026, you face liability because exemption expired January 2026. Mark expiration dates in writing immediately after first lease execution.

Mistake 3: Relying on oral or informal owner-occupancy claims. If you tell a tenant verbally that you live in the property but cannot prove it with documents, courts favor the tenant’s written lease claim over your testimony. Keep written proof in your files.

Mistake 4: Misidentifying single-family home vs. condo.*** Single-family homes (detached houses) qualify for arms-length sale exemption; condos and townhouses do not. Deed language and property tax records clarify your property’s classification. Verify before claiming exemption.

Mistake 5: Charging short-term rental rate but allowing month-to-month or indefinite tenancy. If your lease allows occupancy beyond 30 consecutive days, exemption vanishes even if you call it a short-term rental. The 30-day threshold is about actual occupancy duration, not lease label.

Mistake 6: Assuming rural county exemption applies to unincorporated areas but not city limits. Rural county exemption applies anywhere within the county’s borders, including incorporated cities within that county. Location in a small city does not void exemption if county population is under 50,000.

Interaction With Local Rent Control Laws

Some Washington cities impose stricter rent controls than HB 1217. Seattle, Tacoma, and Olympia have local rent ordinances. RCW 59.18.140 exemptions from state law do not automatically exempt properties from local controls.

If your property is in Seattle or Tacoma, verify that your exemption qualifies under both state and city law. Some exemptions (e.g., new construction) may qualify at the state level but face additional restrictions locally. Consult your city’s ordinance or contact the local housing department before finalizing rent increases in controlled jurisdictions.

Frequently Asked Questions

Q: If my property qualifies for exemption, do I need to tell my tenant before I increase rent above 7%?

A: Best practice is to include exemption notice in your lease or provide written notice of exemption before the increase takes effect. Washington law does not explicitly require advance notice of exemption status, but providing

What Is Preferential Rent in New York?

Preferential rent is the actual lease rent amount you charge a tenant in a stabilized apartment—and it may be lower than the legal regulated rent set by the NYC Rent Guidelines Board. This creates a two-tier rent structure:

• Legal Rent (Regulated Rent): The maximum you can legally charge, calculated by the RGB and adjusted annually.
• Preferential Rent (Lease Rent): What you actually charge the tenant—often below legal rent as an incentive to sign a lease or retain a good tenant.

Under RSC §2521.2(e), if a stabilized tenant’s lease rent is below the legal regulated rent, you must disclose the legal rent in writing. Many small landlords skip this disclosure, creating a compliance trap that tenants—or tenant advocates—exploit during lease renewal.

The compliance risk: If you don’t disclose, the tenant can argue the renewal lease is void, refuse to pay any increase, and file an administrative complaint. The DHCR (Department of Housing and Community Renewal) can order you to refund overcharges dating back six years, plus treble damages.

Legal vs. Preferential Rent: The Critical Distinction

New York law makes a hard distinction between these two figures because preferential rent gives you leverage to manage tenant turnover and cash flow. But that flexibility comes with strict disclosure and limitation rules.

Example: You own a 1-bed in Astoria with a legal rent of $2,500. You agreed to preferential rent of $2,200 to attract the tenant in 2024. At renewal in 2026, the RGB allows a 3% increase. Your options are:

• Increase preferential rent to $2,266 (3% of $2,200), well within your legal rent ceiling
• Keep preferential rent flat at $2,200, if tenant retention matters more than the 3% bump
• You cannot increase preferential rent to $2,575 (3% of legal rent)—this violates RSC §2521.2 and triggers overcharge liability

RSC §2521.2(e): The Disclosure Requirement

RSC §2521.2(e) is the most-litigated preferential rent statute because landlords routinely ignore it. The rule states:

“Where the rent charged is less than the legal regulated rent, the lease shall state the legal regulated rent and the preferential rent.”

This means your lease document must explicitly show both figures. Simply mentioning “$2,200/month” is not enough. You need:

• A clause stating: “Legal regulated rent: $2,500; Preferential rent (lease rent): $2,200”
• Clear notice that the legal rent may increase annually by the RGB percentage
• A statement that if the tenant vacates or the lease terminates, the next tenant may be charged the legal rent or higher

Penalty for non-disclosure: The DHCR and tenant courts treat missing disclosure as a presumptive overcharge. The tenant can claim they were never informed of the legal rent, file a complaint, and potentially void the lease. Your defense—”But I intended to offer the lower rent”—carries minimal weight.

HSTPA §6: Annual Legal Rent Notifications

The Housing and Community Renewal (HCRA) law, §6, requires an additional layer of disclosure: you must notify the tenant in writing of the legal regulated rent every lease year, at least 30 days before the lease expires.

This is separate from your lease renewal notice. The timeline works like this:

• 90-120 days before lease end: Send lease renewal offer with preferential rent and legal rent amounts.
• Minimum 30 days before lease end: If tenant hasn’t signed, send formal legal rent notification showing the new legal rent calculated by the RGB for that lease cycle.
• At renewal signature: Lease must state both rents again.

Tenants often argue that if they received no written notice of the legal rent before renewal, they were entitled to keep the preferential rent frozen or demand the renewal be voided. Courts have sided with tenants in these disputes, particularly in buildings where the landlord sent only a rent increase notice without referencing the legal rent framework.

RGB Percentage Increases: The 2026 Benchmark

The NYC Rent Guidelines Board sets annual increase percentages for 1-year and 2-year stabilized leases. For 2026 (lease renewals from October 1, 2025 to September 30, 2026), the Board approved:

Critical rule: Whether the tenant has preferential or legal rent, you cannot exceed the RGB percentage increase. If a tenant’s legal rent is $2,000 and you’ve been charging $1,800 (preferential), you cannot jump to $2,060 at renewal. The cap is $1,854 (3% of $1,800).

The RGB publishes these percentages in late summer each year. Landlords who wait until October to recalculate rents risk sending renewal notices with outdated percentages—another source of DHCR complaints.

What Happens at Lease Renewal: Step-by-Step Compliance

Step 1: Calculate the New Legal Rent (120 Days Before Lease End)

Pull the tenant’s lease file and identify:

• The current legal rent on the lease
• The lease renewal date
• The applicable RGB percentage for the renewal period

Multiply the current legal rent by the RGB percentage to calculate the new legal rent. Record this in your file with the RGB notice number for audit proof.

Example: Current legal rent $2,000 × 1.03 (3% 2026 increase) = $2,060 new legal rent.

Step 2: Decide the New Preferential Rent (90 Days Before Lease End)

You have three options:

1. Increase preferential rent by the RGB percentage: Current preferential rent × RGB % = new preferential rent (up to, but not exceeding, the new legal rent).
2. Freeze preferential rent: Keep it the same as the current lease. This is compliant if the new legal rent is higher.
3. Increase preferential rent above the RGB percentage: Prohibited under RSC §2521.2. This is an overcharge and a violation.

Document your decision before drafting the renewal notice.

Step 3: Send Renewal Notice with Legal Rent Disclosure (90-120 Days Before Lease End)

The renewal notice must include:

• The new preferential rent (lease rent) amount
• The new legal regulated rent amount
• A statement that the preferential rent is the amount tenant will pay, but the legal rent is the RGB-regulated maximum
• The effective renewal date
• The RGB order or reference number supporting the legal rent calculation
• A clear indication that this is a renewal offer, not a demand

Sample language: “Renewal Lease commencing [date]. Preferential rent (lease rent): $1,854. Legal regulated rent (per RGB Order #125-26): $2,060. Tenant will pay $1,854 per month. This renewal offer is valid through [date].”

Step 4: Provide Written Legal Rent Notification (At Least 30 Days Before Lease End)

Send a separate notice titled “Notice of Legal Regulated Rent” stating the new legal rent and the lease rent, if the tenant hasn’t signed the renewal. This satisfies HSTPA §6.

Many landlords skip this step because they assume the renewal notice is enough. It isn’t. DHCR guidance treats these as two separate compliance requirements.

Step 5: Execute the Renewal Lease (Before Lease Expiration)

When the tenant signs the renewal lease, the document must again state both rents. Do not rely on a generic lease template; customize it for each renewal to show the updated figures and RGB reference.

Common Compliance Traps & How to Avoid Them

Trap 1: Calculating Renewal Rent from Legal Rent Instead of Preferential Rent

A landlord charges $1,800 preferential rent on a $2,000 legal rent. At renewal, they calculate the new preferential rent as 3% of $2,000 = $2,060, and increase the tenant to $1,854. This is correct. But if the landlord instead calculates 3% of the legal rent and tries to charge $2,060 to match it, they’re in violation.

Fix: Always apply the RGB percentage to the current preferential rent the tenant has been paying, not the legal rent.

Trap 2: Missing the 30-Day Legal Rent Notification Deadline

The tenant’s lease ends October 31. You send the renewal notice on August 1 but don’t send the separate legal rent notification until October 15. This misses the 30-day window under HSTPA §6.

Tenant files a complaint claiming improper notice, and the DHCR may void the renewal lease or order rent abatement.

Fix: Send the legal rent notice by October 1 at the latest. Use a checklist to track notification dates for all units.

Trap 3: Updating Lease Terms Without Disclosing the Legal Rent

You renew the lease with updated building rules or a parking clause change but forget to include the legal rent and preferential rent in the renewal lease body.

The tenant later claims the renewal is invalid because it lacks the statutory disclosure, and you can’t evict them for non-payment without proving a valid lease.

Fix: Use a renewal lease template that includes a mandatory “Rent Schedule” section with both rents, RGB reference, and lease term dates. Review it before every renewal.

Trap 4: Not Documenting RGB Increase Percentages

You renew the lease with a 3% increase but can’t find proof of the RGB order. The tenant disputes the increase and claims you made up the percentage.

Without contemporaneous documentation, the DHCR may find insufficient evidence of a lawful increase and order a refund.

Fix: Print and file the RGB order letter for each renewal cycle. Note the order number on the renewal notice and keep it with the lease.

