Montgomery County rent increase 2026 VRGA for FY 2026 (Jul 2025 – Jun 2026) is 5.8%. Lower of CPI-U for DC MSA + 3% or 6%.

The FY 2026 cap, in one paragraph

Mont. Co. Code §29-53(b) sets the VRGA each fiscal year as the lower of two numbers: the Consumer Price Index for All Urban Consumers (CPI-U) for the Washington-Arlington-Alexandria DC-VA-MD-WV MSA, 12 months ending the prior April, plus 3 percentage points; or a hard ceiling of 6%. For FY 2026 the CPI reading produced a formula output of about 5.8%, which falls below the 6% ceiling and is therefore the published cap. The Department of Housing and Community Affairs (DHCA) publishes the figure each June for the fiscal year beginning July 1 — landlords serving notice today should be working from the published 5.8%, not their own CPI calculation.

FY 2025 (July 2024 – June 2025) was 6.0% — the cap hit the ceiling. FY 2024 (July 2023 – June 2024) was 5.8%. Bill 15-23 came into effect mid-FY 2025, with rent increases served after July 23, 2024 governed by the new statutory cap; pre-Bill 15-23 notices remained governed by the prior, non-binding rent guideline. The next refresh, FY 2027, will be published around June 12-19, 2026 (DHCA's typical mid-June schedule) and apply to notices served for effective dates on or after July 1, 2026.

What's covered and what's exempt under Bill 15-23

Bill 15-23 covers nearly every rental unit in Montgomery County, with four narrow exemptions at §29-53(a):

• 23-year new-construction exemption. A unit's building must have received its first certificate of occupancy at least 23 years before the rent increase's effective date. So a building that received its CoC on May 1, 2003 became covered May 1, 2026; a building with a 2010 CoC remains exempt through 2033. The exemption is anchored to the building, not the unit or the tenancy.
• Subsidized housing. Units in projects regulated by HUD, Maryland DHCD, the Montgomery County Housing Opportunities Commission, or other federal/state/county programs operate on their own rent rules.
• ADUs in owner-occupied homes. An accessory dwelling unit (basement apartment, in-law suite, detached ADU) where the landlord lives in the principal dwelling is exempt. A non-owner-occupied SFR rental is covered.
• Short-term rentals. Units rented for fewer than 30 consecutive days at a time are not covered (this exemption is meant for transient lodging, not month-to-month residential leases).

The 23-year exemption is the most-litigated carve-out. It shifts annually as the calendar advances against fixed CoC dates — every July 1, a cohort of buildings that were 22 years old becomes 23 and joins coverage. The audit trail is the building's original certificate of occupancy and Maryland Department of Assessments and Taxation property record. The Montgomery County calculator walks the four exemptions in order and either returns the FY 2026 5.8% cap or surfaces the exempt status with the controlling subsection.

The 90-day notice and §8-208 service rules

Mont. Co. Code §29-53(d) requires 90 days written notice for any rent increase on a covered unit. The notice must specify:

• The current rent and the new rent in dollars.
• The dollar increase and the percentage increase.
• The cap percentage being claimed (5.8% for FY 2026 effective dates), with citation to §29-53(b).
• The effective date — at least 91 days after tenant receipt.
• A statement of the tenant's right to file a complaint with the Office of Landlord-Tenant Affairs.
• The landlord's name, address, and signature.

Service rules track the Maryland Real Property Article §8-208 — personal delivery, certified mail with return receipt, or first-class mail with proof of mailing. The 90-day clock runs from receipt for personal delivery or certified-mail return-receipt-signed; for first-class mail with proof of mailing, §8-208 applies a 3-day mailing presumption (so a notice mailed on April 1 is presumed received April 4, and the 90-day clock starts April 4 — earliest effective date is July 4). Email service without express lease-clause consent is not §8-208-compliant.

The 90-day floor cannot be shortened by lease agreement. Any lease clause purporting to authorize shorter notice is void under Maryland Real Property Article §8-202.1 (unconscionable lease terms). The free Montgomery County notice generator emits a printable §29-53-compliant notice with the cap percentage, the 90-day effective-date math run against the service method, and the §8-208 mailing-add applied.

12-month frequency rule and the no-banking provision

Mont. Co. Code §29-53(c) bars more than one rent increase in any 12-month period for the same unit, regardless of tenant turnover or lease renewal. The 12 months runs from effective date to effective date. So a notice with an effective date of August 1, 2026 means the next increase on the same unit cannot take effect until August 1, 2027.

Banking is explicitly forbidden. Each fiscal year's VRGA stands alone — there is no carry-forward, no accumulation, no stacking. A landlord who took 0% in FY 2025 cannot stack last year's available 6.0% on top of FY 2026's 5.8% — the next notice still gets 5.8%. This is a sharper rule than DC's §42-3502.08(g)(2) (which permits banking subject to the 12-month frequency cap) and aligns with NYC's no-banking stabilization regime under 9 NYCRR §2522.5.

The practical implication: landlords in Montgomery County should take every available VRGA increase as it comes. Skipping a year does not preserve the percentage for later use; it simply forfeits that year's allowable increase. The Montgomery County calculator runs the 12-month frequency check against the last-increase date and either returns the 5.8% cap or surfaces the next-eligible-effective-date.

What happens if you overshoot 5.8%

The penalty structure under §29-58 and §29-59 has four prongs:

1. The notice is unenforceable to the extent of the overage. The tenant can refuse to pay the over-cap portion; the prior-rent-plus-5.8% remains the lawful rent.
2. Restitution of the overcharge — every dollar paid over the lawful ceiling, recoverable by the tenant.
3. Civil penalties up to $1,000 per violation under §29-59. A pattern of overcharges across multiple units can escalate quickly.
4. Attorney's fees awarded on prevailing tenant claims. The Office of Landlord-Tenant Affairs (OLTA) can issue compliance orders and refer to the Montgomery County Attorney for enforcement.

Beyond the dollar exposure, an overcharge finding triggers building-wide audit. OLTA will request rent rolls and lease files for every unit in the portfolio. Landlords who guess at the cap routinely surface multi-unit overcharges in the subsequent audit, and the cumulative civil-penalty exposure dwarfs the original overcharge.

How RentCeiling enforces VRGA 5.8% for you

The free Montgomery County calculator takes (current rent, building first-CoC date, last-increase date) and returns the FY 2026 5.8% lawful max with the §29-53 citation, the 23-year new-construction check, and the 12-month frequency verification. The Montgomery County notice generator consumes the same inputs and emits a printable §29-53 notice with the cap percentage, the §8-208 service-method-aware effective-date math, and the right-to-complain disclosure. The four-California-rent-caps explainer covers a different jurisdiction but shows the same statute-then-math-then-notice discipline that Bill 15-23 demands. The /compare hub shows how Montgomery County's 5.8% sits between DC's 4.1% standard and Oregon's 9.5% — useful context for Maryland landlords with DC-area portfolios. Open rule-set at /rules/index.json.

Run the Montgomery County FY 2026 calculator (free)

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