Lease renewal

4 Replies

Hello
This one a the first time I am going to renew a tenant lease. Can I just do an addendum to the original lease stating all terms remain the same or should I do another whole lease contract ?
Thx

Hi, @Mohammad Sheatt . Does your current lease not have a renewal provision? If not I would recommend having a renewal provision. Here's ours, to help you:

2. LEASE TERM. The Tenant agrees to occupy said Premises for an original term commencing on [("move in date")] ending on [("lease end")]. The Lease shall automatically renew for month to month basis unless notice is given as stated in paragraph 7. 

7. MOVE OUT NOTICE AND RENEWAL. Unless another lease is signed by the parties hereto or unless written notice of termination is given by one party to the other at least 30 days before expiration of the lease, the lease shall be automatically renewed on a month to month basis. At least 30 days prior to due date, written notice of intent to move out must be given to the landlord. This means a full calendar month’s notice. All dates of termination must be the last day of that month. The tenant's move-out notice may not terminate the lease term or renewal period. The tenant's move out notice must terminate the lease on the exact day designated in the move-out notice. VERBAL NOTICE OF VACATE IS NOT SUFFICIENT.

So here is what happens with these provisions. We send out a letter a month before the original 12-month lease ends, asking if they'd like to renew for another 12 months and be bound by the lease as it stands. Usually, unless they are giving notice to move out, they say yes and they sign that letter as the extension of the lease for another year. The letter also refers to Section 7 of our lease and reiterates that they can let the lease renew month-to-month, but tells them there will be a slight rent increase for that. Sometimes they take that option because they're not sure what their plans are, and they pay the increase with the ability to terminate the lease at the next 30-day interval if they choose.

If you don't have any of this in place, perhaps add it to your standard lease and ask them to sign a new lease for the same term they have now so you'll have that issue handled for next time. Good luck and hope that helps!

Kim

Have you actually read the lease you are using? Please tell me that nothing has changed in the past twelve months, that your costs have stayed exactly the same so there is no reason for a rent increase, or there have been no tenant issues so nothing that needs revision or clarification in the lease?

Reviewing the lease first by yourself-in regards to that tenant and unit-then with the tenant to cover issue areas and rent increases is vital to ensure a good relationship remains. Simply pasting an addendum onto your lease suggests you care very little about the unit, the lease, the tenant or growing your business correctly.

Do you job man! Apply real business skills and knowledge to this; don't wait for things to go wrong and then ask yourself, "what happened?" Work it man!

New Lease, New rate, New addendums if they need to be added.

All sign and copies to all. Update all contact information with resident.

You need to give proper notice if your raising rent with renewal notice.. so know your lease,, and if it's a 60 day notice or 30 day notice period in your lease terms. if you don't want to renew you need to give notice for them your not renewing, same proper notice period.

Get a good property management book, take a class, you'll be glad you did.

Simply convert them to a new M2M lease including all changes.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here