Penalties for Non-Compliance

Violations of preferential rent disclosure and renewal rules carry steep penalties:

If a tenant sues you in Housing Court for overcharge, they can also countersue in your eviction case, which complicates settlement and often forces you to drop the eviction to avoid judgment against you.

Preferential Rent at Lease Renewal: Compliance Checklist

Use this checklist 120 days before each lease renewal:

• ☐ Identify current lease rent (preferential) and legal regulated rent from prior lease
• ☐ Confirm tenant’s lease expiration date
• ☐ Obtain the RGB order for the applicable lease year; note the percentage and order number
• ☐ Calculate new legal rent: Current legal rent × RGB % = New legal rent
• ☐ Calculate new preferential rent: Current preferential rent × RGB % = New preferential rent (confirm it does not exceed new legal rent)
• ☐ Draft renewal notice with both rents clearly stated; include RGB order reference
• ☐ Send renewal notice to tenant at least 90 days before lease end
• ☐ If tenant hasn’t signed by 30 days before expiration, send separate “Notice of Legal Regulated Rent” per HSTPA §6
• ☐ Upon tenant signature, execute renewal lease with rent schedule stating both rents
• ☐ File lease and RGB order reference in tenant’s lease file
• ☐ Update your portfolio management system to reflect new preferential rent effective date

Many small landlords manage this manually in spreadsheets, which introduces transcription errors and missed deadlines. Platforms like LeaseBase track lease renewal dates and RGB percentages automatically, flagging units due for renewal and pre-populating rent calculations based on the current RGB order. This reduces manual calculation risk and ensures legal rent disclosures are generated with every renewal.

FAQ: Preferential Rent and Lease Renewal

Q1: If I’ve been charging preferential rent for years, can I jump the tenant to legal rent at renewal?

A: No. RSC §2521.2 limits renewal increases to the RGB percentage, regardless of the gap between preferential and legal rent. You can only raise the preferential rent by 3% (or the applicable RGB percentage) each renewal. If you want to eventually reach legal rent, you must do so in increments over multiple lease cycles, always capped by the RGB percentage.

However, if the tenant voluntarily vacates and you re-lease the unit, the next tenant can be charged the legal rent (or higher, if the building allows vacancy increases under RSC §2522.5).

Q2: What if I lose the RGB order number and can’t document the percentage I used?

A: You have a compliance problem. The DHCR will likely reject your renewal or find it insufficient to support the increase. The RGB publishes all orders on its website (rentguidelinesboard.cityofnewyork.us), and you can retrieve prior years’ orders by lease renewal date. Reconstruct the order, file it with your lease, and keep a copy going forward. In future renewals, save the order immediately when it’s published.

Q3: Can I include a preferential rent clause that says rent will increase to legal rent if the tenant breaks the lease?

A: No. The lease cannot condition the preferential rent on the tenant’s behavior. Preferential rent is a landlord election under RSC §2521.2, not a penalty clause. A clause stating “If you break the lease, you owe legal rent retroactively” is unenforceable and likely violates the Lease Renewal Law. Stick to the disclosure: state the legal rent and preferential rent, and make clear the tenant pays the preferential rent as long as the lease is valid.

Q4: Do I need to notify the tenant if I’m freezing preferential rent (no increase)?

A: Yes. Even if you’re not increasing the preferential rent, you must still send the renewal notice disclosing the legal rent and stating the new lease term. The legal rent still increases by the RGB percentage, and the tenant needs to know the gap between what they’re paying and the regulated maximum. Failure to disclose is still a violation under RSC §2521.2(e).

Q5: If the tenant refuses to sign the renewal, can I evict them for holding over?

A: Yes, but only if you’ve complied with all notice requirements, including the legal rent disclosure. If you missed the 30-day legal rent notification under HSTPA §6, the tenant has a defense. Your holdover case (RSC §721, §222) must be based on a valid renewal offer. Courts often dismiss holdover cases where the landlord failed to provide proper legal rent notification, so get that notice out in writing at least 30 days before expiration.

Key Takeaway: Stay Ahead of Renewal Dates

Preferential rent compliance hinges on discipline: documenting the legal rent, calculating increases correctly, and providing timely written notice. The gap between preferential and legal rent creates a natural focal point for tenant complaints and DHCR investigations. Many small landlords assume a verbal renewal conversation or a generic rent increase letter is sufficient—it isn’t.

The risk isn’t just the current year. A single missed disclosure or miscalculated increase can spawn a six-year overcharge claim when the tenant files a DHCR complaint. At $200–500 per month in disputed rent, that’s $14,400–36,000 in potential liability, plus treble damages for willful violations.

A lease management system that integrates lease dates, RGB percentages, and rent schedules eliminates the manual tracking burden and creates audit-ready documentation for every renewal. Compliance isn’t optional in New York rent-stabilized housing—it’s the foundation of being able to enforce your lease in court.

Disclaimer

This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney licensed in New York for guidance specific to your situation, your lease language, and your property’s rent stabilization status. Preferential rent law changes periodically; verify current RGB percentages and DHCR guidance before each renewal.

What Is Oregon’s Rent Increase Cap?

On January 1, 2020, Oregon became the first state to adopt a statewide rent control law. That law, known as SB 608 and codified in ORS 90.323, caps the amount landlords can increase rent in any 12-month period to 7% plus the consumer price index (CPI).

Unlike many states that allow unlimited rent increases, Oregon’s cap applies uniformly across all 36 counties and all property types. There are no exemptions for new construction, owner-occupied buildings, single-family rentals, or properties in rural areas. If you own rental property in Oregon and accept rent from a tenant, ORS 90.323 applies to you.

This law fundamentally changed how Oregon landlords price rent. Before 2020, landlords could raise rent by any amount allowed by the lease or local law. Now, the state law acts as a hard ceiling. Even if your lease says you can raise rent by 15%, Oregon law limits you to 7% + CPI.

Understanding the 7% + CPI Formula

How the Calculation Works

The formula is straightforward but the index choice matters:

Maximum Allowable Increase = 7% + (Current Year PCE Index – Prior Year PCE Index)

Oregon uses the Personal Consumption Expenditures (PCE) price index for the West-South Central region, not the Consumer Price Index for All Urban Consumers (CPI-U) that most people associate with inflation. This distinction is critical because PCE inflation rates have historically run lower than CPI-U rates.

For example:

Note: These figures are illustrative. Actual PCE indices are published by the U.S. Bureau of Economic Analysis. Verify current rates through the Federal Reserve or Oregon Department of Consumer and Business Services before calculating increases.

Finding the Correct PCE Index

Oregon’s Department of Consumer and Business Services (DCBS) publishes the allowable rent increase percentage each year, typically in December for the following year. Landlords should verify the official percentage through:

• Oregon DCBS official website (oregon.gov/dcbs)
• The rental housing section of the DCBS website
• Published notices from the Oregon Attorney General’s office

Do not calculate the CPI index yourself unless you have confirmed the exact methodology. A calculation error that results in an increase exceeding the lawful cap exposes you to statutory damages.

Who Must Comply With ORS 90.323?

Covered Tenancies

ORS 90.323 applies to all residential tenancies in Oregon except those specifically exempted by statute. Covered properties include:

• Single-family homes and cottages
• Apartments and multi-unit buildings
• Manufactured homes and mobile home parks
• Condominiums and townhouses
• New construction (no exemption exists)
• Owner-occupied properties (no exemption exists)

Exemptions Under Oregon Law

Very few exemptions exist. ORS 90.323 does not apply to:

• Public housing operated by a housing authority
• Federally subsidized housing (in limited circumstances where federal law preempts state law)
• Transient lodging (hotels, motels, short-term rentals under 30 days)
• Tenancies governed by specific federal programs with their own rent-setting rules

Importantly, there is no exemption for new construction. This differs from many other states’ rent control schemes. If you build a new apartment complex or convert a building to rental use, the 7% + CPI cap applies from day one of the first tenancy.

Local Rent Control in Oregon Cities

Several Oregon cities have adopted local rent control ordinances that are stricter than state law. These include Portland, Eugene, and Salem. In these jurisdictions, the local ordinance controls if it is more restrictive than ORS 90.323. For example, Portland’s rent control ordinance caps increases at 3% + CPI, which is lower than the state cap, so Portland landlords must comply with the 3% + CPI figure.

If you own property in a city with local rent control, verify the local rule before calculating your increase. The more restrictive cap always applies.

Notice Requirements: The 90-Day Rule

Minimum Notice Period

ORS 90.323 requires landlords to provide written notice of a rent increase at least 90 days before the increase takes effect. This is a strict requirement with no exceptions.

The notice period is measured from the date the tenant receives the notice, not the date you mail it. For compliance purposes, assume delivery occurs when the tenant signs for it or 3 business days after mailing via First-Class mail, whichever is earlier.

Notice Content Requirements

Under ORS 90.322 (the statute governing notice), the increase notice must include:

• The current rent amount
• The new rent amount
• The effective date of the increase
• A statement in plain language that the tenant has the right to dispute the increase within 90 days by requesting an informal dispute resolution process
• The contact information for the local rental housing center or tenant advocacy organization

If your notice is missing any required component, it may be deemed invalid, and the increase cannot take effect. A tenant could refuse to pay the increased amount, and you would be unable to pursue an eviction for non-payment if the notice was defective.

Timing Examples

Here are practical scenarios to illustrate the 90-day requirement:

If you miss the 90-day window, you cannot enforce the increase until the next lease anniversary or renewal period. This is a hard deadline with no exceptions for postal delays or tenant unavailability.

