Whether you decide to renew or not to renew your lease with your current tenant it needs to be done with regard to local and state laws. Offering a lease renewal to your tenant is an easy way to encourage a great tenant to stay. If you decide not to renew the lease though, you must give an appropriate notice period clearly stating your intention of nonrenewal.
Additionally, it’s worth noting that even if you are going to be keeping the same tenant on with the exact same lease terms you will need to get them to sign a brand new lease. So, informing them of any lease changes (or lack thereof) will allow them to make an informed decision as to whether they wish to stay or not.
Quality tenants, those that are never late with their rent, look after your property and let you know in a timely fashion when maintenance works need to be carried out are worth holding on to. A tenant like this removes many of the stresses and worries that otherwise come with being a landlord.
As such it’s a good idea to extend to them an opportunity to renew their lease for another year. And, if the property is still suitable for their needs they are more than likely to accept and put off the hassle of moving.
On the flip side, you may desire new tenants or perhaps you intend to renovate the property to increase the rental value. Whilst you don’t need to give a reason for nonrenewal, should you decide that your tenant must move out at the end of their lease then you need to make this explicitly clear with a notice of nonrenewal. In most states, there are guidelines determining the required notice period.
What details to include in your lease renewal letter:
What details to include in your lease nonrenewal letter:
You can send the renewal offer as a letter, deliver it in person, or send it as an email. Whichever way you choose to deliver it make sure you have a copy for your written records.
It’s good practice to make the lease renewal offer 90 days before the expiry of the current lease. This gives you and your tenant 30 days to consider and decide upon whether or not they are moving out. Then if your tenants decide not to take the lease renewal offer you will have established they are leaving with 60 days remaining on the lease which you can spend searching for new tenants.
With a lease renewal letter, you can stipulate new terms or the exact same terms. Before you send the letter then make sure to give consideration as to the length of the new lease.
You will want to adjust your rental prices fairly to keep them in line with inflation and to make sure your rental prices remain competitive. If you do decide to adjust the rental amount give careful consideration as to the amount. Raising rents is one way to frighten off great tenants especially if you raise them too much and your property is no longer competitive.
In general if you don’t give adequate notice for renewal or nonrenewal then the lease will automatically switch to a month to month lease. Switching to a month to month lease at the end of the tenancy could work out well for both of you especially if their lease ends during a period which isn’t great for finding new tenants but you don’t want to necessarily lease to them for another full year.
It is imperative that you give both yourself and the tenant plenty of time to figure out what happens next. This is why we recommend sending a lease renewal letter 90 days before the lease expires. Make it clear that you expect an answer within 30 days. If you receive no response within those 30 days you have to consider that they have turned down the lease renewal offer.
Most states require landlords to give some kind of written notice to the tenant should they decide not to renew the lease. The lease renewal period is the timeframe before the end of the lease that the landlord or tenant must inform the other if they decide that they will not be continuing with a new lease. This renewal period should be spelt out in the current lease and should be in line with local and specific state laws.
The lease renewal notice period is usually between 30 and 60 days. However, it depends on the state the rental property is in. We recommend checking your local state laws.
Generally, if the landlord fails to give adequate notice stating that the lease will not be renewed then it will automatically transition into a month to month lease agreement. When you have a month to month lease agreement tenant and landlord need to give a written 30 days notice to terminate the lease.
* The actual notice period may vary from state to state so we recommend reviewing local state laws.
There are particular steps that landlords need to take to communicate their wish to either renew or not renew the lease. Usually, this requires some form of written notice (see the free templates connected to this article) and generally speaking with a notice period of 30 – 60 days depending on the state the rental is in.
Landlords don’t have to put a reason for nonrenewal of lease into that letter, just as tenants don’t have to give a reason if they turn down a renewal offer. State law protects both parties in this way. Once the original lease contract is over neither party are beholden to the other.
Should a tenant fail to vacate the property after the end date of the lease landlords should seek legal counsel, but it may require them to go through an eviction process to force the tenant to vacate.
If a landlord has determined to not renew the lease and given adequate notice in writing to the tenant they should not accept any additional rent payments or agree to any additional rental terms as this would be seen by the court as a default extension of the lease meaning the lease is now a month to month lease.
Landlords should be aware of and comply with their state laws when it comes to managing their tenants. They should clearly communicate their intentions with their tenants giving plenty of notice so that no one ends up in an awkward position.
If there are any complications regarding the tenancy or the lease it is recommended that landlords seek appropriate legal counsel from a licensed professional.
To help our landlords avoid missing the notice period for the end of their lease we have a feature that allows our landlords to set a reminder in the app a number of days before the lease is set to expire eg. 30, 60, 90 days.
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