Landlords have various strategies for handling a lease ending. Some landlords prefer to automatically renew the lease, unless the tenant gives notice they plan to move out.
None of my leases have automatic renewals, but I do require my tenants give 60 days notice of non-renewal, which gives me plenty of time to find a new tenant, which keeps my vacancy rate near zero and saves me time and money.
Remember to be fair, logical, and give tenants a renewal offer before the 60-day deadline. If you refuse to offer a renewal, let them know they must move out when the lease is up. The more time they have to plan, the less you risk an unlawful detainer.
Here are some tips for renewing the lease, including how to deliver 60-days notice to a tenant and how to ask them for a 60-day notice to vacate.
Don’t guarantee lease renewals
When reviewing the lease, applicants often ask if they’ll be able to renew it. I never guarantee an option to renew the lease. If, for whatever reason, I end up in a bad situation with a tenant, I like to have the option not to renew the lease.
Always answer the same way: “If you follow what’s in the lease, and I don’t have any other plans for the house, then of course, I’ll give you a renewal offer. But we’ll need to work it out when the time comes. If you want to guarantee your tenancy for a longer term, we’ll need to sign a longer lease.”
No state requires landlords to renew a fixed-term leases. Some tenant-friendly cities, including Washington D.C., give the tenant the right to go month-to-month after a fixed-term lease, with the same terms.
What about automatic renewals?
An automatic lease renewal is ideal for at-will tenancies, such as week-to-week, month-to-month, or year-to-year. However, I don’t think it’s appropriate for a lease with fixed terms (that is, a lease with set end-dates).
Automatic renewals have some negative consequences:
- The manager may not visit the property as often
- The landlord could forget about the renewal and miss an opportunity to raise the rent
- Many tenants forget about the date, too, and then want to abandon their lease at a later time.
That said, just because a lease automatically renews, doesn’t mean either party can’t terminate with proper notice.
Requiring 60-days notice of non-renewal
Even though fixed-term leases don’t automatically renew, landlords can still require tenants to provide 60-days notice, prior to the lease end date, of their intent to move out. If the tenant wants to renew the lease, a new lease must be signed.
The main benefit of asking for 60-days notice is that it guarantees landlords the time to find a new tenant. If the tenant fails to provide 60 days notice of non-renewal, they’ll still be held responsible for 60 days of rent, unless the landlord can find a new tenant sooner.
Here’s an example of a lease clause outlining the requirement to provide 60-days notice of non-renewal:
RENEWAL. This lease agreement is not constructed to be automatically renewed at the end of the term for which drawn, however the intent to renew this agreement by the Tenant(s) will be assumed. All parties will need to sign a new agreement in order to activate a renewal term. If Tenant(s) intends to vacate the Premises at the end of the lease term, Tenant(s) must give at least sixty (60) days written notice prior to the end of this lease. If sixty (60) days’ notice of non-renewal is not given prior to lease term, Tenant(s) are responsible for the equivalent rent amount due for the sixty (60) days after notice is given, even though this lease does not automatically renew.
Always send a reminder
Because this 60-day requirement is unusual, I try to remind my tenants of their 60 day responsibility at least a few weeks before that time, so they can start thinking about their options.
If I plan to offer them a renewal agreement, I will send the new terms to them with this reminder. Here’s the template for the renewal reminder email that I send:
Hi [Tenant Name],
I wanted to send a friendly reminder that your lease ends on 4/30, and your lease says that you need to let me know within 60 days of lease end if you don’t intend to renew the lease. You’ve been fantastic tenants, and I would love to have you sign for another year. If you’re interested in renewing, I can commit to not raising the rent.
If some of you want to stay, but others need to leave, you could bring in new roommates, and we can sign a new lease.
I want to put the date on your radar, since the end of the lease has a tendency to sneak up on people. Please let me know of your decision by March 1.
I’m available by phone or email if you have any questions.