Calculating Your Specific Rent Increase

Step-by-Step Compliance Checklist

Use this checklist to ensure your increase complies with ORS 90.323:

1. Identify the lease renewal date or anniversary date — this is the date the current lease term ends or the next rent adjustment date in a month-to-month tenancy
2. Verify your property’s jurisdiction — is it in Portland, Eugene, Salem, or another city with local rent control? If yes, use the more restrictive local cap
3. Obtain the current PCE index figure — verify through Oregon DCBS or the Federal Reserve
4. Calculate the allowable increase — use the formula 7% + (current PCE – prior PCE). Round to the nearest tenth of a percent
5. Multiply current rent by the percentage — e.g., $1,500 × 0.091 (9.1%) = $136.50 increase, making new rent $1,636.50
6. Draft the notice 100+ days before the effective date — do not wait until 90 days; add a 10-day buffer for mail delivery
7. Include all required notice language — reference the tenant’s right to dispute resolution and local housing contact information
8. Deliver via certified mail with return receipt or hand delivery — obtain proof of delivery
9. Document the delivery date — file a copy in your tenant record
10. Confirm the increase does not exceed the cap — even if the lease allows higher amounts

Penalties for Non-Compliance

Statutory Damages Under ORS 90.385

If you violate ORS 90.323 by charging rent above the allowable cap, Oregon law provides specific penalties:

• $200 per day for each day of violation — if the overcharge is unintentional or negligent
• Treble damages (3x the overcharge amount) — if the violation is deemed willful or intentional
• Actual damages — any damages the tenant suffered as a result
• Attorney fees and court costs — the prevailing tenant’s attorney fees are recoverable from the landlord

These penalties are not small. Consider a scenario where you increase a $1,500 rent payment by 12% instead of the allowable 9.1%, charging an extra $45 per month. If this occurs for 12 months, that’s $540 in overcharges. But the statutory damages would be $200 × 365 days = $73,000, plus treble damages if deemed willful, plus attorney fees potentially exceeding $5,000-$15,000.

This is why precision in calculating the PCE index and obtaining the correct allowable percentage is critical.

Who Can Sue and How

A tenant can bring a claim against you in small claims court (up to $10,000) or district court (no limit). The tenant does not need to hire an attorney; they can file pro se. If they do hire an attorney, you pay the fees.

Additionally, the Oregon Attorney General’s office can pursue enforcement action against landlords with a pattern of violations. This can result in civil penalties and cease-and-desist orders.

Tenant advocacy organizations in Oregon actively monitor for violations and often assist tenants in filing claims. Do not assume a violation will go undetected.

Special Situations and Edge Cases

Month-to-Month Tenancies

If your tenant is on a month-to-month lease, the 7% + CPI cap still applies. You cannot avoid the cap by converting to month-to-month. The cap applies to any increase in rent within a 12-month period, regardless of lease term length.

For month-to-month tenancies, the rent increase anniversary date is typically the date rent is due each month. Verify your lease language to confirm the specific date.

Lease Renewals vs. Lease Amendments

The cap applies to rent increases at lease renewal and mid-lease modifications. If you and the tenant agree to increase rent mid-lease (with the tenant’s consent), the 7% + CPI cap still applies. You cannot charge an increase above the cap even if both parties agree to it in writing; ORS 90.323 is a matter of public policy and cannot be waived by contract.

New Tenants and Market Rent

A common misconception: does the cap apply when a new tenant moves in? Yes, it does. If you had a previous tenant paying $1,500, and they move out, you cannot charge a new tenant $1,800 without first charging the outgoing tenant the capped increase amount.

More precisely: if a lease ends on June 30 and you had charged the tenant $1,500 with a 9% allowable increase, the maximum rent for a new tenant starting July 1 would be $1,635 (the $1,500 + 9% that you should have charged to the outgoing tenant). You cannot “reset” the rent for a new tenant and ignore the cap.

This is a complex issue, and the Oregon Attorney General has issued guidance stating that rent cannot increase beyond the cap between tenants. Consult an attorney if you need to clarify this for a specific property.

Properties with Utilities Included

If rent includes utilities, and utility costs increase, can you raise rent above the cap to cover the increased utility cost? Generally, no. The 7% + CPI cap applies to the total rent amount, regardless of whether utilities are included. You cannot circumvent the cap by separating utilities into a line item and raising that separately.

However, some leases allow for a utility pass-through clause that adjusts the rent if utility costs fluctuate significantly. Such clauses may be permissible under Oregon law, but they must be clearly disclosed in the lease and not be used as a workaround to exceed the cap.

Compliance Tools and Documentation

What You Should Track

To prove compliance if a dispute arises, maintain detailed records of:

• The prior year’s rent amount
• The PCE index figure used in your calculation (with the source and date obtained)
• Your calculation showing how the new rent was derived
• The date the notice was sent
• Proof of delivery (certified mail receipt or signed acknowledgment)
• The full text of the notice delivered to the tenant
• Any correspondence with the tenant about the increase

Maintaining these records protects you if a tenant disputes the increase. It demonstrates good faith compliance.

Automating Compliance With LeaseBase

Calculating rent increases manually across multiple properties creates risk. LeaseBase’s compliance engine tracks rent increase caps by jurisdiction and alerts you when to send notices. The platform stores the official PCE index figures and calculates compliant increase amounts automatically. You can generate notice templates pre-populated with the correct language and amounts, reducing human error.

For landlords managing multiple properties or those with tenants in different Oregon cities (each with potentially different rent control rules), automated lease management ensures you don’t miss a deadline or miscalculate an increase.

Interaction With Other Oregon Landlord-Tenant Laws

Relationship to Cause Eviction Rules

Oregon law requires landlords to have “cause” to evict, under ORS 90.405. Serving a rent increase notice does not constitute cause for eviction. However, if a tenant refuses to pay the increased rent after receiving a valid notice, that constitutes non-payment of rent, which is cause for eviction.

Be aware: if you serve an invalid rent increase notice (e.g., without 90 days’ notice), the tenant does not have to pay the increased amount. If you attempt to evict for non-payment based on an invalid notice, the eviction will likely fail in court.

No-Cause Eviction Termination Rules

Oregon has additional protections: tenancies cannot be terminated without cause except in limited circumstances. ORS 90.405 requires a landlord to prove “just cause” to evict. A rent increase above the cap is not just cause, and some tenancy terminations are prohibited if they retaliate against a tenant’s exercise of rights (ORS 90.385(7)).

Do not use rent increases as a mechanism to force out tenants you wish to remove. If a tenant can demonstrate that a rent increase was retaliatory (e.g., after they complained about habitability issues), Oregon law provides remedies against the landlord, including damages and lease reinstatement.

FAQs: Oregon Rent Increase Cap

Can I charge an increase larger than 7% + CPI if the tenant agrees?

No. ORS 90.323 is a matter of public policy. Even if you and the tenant sign a contract agreeing to an increase above the cap, that provision is void and unenforceable. The maximum allowable increase is 7% + CPI, regardless of tenant consent. Any increase above that is a violation of state law.

What if I calculate the PCE index myself and get a different number than Oregon DCBS publishes?

Use the official figure published by Oregon DCBS. If you calculate independently and your figure differs, the official state figure is what will be used in a dispute. Calculating your own PCE index exposes you to risk if your methodology differs from the state’s. Always verify against the official published rate before sending a notice.

Can I avoid the rent increase cap by including mandatory fees (parking, amenities, etc.)?

No. Oregon law considers all mandatory fees paid by the tenant as part of “rent” for the purposes of ORS 90.323. You cannot circumvent the cap by raising the base rent within the cap and then adding a new or increased fee above the cap. All housing charges must stay within the 7% + CPI ceiling in aggregate.

If I own a property in Portland and a different property in an unincorporated area of a county, do both fall under the same cap?

The Portland property is subject to Portland’s local rent control ordinance (currently 3% + CPI), which is more restrictive than the state cap. The property in the unincorporated county area is subject to the statewide cap of 7% + CPI. Each property is governed by the law of its jurisdiction. Verify your city or county’s rules if you own multiple properties in different locations.

What if my lease says the rent is tied to CPI-U, not the West-South Central PCE index?

Oregon law specifies the West-South Central PCE index, not CPI-U. Your lease contract does not override state law. If your lease references CPI-U, the state law index applies instead. Any conflict between the lease and ORS 90.323 is resolved in favor of the tenant and the state law requirement.

Oregon DCBS Resources and Official Guidance

The Oregon Department of Consumer and Business Services publishes guidance on rent increase compliance, including the official allowable percentage each year. Access these resources:

• Oregon DCBS Rental Housing Section: oregon.gov/dcbs/rh
• Annual Rent Increase Cap Announcement: Published typically in December for the following year
• Landlord Guides and FAQs: Available on the DCBS website
• Oregon Attorney General’s Office: Rental housing enforcement and guidance

Bookmark these sites. Check them at least 120 days before you plan to send any rent increase notice.

Conclusion: Compliance Is Non-Negotiable

Oregon’s 7% + CPI rent increase cap is one of the most landlord-restrictive rent control laws in the country. It applies to all properties, has no exemptions, and carries steep penalties for violations.

The good news: the rule is clear and calculable. If you follow the four core requirements—use the correct PCE index, calculate the increase accurately, provide 90 days’ notice with all required content, and document everything—you will comply with ORS 90.323.

The risk: one miscalculation or one missed deadline can cost you tens of thousands in damages. Self-managing landlords who track rent increases manually across multiple properties face compounding risk. A single error across ten properties becomes ten separate violations, each accruing $200 per day in damages.

Consider whether your current system—spreadsheets, email reminders, or manual calculations—has adequate safeguards. If not, automated compliance systems eliminate human error and provide audit trails that protect you in disputes. Evaluate tools designed for self-managing landlords that cost a fraction of a single damages award.

Compliance is not just legal obligation; it’s the foundation of sustainable self-management. Oregon tenants and their advocates actively enforce these rules. Know your numbers, send timely notices, and document everything. That is how you stay compliant under Oregon law.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance specific to your situation, especially regarding local ordinances, lease-specific questions, or disputes. Oregon law is complex and subject to judicial interpretation. The penalties and requirements described here reflect the law as of August 2026 and may change. Verify all current requirements with the Oregon Department of Consumer and Business Services or an attorney licensed in Oregon before taking action on a rent increase.

