When your lease term with a tenant is coming to an end, it’s time to consider renewing the lease. If you are interested in offering your tenant a lease renewal, you are committing on your end to another lease term in which the tenant resides in your rental property. Although a lease renewal does not always come to fruition, there are many benefits to renewing a tenant’s lease.
The Benefits of Renewing a Tenant’s Lease
If you choose to offer your tenant a lease renewal and they accept, you can avoid having to search for a new tenant. Because you already have a good tenant living in your rental, you won’t have to worry about marketing your rental, screening tenants, or touring your rental property with potential tenants. If the landlord-tenant relationship is in good standing, it’s in your best interest to offer the tenant a lease renewal.
How to Offer a Lease Renewal to Tenants
To offer a lease renewal to tenants, you can simply ask if they want to renew their lease. This can be done through email, in person, or by letter. Check your state laws for any requirements before sending a lease renewal.
What do I include in the lease renewal letter?
A lease renewal notice should include the date the letter is sent, the property address and tenant name(s), whether the lease will be renewed, and how to contact you (the property owner or manager) with questions. The letter should also remind tenants of the day their lease expires, their lease length options if they choose to renew, and the new cost of rent if they were to renew.
Although you don’t have to change the cost of rent when offering a renewal, it’s standard practice to base your rent on market conditions, which often warrant a small percentage increase in rent every year.
How far in advance should I send the offer?
It’s time to think about lease renewals as early as 90 days before the lease-end date. In fact, it’s recommended to offer a lease renewal notice to tenants 90 days before the lease expires. This time frame gives tenants 30 days to respond to the offer before the countdown begins for them to submit the required 60-day notice of non-renewal.
A tenant’s notice of non-renewal is to inform you, the landlord, that they will not be renewing their lease and will move out of the property by the lease-end date. It’s recommended to require this notice at least 60 days before their lease-end date for long-term leases. This gives you plenty of time to find a new tenant and will help your property avoid sitting vacant after the current tenants moves out. Short-term leases, such as month-to-month agreements, typically require a 30-day notice period. Check your state laws for more information on lease renewal regulations.
Do I Have to Renew a Tenant’s Lease?
Although there are benefits to offering tenants a lease renewal, it is not required. If the landlord-tenant relationship is not in good standing, it may be in your best interest to part ways after the lease term ends. A tenant who has caused major property damage, has multiple noise complaints, or consistently pays rent late will fall under this category.
Although most states don’t require the landlord to provide a reason for non-renewal, it’s best to check your local laws before making any final decisions. For instance, a local public housing authority (PHA) will determine rules for lease terminations for Section 8 properties. Landlords also cannot under any circumstances deny a lease renewal as an act of discrimination or retaliation.
How to tell a tenant you’re not renewing the lease
If you decide to not renew the lease, you will need to give the tenant proper writer notice. This notice, known as a lease termination letter, should be given in the same manner as the lease renewal letter: at least 90 days before the lease-end date.
You may also want to send a move-out letter a month before the lease ends to remind the tenant of the date they need to have all of their belongings moved out of the property, along with any other expectations.
Offer a Month-to-Month Lease Agreement Instead
When sending a lease renewal offer, you have the option to include more than one lease length. For instance, if the tenant’s 12-month lease is coming to an end, you will be offering them another fixed term lease of 12 months. However, you may also offer them other lease lengths, such as a six-month lease or even a month-to-month lease. Having options will potentially sway the tenant to renew their lease, especially if they want to temporarily stay in the unit.
If you both agree to a month-to-month lease, be aware that either party can end the lease at any time with proper written notice. With a month-to-month lease, the standard notice period is typically 30 days.
Although a month-to-month lease agreement may not be what you were hoping for, it’s better than not renewing the lease at all and losing a good tenant. After all, tenant retention is the goal. Because you are offering the tenant a flexible solution, it’s common to raise the rent for month-to-month leases, which is another benefit of this option.
How to Renew Your Lease on Apartments.com
Lease renewals are available for property managers and owners who have listed their rental property on Apartments.com.
If your current lease-end date is near, it’s time to decide your next step. Once you’ve logged into your account, select Resident under Rental Tools. Select View Details for the resident you are renewing with. Here you'll find your current lease term, resident information, lease documents, payments, and more. Where your current lease term is displayed (at the top of the page), there will be a label warning you that your lease is ending soon (in the next 90 days).
To renew your lease, simply click Edit Lease Term. You will then be able to choose between: renew lease term, switch to month to month, or edit existing dates. If you and your tenant have agreed to renew the lease, you will choose to renew the lease. If you will not be renewing the lease, you can select an alternative option like switching to a month-to-month lease. If you made a mistake and need to alter the lease end date, or if your tenant needs to end the lease early, you can choose to edit the existing term dates.
Next, you will be able to update the renewal length or add a custom end date to the lease term, as well as update the cost of rent and the day it's due, if necessary.
Once you select Continue, you will be prompted to choose between a lease renewal document, where you can make changes and add stipulations, or a brand new lease document. Both of these options are entirely free, crafted by lawyers, and region compliant.
Once completed, the lease renewal document will be sent to your tenant(s) and signed electronically. Your signature will finalize the document.
Lease renewals are not required, but if you have a good tenant currently renting your property, there are benefits to offering one. Remember to send your lease renewal letter with plenty of notice so your tenant has time to make a decision. Hopefully they will agree to the terms of the lease renewal and you will be on your way to having a long-term tenant.
