Question about extending a lease agreement

8 Replies

Hello,

I have a lease agreement that ends at the end of May. The lease automatically renews to month-to month starting June. The property is in Houston, TX, and I am using the form CJM 186253v.6.

I want to give my tenants the choice of renewing the 12-month contract at the same monthly rent or stay at month-to-month at $100 higher (or $50 higher with 6-month contract).

I am planning to send them a courtesy text about these options, and ask them how they want to proceed. 

Then what to do next? How do I make it official? What paperwork to sign? I found the Texas Association of Realtors Form 2005, but I cannot use it because I am not a realtor.

Thank you in advance for your help.
-John

Hello John. Give the tenants 30 days written notice that month-to-month rent will increase and list the day the new rent will take effect. Give them a separate notice that if they would like to sign a 12-month contract you will let them lock in their current rate.

If they agree to a new 12-month contract then you can use the same contract you used in the past, if you are otherwise happy with it. Just change the start and end date and make sure the start date is after the end date of the current contract. If they do not agree to a 12-month contract then they may be about to move out so you should begin finding a new tenant happy to agree to a 12-month term.

Thank you @Eric Thomson . It sounds easy enough. Maybe I over thought things.

I really like my tenants and want them to stay, but I prefer that they sign a contract instead of staying month-to-month. So hopefully a $100 difference will push them to renew the 12-moth contact.

Well if they do decide to pay the extra $100 and go month-to-month, the old lease will no longer be valid since you are changing the terms, therefore, in that case, I would draft a Rental Agreement. It can contain all the same verbiage as the last lease, except for you will change the term to month-to-month and the rental amount. I would not want tenants living in my property without some sort of enforceable agreement.

Sharon Tzib, Real Estate Agent in TX (#653488)
832-745-8657

@John Truong

You do not have to draft a new lease for the month to month option unless you wish to do so.  You can just have an amendment to change the rental amount and everything else would remain the same

You can also use forms from the Texas Real Estate Commission website

512-293-3885

I just have one page giving options 1.  1 yr lease, no rent change; 2. m-t-m with rent change of 100$. 3.  Quit residence at the end of current lease term.  Followed by no other change of lease terms signed on (a previous date).    Ask tenant to initial their choice; and sign at the bottom.

For tenant I really like but want to go m-t-m due to uncertainty of  job transfer; or buying a house; I typically have a smaller rate increase (or no increase) with the understanding that they will help me to show the house for next tenant.  Some of them actually end up never move (and paid a higher rent); some of them did such a good job to stage the rental for showing.  

Talk to your tenants, find out what their needs are, and work out something halfway.  

Good luck.

Thank you @Sharon Tzib and @Greg H. for your suggestions. I think I can do a 1-page addendum/extension to the contract. It does not seem that the TREC website has a pre-made form that I need. TAR has one but but I am not an agent.

And thank you @Lynn Y. I can list a third option which is a 6-month lease with $50 increase. This would be considered as halfway, isn't it? :)  I will definitely talk to my tenants.

@John Truong TREC does not promulgate lease agreements, so you won't find those there. 

Yes, I suppose you could "technically" use an addendum, but when changing such major terms at the end of a lease term, I would be more comfortable with a new agreement. Addendums are great for mid-stream contract changes, but hey, to each their own. Do what you are comfortable with, and as always, no legal advice...... Good luck!

Sharon Tzib, Real Estate Agent in TX (#653488)
832-745-8657

Hi @Sharon Tzib ,

I had no clue that the change was major. I need to talk to my tenants first, then draft a new rental agreement so that everything is on paper and clear. I actually drafted a new contract on my first rental because we changed a few terms; I thought this second one would be easier. Thank you very much for your help.

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