What Is HB 1217 and Why It Matters to Your Bottom Line

On June 12, 2023, Washington Governor Jay Inslee signed HB 1217 into law, establishing the first statewide rent control measure in Washington history. Effective January 1, 2026, this statute fundamentally restricts how much rent you can increase annually—even if your lease allows higher increases and even if the market demands it.

For self-managing landlords with 2–75 units, this is not optional guidance. It is mandatory law. Violations trigger significant financial exposure: treble damages (three times the overcharged rent), attorney fees paid by the landlord, and potential tenant counterclaims in eviction proceedings.

The statute appears in RCW 59.18.140, titled “Rent increases.” Understanding its mechanics—the 7% cap, the CPI formula alternative, exemptions, and notice requirements—is the difference between a clean rent increase and a lawsuit that costs tens of thousands to defend.

The 7% Hard Cap: The Starting Line for All Increases

The Basic Rule Under RCW 59.18.140(1)

Beginning January 1, 2026, a landlord cannot increase rent more than 7% per 12-month period. This is a hard ceiling. It applies to:

• Month-to-month tenancies
• Fixed-term leases at renewal
• Lease modifications during a tenancy (if allowed by the lease)
• All residential properties in Washington (with narrow exemptions noted below)

The 7% is calculated on the rent charged at the start of the 12-month period. If you charged $1,000/month on January 1, 2026, the maximum rent on January 1, 2027 is $1,070/month (7% of $1,000 = $70). If you attempt to increase to $1,100/month, you have violated the statute.

This applies regardless of what your lease says. If your lease contains language allowing increases tied to the CPI, the lease consumer price index, or market rates, those provisions are now superseded by statute. The law overrides contract terms that exceed the caps.

The CPI-U Alternative After Year One

RCW 59.18.140(2) allows a different calculation method starting after the first 12 months of tenancy:

“After the first year of tenancy, a landlord may increase the rent in an amount up to the greater of: (a) Three percent; or (b) The percentage increase in the Consumer Price Index for all urban consumers (CPI-U) for the Seattle metropolitan area for the 12 months prior to the date the increase takes effect. The cumulative increase shall not exceed seven percent.”

In plain language: you calculate rent increases using whichever is higher—3% or the Seattle CPI-U increase from the prior 12 months—but capped at 7% total.

Example: On January 1, 2027 (the second year of a tenancy that began January 1, 2026), you may increase rent by the greater of:

• 3%, or
• The CPI-U increase for the Seattle metro area from January 2026 to January 2027

If the Seattle CPI-U increased 4.2% during that 12-month window, you may increase rent by 4.2% (but not more than 7%). If CPI-U only rose 2%, you use the 3% floor.

The Seattle-Tacoma-Bellevue metropolitan area CPI-U is the official metric. The U.S. Bureau of Labor Statistics publishes this monthly. You must use the official BLS figure for your calculation date, not estimates or projections.

The Cumulative Cap of 7%

Even when using the CPI-U method, the total increase cannot exceed 7%. This means:

• If CPI-U rose 6.5%, your increase is capped at 7%.
• If you granted a partial increase (e.g., 3.5% after year one), and CPI-U rises 4% in year three, you cannot compound increases beyond 7% in any single 12-month period.

This is a per-period cap, not a cumulative lifetime cap. Each 12-month rent-increase window resets and allows up to 7% increase (or 3%/CPI-U, whichever is greater, after year one).

Notice Requirements: The 60-Day Trigger

Mandatory 60-Day Written Notice

RCW 59.18.140(4) requires that you provide written notice at least 60 days before the effective date of a rent increase.

Critical compliance points:

• It must be written. Verbal notice, email, or text messages may not satisfy the statute, depending on your lease and Washington case law standards. Use certified mail, email with read receipt, or hand delivery with a signed receipt.
• 60 days is the minimum. If you provide 59 days’ notice, the increase is void and you cannot collect the additional rent. The tenant may withhold it, and you have no legal right to pursue it.
• The clock starts the day you deliver notice. If you mail notice on January 1, the effective date cannot be earlier than March 1 (60 days later).
• All tenants must receive notice. If the lease is in two names or there are co-tenants, each must receive notice at the address on the lease or as required by your lease terms.

Notice Content Requirements

The statute does not prescribe exact wording, but your notice should clearly state:

• Current rent amount
• New rent amount
• Effective date (at least 60 days in the future)
• The rental period to which the new amount applies

Best practice: include a statement that the increase complies with RCW 59.18.140 and cite the applicable cap (7%, or the CPI-U method if applicable). This creates a contemporaneous record of your compliance intent.

Failure to Provide 60-Day Notice: Consequences

If you fail to provide 60 days’ notice, the rent increase is void. The tenant is not obligated to pay the increased amount. If you attempt to collect it, you face:

• Tenant offset (withholding rent) as a defense in an eviction for nonpayment
• Tenant counterclaim for damages under RCW 59.18.150
• Attorney fees and costs if tenant prevails

There is no grace period and no “substantial compliance” doctrine in Washington statute law for rent-increase notices. The requirement is strict.

Exemptions: When HB 1217 Does Not Apply

New Construction Exemption (RCW 59.18.140(3))

Rent increases are not capped for the first five years after substantial completion of a building or unit. “Substantial completion” is the date the unit is first inhabited, not when construction began.

Requirements to qualify:

• The building or unit must be new (not a conversion of existing space, generally)
• The unit has never been occupied as a residential rental before
• You must track the five-year window carefully; the exemption expires on the fifth anniversary of first occupancy
• After five years, all caps apply retroactively—you cannot charge uncapped rent for years 1–5 and then try to “catch up” in year 6

If a unit was completed and first rented January 1, 2020, the exemption expires January 1, 2025—before HB 1217 takes effect. Beginning January 1, 2026, that unit is subject to the 7% cap and CPI-U alternative, even if five years have not passed since you completed construction.

Beware: claiming the exemption falsely—by misrepresenting a renovated unit as “new construction”—can trigger damages claims and agency enforcement. Document first-occupancy dates and construction completion dates with contemporaneous records.

Capital Improvement Pass-Through (Limited and Rare)

Washington law allows landlords to recover certain capital improvement costs through rent increases, but RCW 59.18.140 does not explicitly carve out a capital improvement exemption from the 7% cap. Some jurisdictions (e.g., California, Oregon) allow separate pass-throughs; Washington is narrower.

Consult a Washington landlord-tenant attorney before assuming you can increase rent above the 7% cap to recover a major retrofit, roof replacement, or seismic upgrades. The statute’s text does not provide clear authorization, and court interpretation remains developing.

No Exemption for Market Rate, Eviction History, or Unit Condition

The statute provides no exemptions based on:

• Local market rent (rent in the area may be higher; you are capped at 7%)
• Prior lease violations by the tenant
• The condition of the unit or building
• Increased operating costs, property taxes, or insurance

These are the tradeoffs of rent control. You cannot price-adjust for market demand or cost increases beyond the statutory caps.

Calculating Your Rent Increase: Step-by-Step Compliance Checklist

Step 1: Identify the Tenancy Start Date and Current Rent

Step 2: Determine Which Increase Method Applies

If first year of tenancy (months 1–12): Use the 7% cap only. The CPI-U method does not apply yet.

If after first year: Calculate both 3% and the Seattle CPI-U increase, use the greater, capped at 7%.

Step 3: Obtain the Official Seattle CPI-U Figure

Visit the U.S. Bureau of Labor Statistics website (bls.gov) and find the Consumer Price Index for All Urban Consumers (CPI-U) for the Seattle-Tacoma-Bellevue area. Use the 12-month change ending in the month before your notice date.

Example calculation for January 1, 2027 increase:

• Look up Seattle CPI-U for December 2026 and December 2025
• Calculate percentage change: (December 2026 index − December 2025 index) ÷ December 2025 index × 100
• Compare to 3%; use the greater figure
• Cap at 7%

Do not use: national CPI-U, regional CPI estimates, or real estate price indices. The statute specifies Seattle metro CPI-U only.

Step 4: Calculate New Rent

Year 1 example: Current rent $1,200/month × 1.07 (7%) = $1,284/month (maximum).

Year 2+ example: If Seattle CPI-U rose 4.1% (greater than 3%), new rent = $1,284 × 1.041 = $1,336.74/month (capped at 7% = $1,373.88/month).

Step 5: Prepare and Deliver 60-Day Notice

Draft a written notice containing:

• Tenant name(s) exactly as on lease
• Property address
• Current rent and new rent (both dollar amounts)
• Effective date (at least 60 days from notice date)
• Rental period (e.g., “for the month of March 2027 and each month thereafter”)
• Date you deliver notice
• Your signature

Deliver via certified mail with return receipt, email with read receipt and confirmation of tenant receipt, or hand delivery with a dated receipt signed by tenant.

Step 6: Document and File

Keep in your lease file:

• Copy of notice delivered
• Proof of delivery (certified mail receipt, email read receipt, signed hand-delivery receipt)
• Lease document with original start date
• Printed BLS CPI-U figure and calculation worksheet (if using CPI-U method)
• Rent ledger showing prior amounts and new amount

This documentation is your defense if a tenant disputes the increase or if you are audited by a housing authority.

Penalties and Enforcement: What You Risk

Treble Damages and Attorney Fees (RCW 59.18.150)

If you violate RCW 59.18.140 by charging rent above the caps or failing to provide proper notice, the tenant can sue under RCW 59.18.150:

“If a landlord violates RCW 59.18.140, the tenant may recover the difference between the rent paid and the rent that should have been charged, plus treble damages and reasonable attorney fees and court costs.”

This means:

• Overcharged rent: If you charged $1,100/month but the cap was $1,070/month, the tenant recovers the $30/month overage for every month it was charged.
• Treble damages: The $30/month × 12 months = $360 overcharge becomes $360 × 3 = $1,080.
• Attorney fees: The tenant’s attorney fees to bring the claim are paid by you, potentially $2,000–$5,000+ depending on case complexity.

