Montgomery County Rent Increase Laws: Caps, Notice, and Exemptions

Montgomery County rent increase laws cap annual rent hikes on regulated units at the lesser of the local Consumer Price Index plus 3% or a hard ceiling of 6%. For the year beginning July 1, 2026, the allowable increase is 5.2%.¹ Landlords must give at least 90 days’ written notice, can raise rent only once every 12 months, and must tell you in the notice itself that you can ask the Department of Housing and Community Affairs (DHCA) to review any increase you believe is excessive.

How the Annual Cap Is Calculated

Each year the DHCA Director sets the maximum allowable increase by taking the Consumer Price Index for All Urban Consumers (CPI-U) for the Washington-Arlington-Alexandria area, adding 3 percentage points, and comparing that figure against a 6% ceiling. The lower number wins.² The rate is published on the county website and in the County Register before it takes effect, and the rate in effect on the date the increase begins is the one that governs, not the rate on the day the notice went out.

The cap only reaches regulated units. A unit is regulated if it is a county-licensed residential rental at least 23 years old and not otherwise exempt under Section 29-60 of the county code.³ If your building is newer than 23 years, the annual percentage cap does not apply to your rent.

Notice Requirements Your Landlord Must Meet

A landlord must give at least 90 days’ written notice before a rent increase takes effect. A late notice is not enforceable on its stated date. If it lands in your mailbox 60 days before the proposed effective date, the new rent cannot legally begin then.⁴

The written notice has to include:

Your current monthly rent, the proposed new monthly rent, and the percentage increase.
The exact calendar date the new rent begins.
A reference to the rent increase guideline published by DHCA.
A statement telling you that you can ask DHCA to review the increase if you believe it is excessive.

That last item matters. The notice itself is required to inform you of your review right, so if yours does not mention it, the notice is deficient.⁴

How Often Rent Can Go Up

Rent can be increased only once in any 12-month period, whether you are month-to-month or on a one- or two-year lease. On a two-year lease, that effectively means no increase for 24 months.¹ The 12-month clock starts on the effective date of the most recent increase.⁴ A landlord cannot stack several small increases to work around the annual cap.

The cap also follows the unit, not the tenant. Because the law limits increases upon lease renewal or a new lease, landlords cannot reset a regulated unit’s rent to an uncapped market rate when a previous tenant moves out.⁵

Banked Increases and the 10% Single-Year Ceiling

Landlords are not required to raise rent by the full allowable amount each year. Anything they leave unused gets banked against that specific unit and never expires.⁵ Banking also accumulates when the landlord skips an increase entirely or when a multi-year lease prevents mid-lease increases.

When the landlord eventually applies banked amounts, there is a separate hard limit: the total annual increase (standard allowance plus banked amount combined) cannot exceed 10% of your base rent in any single year.⁵ So if your rent is $2,100 and your landlord has banked $300 in unused increases over several stable years, the most your rent can go up in one year is $210. The remainder stays in reserve for future years.

Properties Exempt From the Cap

Section 29-60 lists the units that fall outside rent stabilization. The exemptions most likely to affect a tenant reading this:

Any county-licensed rental unit less than 23 years old.³
Units owned by an individual, or by the trust or estate of a deceased person, who owns two or fewer rental units in the county.⁶
Accessory dwelling units, including basement apartments and garage conversions.
Owner-occupied group houses.
Churches, synagogues, parsonages, rectories, convents, and parish homes.⁷
Licensed assisted living facilities and nursing homes.⁷

If your unit is exempt, the percentage cap does not apply to the size of your increase. The 90-day written notice requirement still applies to most residential rentals in the county regardless. The exemption removes the ceiling, not the procedural rules.

When Rent Can Legally Exceed the Standard Cap

Two paths let landlords go above the annual allowance. Both go through DHCA and both leave you room to see the paperwork.

Capital Improvement Surcharges

A landlord who makes significant physical upgrades (a new roof, upgraded plumbing, a building-wide security system) can petition the Director for a surcharge tied to those costs. Ordinary repairs and routine maintenance do not qualify.⁸ The limits depend on scope:

Building-wide improvements: cost divided equally among all units, spread over at least 96 months, capped at 20% of your base rent.
Improvements to specific units: cost divided among affected units, spread over at least 60 months, capped at 15% of your base rent.

The surcharge ends once the landlord has recovered the full cost, including interest and service charges. Improvements must be depreciable under the federal tax code, must protect or enhance tenant health, safety, or habitability, and must have all required permits. If the work produces energy cost savings, those savings must be passed on to tenants. Landlords have to keep plans, contracts, and permits on file and produce them on request.⁸

Fair Return Petitions

If a landlord’s operating costs have outpaced what the annual cap allows, the landlord can file a Fair Return Application with DHCA. Within five business days of filing, the landlord must notify every affected tenant by first-class mail and email and send a copy of the application, though not the supporting financial documents. The Director must issue a decision within 60 days of receiving a complete application, and if the request is approved the landlord must distribute the decision to affected tenants within 10 business days and post it in common areas.⁹ Any increase granted this way still needs 90 days’ notice before it takes effect.

If Your Increase Looks Wrong

Check the notice against the rules above. Is the percentage higher than the published allowable rate? Did you get fewer than 90 days? Has your rent already gone up in the last 12 months? Is required information missing, including the statement about your right to a DHCA review?⁴ Any one of these is grounds to challenge the increase.

Complaints go through DHCA’s online landlord-tenant complaint portal.¹⁰ Before filing, gather your lease, the rent increase notice, records showing what you currently pay, and any correspondence with your landlord. DHCA’s Landlord-Tenant Affairs office also helps tenants and landlords resolve disputes outside the formal complaint process.³

1
Montgomery County, Maryland. Amount of Allowable Landlord Rent Increase
2
Maryland General Assembly. Bill 15-23 – Landlord-Tenant Relations – Rent Stabilization
3
Montgomery County Department of Housing and Community Affairs. Department of Housing and Community Affairs
4
Montgomery County Code. Montgomery County Code Chapter 29 – Landlord-Tenant Relations
5
Montgomery County, Maryland. Rent Stabilization Increases and Limitations
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Montgomery County, Maryland. Rent Stabilization Exemptions
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Montgomery County Code. Montgomery County Code Chapter 29 – Sec. 29-60 Exempt Rental Units
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Montgomery County Code. Montgomery County Code Chapter 29 – Sec. 29-58 Rent Increases – In General; Vacant Units
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Montgomery County Code of Regulations. Montgomery County Regulations 29.59.01.05 – Processing of Fair Return Applications
10
Montgomery County, Maryland. Make a DHCA Complaint