What is a right way not to renew lease with a problem tenant?

Question

I have a problem tenant who is extremely annoying and creates many problems for other tenants. For example, he made a huge deal about a sublet in another apartment, which is none of his business. He pays rent on time. What are my options? I don’t have a good reason to terminate the lease. What about the lease for next year? Should I write that I won’t renew it? Should I state any reasons? Can I just increase the rent to some unrealistic amount (there's no rent control in my state)? What is the right way to handle this?

Nathan Gesner · Answer

Some states only allow termination for specific reasons, but most states allow you to non-renew for any reason. Check your state laws to see what is permitted. If you don't know how to find that, let us know what city/state you are in and we can try to help.

You can't violate Fair Housing laws, but there's no law that says you have to keep chronic complainers.

This is one more reason why you need to keep your rentals at market rates, or close to them. When you rent below market, you get tenants of below-market quality. They don't want to leave because they're saving money renting from you.

Drew Sygit · Answer

I wouldn't tell a tenant months & months before their lease is up that we weren't going to renew it.

Then, they have "nothing to lose"! They may even stop  paying rent.

Follow your lease's renewal language and wait until you have to legally tell them.

Nathan Gesner · Answer

Don't leave any question unanswered. If you don't want to renew their lease, say so in writing so there is no confusion.

If you want them gone now, you can try asking them to leave. You'll be surprised how many people are willing to break a lease early and move on! For example, you could tell them that they don't appear happy with the rental and offer them a one-time early termination without penalty, as long as they leave within the next 30 days. Make them agree in writing! If they choose to stay, ignore their complaints and then send them a non-renewal notice when the time is right.

Wesley W. · Answer

FIRST: This is ALL dependent upon your state and local statutes, so make sure you know what you are permitted and not permitted to do in your market with regards to terminating a lease.

And your post is written by someone different about once a week here on BP.  This is reason #42 why I only offer MTM leases.

Now that that is out of the way, if they are on a term lease, just give proper notice to terminate based on your lease verbiage and local laws(!).  Many markets allow landlords to terminate a lease (i.e. not renew) for "any reason or no reason."  I would NEVER, EVER offer up a reason to a tenant - minimally, you'd be subjecting yourself to an unsolicited argument/negotiation, and could be opening yourself up to a discrimination claim or other such legal entanglements.  If pressed, I would only offer "we made a business decision", but even that is going to prolong a conversation you would prefer not to even have.  If they are on a MTM lease, you can terminate now with proper notice, as that contract renews monthly.The RIGHT way to handle this is to issue a legal notice to terminate as soon as you are able, and continue to conduct yourself in a professional manner with this tenant.  You also should prepare yourself (financially and otherwise) for this tenant to holdover at the end of the term.  Just make sure you have your attorney ready to go to initiate a summary proceeding to evict as soon as they do not vacate.

I would not try and drive them out with an unrealistic rent increase.  That may backfire, and it will only antagonize the tenant when they realize no one else in the building got anything near a high a raise (see "discrimination lawsuit" exposures, above).

Others may disagree, but I am with you.  Life is too short to have to put up with these kinds of people in this business, even though this may cause you a short-term interruption in revenue.  Months from now, you will be glad you did.

Good luck.

Dan H. · Answer

I am in a tenant friendly state.  I typically get rid of undesired tenants by raising their rent above market rent.   They may think I am clueless to market rent, but I do not give a $hit.

Tenant typically provides notice when they get the rent increase.   This accomplishes the goal without any worry that they can claim anything against me as they gave notice and decided to not renew the lease at the offered terms.

I am unsure that I would bother in less tenant friendly areas but suspect I would as the tenant typically has less resentment when they choose not to renew the lease than having LL not renew the lease.

Good luck

Cody Journell · Answer

@Linda Roberts I second the above. From a property management co owner we don’t need any reason not to renew someone’s lease. If they do inquire we just say we have plans for an extensive reno or the owner is requesting the unit emptied. If you have the clause we use in your lease we are able to give 60 days notice of cancellation after a certain period of time.

Linda Roberts · Answer

Thank you @Nathan Gesner The tenant doesn't want to move out because he can't find equivalent living arrangements at this price. If I don't renew his lease without cause, but he knows that I renewed the leases of other tenants in the house, could this be considered discrimination? If he starts asking questions about why I don't want to renew his lease, do I need to provide any answers?

Thank you.

Linda Roberts · Answer

Thanks @Wesley W. for the detailed reply. The reason I don't go with MTM is that rent in my area is very seasonal. If I don't rent from July to September, all the qualified candidates will be gone.

Theresa Harris · Answer

I agree with the others.  I'd simply say you are not renewing the lease and leave it at that.  Make sure you put it in writing and give them the proper notice. You may want to get them to sign a copy of the notice as well.

What is a right way not to renew lease with a problem tenant?

Most Popular Reply