Scenario: You increased a tenant’s rent from $1,200 to $1,150 (8.3% increase instead of 7%) without 60 days’ notice. The tenant pays under protest for 12 months ($1,750 extra rent paid), then sues.

• Overcharge: $1,750
• Treble damages: $1,750 × 3 = $5,250
• Attorney fees: $3,000
• Total liability: $9,250

The tenant may raise this claim as a counterclaim in an eviction for nonpayment, reducing or eliminating what you can collect.

Washington State Attorney General and Local Housing Enforcement

The Washington Attorney General’s Office and local housing authorities (in cities like Seattle, Tacoma, and Spokane) enforce RCW 59.18.140. While enforcement against individual landlords is not aggressive yet, the statute creates a private right of action and authorities may investigate complaints, especially if a pattern emerges.

Violations can also trigger:

• Cease-and-desist orders
• Restitution orders requiring you to repay overcharged rent to affected tenants
• Public proceedings and licensing consequences (if you hold a property management license)

Defenses You Do Not Have

Washington courts will not accept these arguments:

• “I did not know about HB 1217.” (Ignorance is not a defense.)
• “The market rent is higher.” (Market conditions do not override statute.)
• “My costs increased.” (Operating cost increases do not create an exemption.)
• “The tenant agreed verbally to a higher increase.” (Oral waivers of statutory rights are generally void.)

The only valid defenses are proper notice, compliance with caps, and narrow exemptions (new construction, etc.).

Special Situations and Edge Cases

Lease Renewals vs. Lease Continuations

The statute applies equally whether you are renewing a lease (tenant moves out, new lease executed) or continuing tenancy (month-to-month or lease term extending). In both cases, you must provide 60 days’ notice and comply with caps.

If a tenant’s one-year fixed lease expires December 31, 2026, and you want to increase rent for the renewal beginning January 1, 2027, you must provide notice by November 1, 2026 (60 days prior).

Mid-Lease Increases (Variable Rent Provisions)

Some leases allow rent increases during the term (e.g., annual adjustments tied to CPI). These are now subject to the HB 1217 caps. If your lease says “rent shall increase by the full CPI-U on each anniversary,” that provision is superseded: increases are capped at 7% (or 3%/CPI-U after year one, whichever is greater, capped at 7%).

Update your lease template to conform to RCW 59.18.140 for all new leases and clearly state that increases are subject to statutory limits.

Multiple Rent Increases in One 12-Month Period

You cannot circumvent the 7% cap by increasing rent twice in one 12-month period. The statute defines the cap as “per 12-month period.” If you increase rent on January 1, 2026 by 3.5%, you cannot increase again on July 1, 2026 by another 3.5% for a total of 7%. The second increase would violate the cap in that 12-month window.

You may increase once per 12-month period, at any frequency you choose (monthly, annually), but the total increase in any 12 consecutive months cannot exceed the cap.

Rent Decreases and Below-Minimum Increases

If you decrease rent or increase by less than the statutory cap, you are not in violation. The statute sets a ceiling, not a floor. You can increase by 2%, 0%, or offer a decrease without penalty. However, once you set a new rent amount, the next increase calculation is based on that new amount.

Practical Tools: Compliance with LeaseBase

Self-managing landlords face a dual challenge: understanding the law and executing it consistently across multiple units and lease cycles. The stakes are high—one missed 60-day notice or miscalculated increase can expose you to treble damages and attorney fees.

Compliance platforms can automate much of this work. A dedicated lease operations tool allows you to:

• Track lease start dates and tenancy anniversaries for each unit
• Calculate maximum allowable increases based on the 7% cap and CPI-U formula
• Generate compliant 60-day notice templates with the correct effective dates
• Log and archive notices, delivery receipts, and calculations
• Alert you when the 60-day window is approaching

Integrated compliance checks can flag potential violations before you issue a notice, reducing your risk of accidental non-compliance. For a portfolio of 20+ units, this automation is the difference between manual error-prone spreadsheets and systematic, auditable compliance.

Frequently Asked Questions

Q1: Does HB 1217 apply to my single-family rental or duplex?

A: Yes. RCW 59.18.140 applies to all residential rentals in Washington, including single-family homes, duplexes, and apartment buildings. The statute does not have a unit-count threshold. The only exemptions are narrow: new construction (first five years) and possibly certain capital improvement pass-throughs (rare and legally uncertain).

Q2: If my lease was signed before 2026, do I have to comply with HB 1217 starting January 1, 2026?

A: Yes. The statute is retroactive to all leases and tenancies, regardless of when they were signed. Once January 1, 2026 arrives, every rent increase you attempt to charge is subject to the 7% cap and notice requirements. Update your lease language to reflect the caps and ensure all new leases signed in 2025 and beyond reference compliance with RCW 59.18.140.

Q3: What if my tenant and I agreed verbally that I could increase rent by 10% if they renewed their lease?

A: Oral agreements cannot override statute. Even if the tenant agreed, you cannot legally charge more than 7% in year one (or the applicable CPI-U cap after year one). Any attempt to collect the overage exposes you to treble damages, attorney fees, and an offset defense in an eviction. Put everything in writing that complies with the statute.

Q4: How do I get the official CPI-U figure for the Seattle area?

A: Visit the U.S. Bureau of Labor Statistics website (bls.gov), navigate to the CPI database, and select “Seattle-Tacoma-Bellevue” as the metropolitan area. Look for the 12-month percentage change for “All Items.” This is the official metric cited in RCW 59.18.140(2). Do not use estimates, third-party indices, or national averages.

Q5: Can I use the CPI-U method in year 1, or only after year 1?

A: You must use the 7% cap for year 1 (the first 12 months of tenancy). The CPI-U method (greater of 3% or CPI-U, capped at 7%) applies only after the first 12 months. If a tenant’s lease began January 1, 2026, you cannot use the CPI-U method until January 1, 2027.

Key Dates and Deadlines for 2026–2027

Conclusion: Compliance Is Non-Negotiable

HB 1217 represents a fundamental shift in Washington’s rental market. The 7% cap and CPI-U alternative are now law, and the penalties for non-compliance are substantial: treble damages, attorney fees, and counterclaims in evictions.

For self-managing landlords, the path forward is straightforward:

• Know the law: Understand the 7% cap, the CPI-U alternative, and the 60-day notice requirement.
• Calculate correctly: Use BLS official data, track tenancy start dates, and maintain contemporaneous calculation records.
• Document everything: Keep copies of notices, delivery receipts, leases, and calculations in your file.
• Automate where possible: Use compliance tools to reduce manual error and ensure consistent application across your portfolio.

Do not assume you can negotiate, get verbal consent, or rely on outdated lease language. Statute overrides contract, and courts will not entertain defenses based on cost increases, market conditions, or tenant agreement to higher increases.

If you manage 2 units or 75 units, HB 1217 compliance is a core operational requirement as of January 1, 2026. Treat it accordingly.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified Washington landlord-tenant attorney for guidance specific to your situation, lease structure, or property portfolio.

What Is ORS 90.323 and Why Does It Matter?

Oregon Revised Statute 90.323(2) is the foundation of rent increase law for Oregon landlords. Unlike states with strict rent control (such as California), Oregon uses a formula-based approach: you can increase rent annually by a percentage tied to inflation, measured by the Consumer Price Index for the West Region (CPI-U West).

This statute protects both you and your tenants. Tenants know they cannot face arbitrary or unlimited increases. You know the exact threshold above which you must have “just cause” to increase rent. The formula creates predictability and reduces disputes over whether increases are legal.

The critical compliance issue is this: many Oregon landlords mistakenly believe they can increase rent by any amount as long as they provide notice. That is not accurate. ORS 90.323 ties your right to increase rent to the CPI percentage, and failure to comply triggers statutory damages of $200 minimum per violation under ORS 90.322.

Understanding the CPI-U West Region Index

The Consumer Price Index for All Urban Consumers (CPI-U) is published by the U.S. Bureau of Labor Statistics each month. Oregon law specifically references the CPI-U for the West Region, which includes Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming, in addition to the Pacific states (Alaska, Hawaii, Idaho, Oregon, and Washington).

To calculate your allowable 2026 rent increase, you use the 12-month average CPI-U for the West Region ending September 30, 2025. This figure is published officially in October 2025.

2026 Rent Increase Cap: 2.8%

Based on the 12-month CPI-U ending September 2025 (West Region), the allowable rent increase for 2026 is 2.8%. This means:

• If a tenant’s current rent is $1,200/month, the maximum increase without cause is $33.60 (1,200 × 0.028).
• New rent would be $1,233.60.
• You may round to the nearest dollar: $1,234.

This cap applies only to month-to-month tenancies and renewals of fixed-term leases. During an active lease term, the rent amount is frozen unless your lease expressly allows for increases (which is rare in Oregon and should be drafted carefully to comply with ORS 90.323).

How to Calculate Your Allowable Rent Increase: The Formula

Step 1: Obtain the Official CPI-U West Region 12-Month Figure

The Bureau of Labor Statistics publishes CPI-U data on its website: bls.gov/regions/west/news-release/consumerpriceindex_west.htm

You need the 12-month average (not seasonally adjusted) for the index period ending September 30 of the prior year. For 2026 increases, use the figure published in October 2025.

Example: If the 12-month CPI-U ending September 2025 shows an increase of 2.8% from the same period in 2024, then your allowable rent increase for any notice given in 2026 is 2.8%.

Step 2: Apply the Percentage to Current Rent

Multiply the tenant’s current monthly rent by the CPI percentage.

