Do I need a new lease every year?

12 Replies

If a tenant chooses to renew the lease do I need to have the landlord and tenant sign it all over again if they are renewing the lease for 1 more year? It does say in the lease that it will automatically renew but wanted to see how everyone else does it if they rollover the lease or resign the next year.

@Nate M. I use an addendum to the original lease that changes the end date for an additional year if that's the only thing that changes. If I increase the rent or need to make any updates to my rental agreement (lease) with savvy clauses I might learn on BP, (after my attorney's approval) then I do a whole new lease.

Nate, it's best to sign a new one. You can have automatic renewals of a contract but you can have issues if they are not well thought out and drafted properly.

AR contracts mat renew for like terms if notice to terminate is not given, if either party misses that date either party could have regrets.

Your contract may have an escalation rent clause, fine, but what happens if some city ordinance or some common practice in your area changes, perhaps from some law suit, you can't modify you lease if it automatically renewed.

Any lease that can be automatically renewed beyond 3 years can trigger the due on sale clause of your mortgage too.

Automatic renewals may be viewed as a tenant having a first right of refusal by some judge, if any change is required it can be adopted and a tenant barks or they agree they may be viewed as first in line since they live there.

Some states cover the issue as well, so I'd suggest doing a new lease each year, for the cost of 6 or 8 pieces of paper it can make like easier. :)

I usually make a simple, one page lease renewal that refers to all terms of the original lease being the same and included. The only change is the rent amount is adjusted upwards. It also usually becomes month to month.

You can do the automatic renewal. But, it's better to sign a new one(it can be just the same lease before). This way you will always have the latest signature and latest date. Most importantly, tenant will be read through the lease again. This will remind them whatever they sign. Then, there is no excuse from the tenant that "oh.. I dont know about that".

Originally posted by @Richard Vang :
You can do the automatic renewal. But, it's better to sign a new one(it can be just the same lease before). This way you will always have the latest signature and latest date. Most importantly, tenant will be read through the lease again. This will remind them whatever they sign. Then, there is no excuse from the tenant that "oh.. I dont know about that".

Right on......

I personally just do a lease renewal addendum. It has the new start date, increase in rent price (if applicable) and a statement that everything else is unaltered. I do not do automatic renewals. I have started to add an a $300 extra charge for m-to-m as I want all my tenants on a lease. I have a very seasonal market, if the off times it is MUCH hard to rent, so I don't want m-to-m.

My leases are from 1 year then to month to month after that. I have started using a clause that requires each party to give 3 months notice to terminate in months of October through February.

I always do a brand new lease. It allows me to incorporate any lessons learned over the year to build a better lease. It usually takes 10 minutes to clean up the dates; price etc. and use the best possible strongest most updated lease you have. Well worth it; just in case some day.

Hi, I just found this board. My question is regarding my tenant's renewal: It seems a new lease is a safer option. In that case, what do you do in the deposit section? Do I leave it blank? I have their deposit from last year. If so, then the "move-in costs" section will also be blank.

Also there is a clause with "tenant will provide landlord a list of items that are damaged or not in operable condition" but that applies to last year, supposedly now, they would have let me know had anything broken. Same things with "landlord shall provide tenant with a copy of the rules and regulations" or "tenant acknowledges receipt of keys"--it seems those items don't belong in this year's lease, but last year's, but I am not sure if I should write something for this year's lease.

Last year two addenda were signed: mold and ventilation, and pets. I guess I need to pass those two, along with the new lease.

I don't want to write something that invalidates last year's contract, hence my asking :)

Thank you!

A  6-8 month to 1 year lease for first year, whatever to get through the winter hard times to rent. Then m2m that terminates on a specific date, a year later. That way I can make any changes I want. I continually update my leases throughout the year, on the computer. When it's time to sign a new one make sure the dates and rent prices are correct and hit print.

new lease on anything that's not month to month.. 

Join the Largest Real Estate Investing Community

Basic membership is free, forever.