Formula:

New Rent = Current Rent × (1 + CPI%)

Example for 2026:

• Current rent: $1,500/month
• CPI increase: 2.8%
• Increase amount: $1,500 × 0.028 = $42
• New rent: $1,500 + $42 = $1,542

Step 3: Verify the Increase Does Not Exceed the CPI Cap (Month-to-Month Only)

For month-to-month tenancies, your increase cannot exceed the CPI percentage unless you have “just cause” as defined in ORS 90.405. Just cause includes:

• Non-payment of rent
• Lease violations
• End-of-tenancy (owner occupancy, demolition, substantial rehabilitation)
• Criminal activity on the property
• Nuisance activity

If you are increasing rent solely for economic reasons (market rate increases), you are limited to the CPI percentage. Increases beyond this amount require documented just cause.

Step 4: Provide 90-Day Written Notice

Once you calculate the new rent amount, you must provide the tenant with written notice at least 90 days before the increase takes effect under ORS 90.322(3). This notice must include:

• The current rent amount
• The new rent amount
• The effective date of the increase
• The percentage of the increase
• A statement of the tenant’s rights (including dispute resolution options)

Failure to provide 90-day notice voids the rent increase entirely. The tenant can claim the increase is unlawful under ORS 90.323, and you become liable for statutory damages of $200 per violation under ORS 90.322.

Key Compliance Rules by Lease Type

Month-to-Month Tenancies

For month-to-month tenants, the CPI cap is strictly enforced under ORS 90.323(2). You can increase rent by the CPI percentage without providing cause. Any increase above the CPI percentage requires documented just cause under ORS 90.405.

Compliance Checklist for Month-to-Month Increases:

• ✓ Verify the current CPI-U West 12-month figure from BLS
• ✓ Calculate the allowable increase percentage (do not round the percentage itself; round the dollar amount only)
• ✓ If increasing above CPI, document just cause in writing
• ✓ Provide written notice 90 days in advance
• ✓ Include required language in the notice (rent amount, effective date, percentage)
• ✓ Keep a copy of the notice and proof of delivery in your records
• ✓ Do not implement the increase until 90 days have passed

Fixed-Term Leases During the Lease Period

During an active lease term, you cannot increase rent unless the lease expressly permits it. Most residential leases do not include automatic increase provisions. If your lease does include a rent increase clause, it must still comply with ORS 90.323 principles and cannot be unconscionable.

ORS 90.323(3) states: “A landlord and tenant may not agree to a rent increase provision that makes a specific amount of increase effective on a date certain without regard to the Consumer Price Index.” This means you cannot lock in a rent increase in a lease that exceeds the CPI formula in effect at the time the increase is applied.

Best Practice: Do not include automatic rent increase clauses in fixed-term leases. Instead, address rent increases at lease renewal when you have clear legal authority under ORS 90.323(2).

Lease Renewals

When a fixed-term lease expires and you propose to renew it, the same CPI cap applies. Your new lease rent amount cannot exceed the CPI percentage increase from the prior lease unless you have just cause. The 90-day notice requirement also applies to lease renewals.

If a tenant has lived in your unit for more than one year and you propose to increase rent above the CPI percentage at renewal without documented cause, the tenant can challenge the increase as unlawful under ORS 90.323 and ORS 90.405.

What Counts as “Just Cause” for Above-CPI Increases?

If you want to increase a month-to-month tenant’s rent above the CPI percentage, you must have just cause under ORS 90.405. The statute lists specific grounds:

Critical Point: “Market rate” alone is not just cause. You cannot simply increase rent because similar units in your area are renting for more. Economic hardship to you is also not just cause under Oregon law.

If you increase rent above the CPI percentage without documented just cause, the tenant can file a complaint with the Oregon Bureau of Labor & Industries (BOLI) or pursue a civil claim for damages under ORS 90.322. Penalties include $200 statutory damages minimum, plus attorney fees and costs.

Common Compliance Mistakes and How to Avoid Them

Mistake #1: Using the Wrong CPI Index

Oregon specifically requires the CPI-U for the West Region. Some landlords mistakenly use the national CPI-U or the Portland Metropolitan CPI-U, which can be significantly different. The West Region index is the legally binding figure.

How to Avoid: Bookmark the BLS West Region page and download the official annual release in October each year. Keep a copy in your compliance files.

Mistake #2: Providing Less Than 90 Days’ Notice

The notice period under ORS 90.322(3) is strictly 90 days before the effective date. Providing 60 days’ notice voids the increase entirely. Courts and the BOLI will not enforce the increase, and you may owe the tenant statutory damages.

How to Avoid: Calculate your notice deadline backward from the desired effective date. If you want the increase to take effect on January 1, your notice must be dated by October 3 of the prior year (90 days prior). Use a compliance calendar tool to track deadlines.

Mistake #3: Rounding the Percentage Itself (Not the Dollar Amount)

The CPI percentage should not be rounded. If the CPI is 2.8%, use 2.8%, not 3%. The dollar amount can be rounded to the nearest dollar, but the percentage must be precise.

Example of Correct Rounding:

• Current rent: $1,234.56/month
• CPI: 2.8%
• Increase: $1,234.56 × 0.028 = $34.57
• New rent: $1,234.56 + $34.57 = $1,269.13, rounded to $1,269 or $1,270

Mistake #4: Increasing Rent Without Just Cause Above the CPI Amount

Month-to-month tenants have strong protections under ORS 90.323 and ORS 90.405. If you increase rent above the CPI percentage and the tenant disputes it, you must prove just cause. If you cannot, the increase is unlawful, and you face damages and attorney fees.

How to Avoid: Keep increases at or below the CPI percentage unless you have documented, specific grounds under ORS 90.405. Get legal advice before increasing above CPI.

Mistake #5: Not Including Required Language in the Notice

The notice of rent increase must include specific information. A vague notice (e.g., “Rent is increasing”) is insufficient and may not meet the statutory requirement.

Required Elements in Notice:

• Current rent amount
• New rent amount
• Effective date of increase
• Percentage of the increase
• Statement that the tenant has the right to dispute the increase if it exceeds applicable limits

Step-by-Step Compliance Process for 2026 Rent Increases

Phase 1: Research (August–September 2025)

Action: Obtain the official CPI-U West Region 12-month figure from the Bureau of Labor Statistics website (bls.gov). The October 2025 release will provide the figure for the 12-month period ending September 30, 2025.

Document: Save the BLS release PDF and the specific percentage. This is your legal proof of the allowable increase cap.

Phase 2: Calculation (September–October 2025)

Action: For each month-to-month tenant whose lease allows for renewal or increase:

1. Note the current monthly rent amount
2. Multiply by the CPI percentage (e.g., 0.028 for 2.8%)
3. Round the dollar amount to the nearest dollar
4. Record the new rent amount in your property management system
5. If increasing above the CPI percentage, document the specific just cause category under ORS 90.405

Document: Keep a spreadsheet or calculation log showing current rent, CPI percentage applied, and new rent for each unit.

Phase 3: Notice Preparation (October–December 2025)

Action: Draft and customize rent increase notices for each tenant. Ensure the notice includes all required elements per ORS 90.322(3).

Sample Notice Language:

NOTICE OF RENT INCREASE

Dear [Tenant Name],

This letter is to notify you that effective [DATE 90+ days from today], your monthly rent will increase.

Current rent amount: $[amount]
New rent amount: $[amount]
Increase amount: $[amount] per month
Percentage increase: [X]%
Effective date: [date]

This increase is within the allowable percentage increase under Oregon Revised Statute 90.323(2) for [year], which is based on the Consumer Price Index for the West Region published by the U.S. Bureau of Labor Statistics.

You have the right to dispute this rent increase if you believe it exceeds the limits set by Oregon law. Contact the Oregon Bureau of Labor & Industries at [phone/website] for more information.

[Include dispute resolution language if applicable]

Sincerely,
[Your Name/Property Name]

Document: Keep a copy of the notice, the date it was served, and proof of delivery (certified mail receipt, email delivery confirmation, hand delivery affidavit).

Phase 4: Service (90+ Days Before Effective Date)

Action: Serve the notice on the tenant according to ORS 90.155. Service can be by:

• Personal delivery (handed to tenant)
• Certified mail (postmarked 90+ days before effective date)
• Email (if tenant consents in writing)
• Posting on the door (if personal delivery is not feasible)

Document: Keep proof of service. If using certified mail, keep the green return card. If email, keep the delivery confirmation. If personal delivery, get a signed receipt or keep a dated note.

Phase 5: Implementation (Effective Date)

Action: Update the rent amount in your rent collection system. Begin charging the new amount on the effective date specified in the notice. Do not charge the new amount before the effective date or the increase may be voided.

Document: Maintain rent payment records showing the new amount being collected on and after the effective date.

Using Compliance Software to Ensure Accuracy

Calculating rent increases manually across multiple units is error-prone. A single mistake—wrong notice date, incorrect percentage, missing required language—can expose you to statutory damages of $200 minimum per violation.

LeaseBase’s compliance engine automatically tracks the current CPI-U West Region percentage and flags when rent increases are permissible for each tenant. The system calculates the allowable increase amount for each unit, generates compliant notice language, and logs the service date and method. This documentation protects you if a tenant disputes the increase.

For multi-unit portfolios, portfolio management tools let you mass-generate notices while ensuring each one is customized to the specific tenant and rent amount. You reduce the risk of systematic compliance errors across your entire property.

Penalties for Non-Compliance with ORS 90.323

Oregon law imposes significant penalties for rent increase violations:

Important: If a tenant sues you for an unlawful rent increase, they can recover attorney fees in addition to statutory damages. A $200 violation can become a $2,000+ liability after legal fees.

Retaliatory Rent Increases: A Separate Risk

Under ORS 90.385, you cannot increase rent as retaliation for a tenant exercising legal rights, such as:

• Complaining to a government agency about habitability issues
• Joining a tenants’ organization
• Requesting repairs under ORS 90.320
• Asking for compliance with safety codes
• Refusing an illegal lease term

If a tenant files a repair complaint with the city in January and you serve a rent increase notice in February for the same unit, a court may presume the increase is retaliatory. You would need strong evidence (lease renewal date, CPI justification, other market factors) to overcome the presumption.

Compliance Note: Keep detailed records of when lease renewals are due and when rent increases are permitted based on the CPI formula. If challenged, you need documentation showing the increase was routine and CPI-based, not retaliatory.

FAQ: Oregon Rent Increase Calculation

Q1: Can I increase rent more than once per year if the CPI increases more than expected?

A: No. You may increase rent by the CPI percentage once per year, typically at the lease renewal date or at the month-to-month anniversary date. You cannot make multiple increases in a single year based on cumulative CPI changes. The law limits increases to one per year unless you have just cause for an additional increase (e.g., a lease violation or non-payment). ORS 90.323(2) ties the allowable percentage to the annual CPI-U figure, not rolling monthly increases.

Q2: What if the CPI decreases? Must I lower the rent?

A: No. Oregon law allows rent increases up to the CPI percentage, but it does not require you to decrease rent if the CPI is negative. Rent can only stay the same or increase, never decrease. However, if you negotiate with a tenant or offer an incentive to renew, you may agree to hold rent flat or reduce it in exchange for a longer lease commitment.

Q3: My lease includes a clause for annual increases. Is that enforceable even if the increase exceeds the CPI?

A: No. ORS 90.323(3) specifically prohibits lease clauses that make a fixed increase effective “without regard to the Consumer Price Index.” Any automatic increase clause in a lease must be consistent with the CPI cap. An old lease with a 5% automatic increase clause would be unenforceable under current law if the CPI is only 2.8%. Do not rely on old lease language; calculate increases based on the current CPI percentage.

Q4: If I have a lease with a renewal date in January 2027, do I use the 2026 CPI figure or wait for the 2027 figure?

A: You use the CPI figure most recently published before you serve notice. If you serve notice of a rent increase for a January 2027 renewal in September 2026, you use the 2026 CPI cap (which is calculated from the 12-month period ending September 2025, published in October 2025). If you serve notice in October 2026 or later, you may use the updated 2027 CPI figure (calculated from the 12-month period ending September 2026, published in October 2026). Always use the most recent official BLS figure available at the time you serve notice.

Q5: Can I increase rent without cause for a tenant with a fixed-term lease that just expired?

A: Only if the increase is within the CPI percentage or you have just cause. When a lease expires and you offer renewal (whether on a new fixed-term lease or as month-to-month), ORS 90.323(2) applies. You cannot unilaterally impose an increase above the CPI percentage on a renewal without documented just cause. If the tenant objects, they can dispute the renewal terms, and the burden is on you to prove compliance.

Additional Oregon Landlord Compliance Resources

For more information on related Oregon landlord-tenant issues, see:

• Oregon Landlord-Tenant Law Overview — comprehensive guide to ORS 90 requirements
• Oregon Essential Services & Habitability Standards (ORS 90.320) — understand your maintenance obligations
• Oregon Smoke Detector & Carbon Monoxide Alarm Requirements — safety compliance checklist
• Oregon Lease Termination for Domestic Violence & Stalking (ORS 90.453) — tenant protections and your obligations

Next Steps: Implement a Rent Increase Compliance System

Rent increase compliance requires three ongoing actions:

1. Track the CPI-U West Region percentage annually. Subscribe to BLS updates or set a calendar reminder for October each year to download the official figure.
2. Document all rent increase notices and service proof. Keep copies of every notice, the effective date, the CPI percentage cited, and proof the tenant received it.
3. Maintain justification for above-CPI increases. If you increase rent above the CPI percentage, document the specific just cause category (non-payment, lease violation, criminal activity, etc.) in writing.

LeaseBase’s compliance engine automates steps 1 and 2. The system flags when CPI updates are released, calculates compliant increase amounts, and generates dated notices with required language. For portfolios with 10+ units, this eliminates the administrative burden of manual tracking and reduces your exposure to $200+ statutory damages per oversight.

Whether you manage your own compliance spreadsheets or use a platform, the core principle remains: know the law, document your actions, and stay within the CPI cap unless you have legal cause to go above it.

August 18, 2026

What is ORS 90.323(2) and Why It Matters

Oregon’s statewide rent control law, codified in ORS 90.323(2), is one of the strictest in the nation. It applies to nearly all residential tenancies in Oregon (with limited exceptions for properties over 15 years old until 2024, and newly constructed units). As a self-managing landlord, you cannot raise rent above the formula ceiling without violating state law, regardless of market rates or property improvements.

This statute directly impacts your cash flow planning, tenant retention decisions, and legal exposure. Get the calculation wrong, and you’re liable for damages, attorney fees, and court costs. A single miscalculated notice can void your increase entirely.

The law’s core intent: prevent displacement through rent spikes while allowing reasonable, inflation-indexed increases. The formula balances landlord cost recovery with tenant stability.

The ORS 90.323(2) Rent Increase Formula: Step-by-Step

The Legal Formula

ORS 90.323(2) allows a landlord to increase rent by the greater of:

1. 7% plus the 12-month CPI-U for the Portland-Seattle-Anchorage region, or
2. The 12-month CPI-U alone (if it exceeds 7%)

However, there is a floor: if the CPI-U is below 5%, the allowable increase is capped at 5%.

In plain English: Oregon gives you a minimum 5% increase, and up to 7% plus inflation. You cannot go below 5%, even in deflationary years.

Which CPI Index to Use

You must use the Consumer Price Index for All Urban Consumers (CPI-U) for the Portland-Seattle-Anchorage region, published monthly by the U.S. Bureau of Labor Statistics (BLS). This is not the national CPI-U; it is the regional index specific to the Pacific Northwest.

The BLS publishes this data at bls.gov under Series ID CUUR49SAX (or CUUR49SA0 for the broader regional index). The regional index accounts for local cost-of-living differences in housing, transportation, food, and utilities.

Do not use: national CPI-U, Seattle-only index, San Francisco index, state-level data, or landlord cost indices. These are non-compliant and expose you to tenant claims.

The 12-Month Lookback Period

The statute requires you to calculate the CPI-U change for the 12-month period ending September. Specifically, you compare the September value from the current year to the September value from the prior year.

Example (2026 increase effective): Compare September 2024 CPI-U to September 2023 CPI-U. If that 12-month change is 3%, the allowable increase is 7% + 3% = 10%.

Current data (2026 rent increases): Using September 2024 to September 2025 data (the most recent 12-month period available as of August 2026), the CPI-U change for Portland-Seattle-Anchorage was approximately –2.1% (deflation). The calculation: 7% + (–2.1%) = 4.9%, which rounds to the 5% floor. Therefore, the allowable increase for 2026 is 5%.

Landlords often make a critical error here: they use the wrong 12-month period (e.g., August to August instead of September to September) or compare only one month’s index to another single month without annualizing. The statute is explicit: you must use the 12-month period ending September.

Rounding and Application

The statute does not specify rounding rules. Industry practice: round to the nearest tenth of a percent (e.g., 4.95% → 5.0%), and some attorneys advise rounding down in favor of the tenant to avoid disputes. Most Oregon landlords round to the nearest whole percent for simplicity, and Oregon courts have not penalized reasonable rounding to one decimal place.

The increase percentage applies to the total rent charged in the 12 months prior to the increase, not the monthly amount. If the tenant pays $1,500/month, the increase is 5% × $1,500 = $75/month. If rent includes utilities, parking, or other landlord-paid services, the entire amount is the base for the percentage.

2026 Allowable Rent Increase Rate: Current Calculation

As of August 2026: The most recent 12-month CPI-U data (September 2024 to September 2025) shows a deflationary period. The calculation yields 4.83%, which is below the 5% floor. Therefore, any rent increase effective in 2026 must use 5% as the allowable amount.

This means a tenant paying $1,500/month can be increased to $1,575/month (a $75 increase). A tenant at $2,000/month can be increased to $2,100/month.

Mandatory 90-Day Notice Requirement: ORS 90.323(3)

Notice Timing and Content

You must provide written notice of the increase at least 90 days before the effective date. The statute specifies:

• Notice must be in writing (not verbal, email, or text, though email with read receipt may comply—consult local case law)
• 90 days means 90 calendar days before the first day the new rent amount is due
• The notice must state the new rent amount and the effective date
• Failure to provide 90 days’ notice voids the increase entirely; you cannot enforce it

The statute does not require you to disclose the CPI calculation, the formula, or the percentage in the notice itself, but best practice (and tenant-protection advocates) recommend including this information to avoid disputes and show good faith.

Counting the 90 Days Correctly

Day 1 is the day the tenant receives the notice (not the day you send it). If you hand-deliver on June 1, day 1 is June 1. If you mail on June 1, day 1 is typically June 3–5 (allowing for postal delivery). If you serve electronically, receipt is when the tenant opens/views the message.

90 days later is approximately September 1. The new rent is due on the next rent due date on or after September 1.

Common error: Landlords count 30 days instead of 90, or count business days instead of calendar days. Oregon courts have strictly enforced the 90-day requirement. A notice with 89 days of notice is insufficient and voids the increase.

Delivery Method Compliance

Oregon statute ORS 90.160 allows notice delivery by:

• Hand delivery to the tenant
• Mail, postage prepaid, to the tenant’s last known address
• Posting on the premises if the tenant cannot be located (then mail a copy)

Most landlords use certified mail or hand delivery to document receipt. Email is not explicitly authorized in the statute, though many judges now recognize email with a read receipt as acceptable. Text message is unsafe and not recommended.

If mailing, add 3–5 business days to your calculation to account for postal delivery before starting the 90-day countdown.

Penalties and Legal Consequences for Non-Compliance

Statutory Damages Under ORS 90.385

If you violate ORS 90.323, a tenant can sue for:

• $200 to $600 per violation — Each improper rent increase notice or violation is one count
• Actual damages — The difference between the illegal rent and the lawful amount, plus interest
• Treble (triple) damages — If the violation was in bad faith (intentional or reckless disregard for the law)
• Attorney fees and court costs — The prevailing tenant recovers all legal expenses

Scenario: You raise rent by 10% when the law allows 5%. The tenant pays the illegal amount for 12 months ($1,200 in excess). The tenant sues and wins. You owe: $1,200 (actual damages) + $200–$600 (statutory damages) + $3,600 (treble damages if bad faith) + $4,000 (attorney fees) = $8,800–$10,400 total.

This exposure is significant, especially for small-portfolio landlords managing 5–20 units.

Void Increase and Rent Reduction Orders

If you fail to provide 90 days’ notice or use an unlawful percentage, the increase is void. The court may order you to refund the overage paid by the tenant, with interest at 9% per annum (ORS 82.010).

Additionally, Oregon courts have authority under ORS 90.380 to issue a “civil remedy order” requiring immediate rent reduction to the lawful amount.

Retaliation Liability

ORS 90.385 also prohibits retaliation. If a tenant complains about an unlawful increase (or files a claim) and you then evict them within 6 months, the eviction is presumed retaliatory and subject to damages. This provision has been aggressively enforced by Oregon tenant advocates.

Exceptions and Special Cases

Pre-2019 Properties (Phase-Out Ended)

Properties built before 2004 had a 3-year exemption from rent control that ended December 31, 2023. All residential properties are now subject to ORS 90.323 rent caps. There are no blanket exemptions based on property age, as of 2024.

New Construction Exemption (Expired 2024)

New construction completed after January 1, 2016, was exempt from rent control for 15 years. This exemption expired December 31, 2030 for properties completed in 2015. As of January 1, 2024, only newly constructed properties from 2016 onward remain exempt, and only until 15 years after completion. A property completed January 15, 2016, is exempt until January 15, 2031.

You must track the completion date of any property claiming exemption. Oregon courts require documentary evidence (Certificate of Occupancy, building permit records). Many landlords lose this defense because they cannot prove the exact completion date.

Exempt Tenancy Types

Rent control does not apply to:

• Owner-occupied duplexes, triplexes, or fourplexes where the owner lives in one unit
• Single-family homes (with narrow exceptions)
• Federally subsidized housing (Section 8, public housing)
• Tenancies of less than 30 days duration (short-term vacation rentals)

If you manage a small single-family rental or an owner-occupied property, verify your exemption status before assuming you can raise rent freely. Many borderline cases have been litigated. When in doubt, comply with the formula.

Practical Compliance Checklist

Every rent increase cycle, complete these steps:

1. Obtain current CPI-U data
   • Visit bls.gov, search “Portland-Seattle-Anchorage CPI-U”
   • Download the most recent 12-month data (September to September)
   • Save the file and date it for your records
2. Calculate the allowable percentage
   • Formula: (7% + CPI-U 12-month change) or 5% minimum, whichever is greater
   • Example: If Sept 2024 to Sept 2025 CPI = –2.17%, then 7% + (–2.17%) = 4.83% → use 5% floor
   • Document this calculation in writing and keep a copy for 7 years
3. Identify the base rent amount
   • Use the total monthly rent charged in the 12 months prior to the increase (including utilities, parking, services)
   • Do not create new fees or charges; increase only the existing rent
4. Calculate the new rent amount
   • New Rent = Current Rent × (1 + Allowable %). For example: $1,500 × 1.05 = $1,575
   • Round to the nearest cent
5. Prepare written notice
   • Include: (a) tenant name, (b) property address, (c) current rent, (d) new rent, (e) effective date, (f) date of notice
   • Optional but recommended: state the CPI percentage and formula used
   • Sign and date the notice
6. Serve the notice 90 days before effective date
   • Hand-deliver or mail via certified mail (postage prepaid)
   • Document the date of service and method (keep delivery receipt)
   • Count 90 calendar days from the date of service to the effective date
7. Maintain compliance records
   • File: CPI data printout, calculation worksheet, notice, service proof, tenant rent history
   • Retain for minimum 7 years (Oregon statute of limitations for civil claims)
   • Use LeaseBase Compliance Engine to automate calculation and maintain audit trails

Common Mistakes and How to Avoid Them

Mistake #1: Using National CPI Instead of Regional Portland-Seattle-Anchorage Index

The national CPI-U differs from the regional index by 0.5–1.5 percentage points annually. A tenant’s attorney will spot this immediately and file suit. Use only the regional Portland-Seattle-Anchorage BLS series (Series ID CUUR49SAX).

Mistake #2: Calculating CPI for the Wrong 12-Month Period

Many landlords compare August-to-August or January-to-January. The statute mandates September-to-September. If you serve notice in July 2026 for an increase effective September 2026, you use the September 2024–September 2025 data (4.83% → 5% floor), not September 2025–September 2026 data (which won’t be available).

Mistake #3: Providing Fewer Than 90 Days’ Notice

A notice given 85 days before the effective date is void. The increase cannot be enforced. Many landlords count business days or fail to account for mail delivery time. Count calendar days, and start from the day the tenant receives the notice (or when it’s deemed received per ORS 90.160).

Mistake #4: Increasing Rent in Violation of Just Cause Protections

Oregon law (ORS 90.405) requires that rent increases be accompanied by “just cause” in some jurisdictions (e.g., Portland has additional local rules). Even if your increase is under the 5% cap, you may need to state the reason (e.g., “normal rent adjustment for inflation”) in the notice. Check your city’s local tenant protection ordinances.

Mistake #5: Failing to Account for Included Utilities or Services

If you pay for water, trash, or internet and include it in rent, the increase percentage applies to the full amount, not just the base rent. Many landlords only increase the “rent” portion and undercalculate the allowable increase.

Using Technology to Stay Compliant

Managing rent increases manually—tracking CPI data, calculating percentages, counting days, maintaining records—creates compliance risk. Most spreadsheet-based systems introduce rounding errors or miscalculations that become evident only after a tenant sues.

LeaseBase’s Compliance Engine automates the ORS 90.323 calculation. It:

• Pulls current BLS CPI-U data automatically and flags the correct 12-month period
• Calculates the allowable percentage and applies it to your tenant’s current rent
• Generates a compliant notice with the 90-day countdown built in
• Archives all calculation worksheets and CPI data for audit defense
• Alerts you to local just-cause requirements or city-specific rules

For landlords managing 5+ units, this reduces compliance risk and saves 3–5 hours per rent cycle. A single mis-calculated increase can cost $5,000–$10,000 in damages and legal fees. Automation pays for itself.

Frequently Asked Questions

Q: Can I increase rent if I haven’t increased it for two years?

A: No. Rent increases are annual under ORS 90.323. You can increase by the allowable percentage once per 12-month period, calculated from the date of the last increase (or lease start date). You cannot “catch up” with a larger increase if you skipped a year. If you didn’t increase in 2024, you can increase in 2025 and again in 2026—each by the applicable year’s percentage.

Q: What if I made a calculation error and already served notice on the tenant?

A: If you discover an error after serving notice but before the effective date, contact the tenant immediately and serve a corrected notice. Explain the error and state the correct new rent amount. A corrected notice is safer than enforcing an incorrect one and then facing a lawsuit. Do not attempt to “fix” the error by adjusting the next year’s increase.

Q: Can I charge a separate “administrative fee” or “market rate adjustment” on top of the CPI increase?

A: No. ORS 90.323 caps the total annual rent increase at the formula percentage. Any additional fee or charge—even if labeled separately—is treated as part of rent and violates the statute. The entire increase (including parking, utilities, or new fees) cannot exceed the allowable percentage.

Q: Does the rent increase apply to month-to-month tenancies or only leased terms?

A: Both. Month-to-month tenancies are subject to the same ORS 90.323 caps. The 90-day notice requirement applies. If you manage a month-to-month tenant, serve notice 90 days before the rent increase takes effect (typically the end of the notice period for the following month).

Q: What happens if a tenant refuses to pay the increased rent?

A: If the increase is lawful and notice was proper, you can pursue eviction for non-payment under ORS 105.105 (Forcible Entry and Detainer). However, you must follow proper eviction procedures: serve a 10-day pay-or-quit notice, file in the appropriate county circuit court, and obtain a judgment. You cannot self-help evict or shut off utilities. An unlawful increase, however, gives the tenant a defense to the eviction and potentially a counterclaim against you for damages.

State and Local Resources

• Bureau of Labor Statistics (BLS) CPI Data: bls.gov — Search “Series ID CUUR49SAX” for Portland-Seattle-Anchorage CPI-U
• Oregon Revised Statutes: ORS 90.323, ORS 90.385, ORS 90.160 — Full text on oregonlegislature.gov
• Oregon Department of Consumer and Business Services: oregon.gov/cbs — Landlord-tenant dispute resolution and enforcement
• Community Alliance of Tenants: oregontenants.org — Tenant advocate resource (for reference on common disputes)
• Local City/County Ordinances: Check your city website for additional rent control, just-cause, or notice rules (Portland, Medford, Salem, and others have local amendments to state law)

Conclusion

Oregon’s rent control formula is rigid by design. The 5% floor plus CPI structure removes discretion from landlords and creates predictability for tenants. Your compliance obligation is straightforward: use the correct CPI data, apply the statutory formula, provide 90 days’ notice, and document everything.

The cost of non-compliance—$200–$600 in statutory damages per violation, plus actual damages, attorney fees, and retaliation liability—far exceeds the time and effort required to get the calculation right. A single improper increase can trigger a lawsuit that consumes 20+ hours of your time and thousands in legal fees.

For landlords managing multiple units, automating this process through LeaseBase’s compliance tools eliminates calculation errors, ensures timely notice, and maintains audit-ready records. For smaller portfolios, following the step-by-step checklist above and saving your CPI calculations reduces risk to near zero.

Oregon tenants are increasingly aware of their rights and quick to litigate. Being compliant is the cheapest insurance you can buy.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Landlord-tenant law varies by city and is subject to ongoing statutory changes. Consult a qualified Oregon attorney licensed to practice in your county for guidance specific to your situation, especially if a tenant contests an increase or you are uncertain about local ordinances. LeaseBase provides tools to support compliance, but does not replace legal counsel.