Tenant Forgot To Exercise Option To Renew

11 Replies

I have a family currently renting one of my properties that had asked for the option to renew the lease for the first year. The lease had explicit language stating how to exercise the option, and it seems that they have forgotten to do so and missed the deadline. While they do pay on time, their month to month dealings have been pretty annoying and I would rather not renew. My attorney suggested starting a holdover petition at the end of the month, rather than giving them some sort of non-renewal notice. I'm wondering if this sounds right, and whether the tenants could try to counter us in court, and what your experiences are.

Originally posted by @Pauline Herschel :

I have a family currently renting one of my properties that had asked for the option to renew the lease for the first year. The lease had explicit language stating how to exercise the option, and it seems that they have forgotten to do so and missed the deadline. While they do pay on time, their month to month dealings have been pretty annoying and I would rather not renew. My attorney suggested starting a holdover petition at the end of the month, rather than giving them some sort of non-renewal notice. I'm wondering if this sounds right, and whether the tenants could try to counter us in court, and what your experiences are.

 If it isn't in writing, it doesn't count. Seems yo can do as you wish at this point. The court will look at Existing paperwork, not assumptions.

This is a good learning point. The way to stop issues like this is to address them before they come up!

Many Landlords include a renewal clause that basically gives the Tenant three options: 

1. Renew for an additional XX months at a rate of $XXXX

2. Convert to month-to-month at a rate of $XXXX

3. Move out at termination

If the tenant wants month-to-month, many Landlords will charge a higher rate. So a one-year lease may be at $1,000 a month but a month-to-month tenancy will be at $1,250 a month to offset the risk of a tenant leaving during the slow season.

Another important step: inspect the property 60 days prior to the lease ending. If you don't want to keep the tenant, hand them a letter that says you will not renew their lease and they are expected to be out by termination. If you do want to keep them, hand them a letter with the option of moving out, renewing for an additional year, or converting to month-to-month at a higher rate. The letter should also state that if they fail to respond, you will automatically convert them to a month-to-month at a higher rate.

Originally posted by @Pauline Herschel:

I have a family currently renting one of my properties that had asked for the option to renew the lease for the first year. The lease had explicit language stating how to exercise the option, and it seems that they have forgotten to do so and missed the deadline. While they do pay on time, their month to month dealings have been pretty annoying and I would rather not renew. My attorney suggested starting a holdover petition at the end of the month, rather than giving them some sort of non-renewal notice. I'm wondering if this sounds right, and whether the tenants could try to counter us in court, and what your experiences are.

My question is why did you not send them a non renew notice prior to the end of the lease if you do not want them as tenants. That would have been the smart business decision as opposed to taking advantage of their mistakes.

Is your problem that you are hesitant to manage your property.

Regardless I would choose the simplest route and get rid of them. Likely the non renew notice.

Thanks all.


I've just never been in such a situation before, and what's happened has happened.  What I'm worried about is:

(A) Not giving them a non-renewal notice and dealing with the eviction process, which could lengthen their stay in the unit.  

(B) Giving them a non-renewal notice and having them damage the property beyond what the security deposit is worth.  

I'd love to hear your advice.

Originally posted by @Thomas S. :

My question is why did you not send them a non renew notice prior to the end of the lease if you do not want them as tenants. That would have been the smart business decision as opposed to taking advantage of their mistakes.

Is your problem that you are hesitant to manage your property.

Regardless I would choose the simplest route and get rid of them. Likely the non renew notice.

Originally posted by @Pauline Herschel:
Originally posted by @Thomas S.:

My question is why did you not send them a non renew notice prior to the end of the lease if you do not want them as tenants. That would have been the smart business decision as opposed to taking advantage of their mistakes.

Is your problem that you are hesitant to manage your property.

Regardless I would choose the simplest route and get rid of them. Likely the non renew notice.

Thomas S. - Like my last quote said I'm worried about them being reckless the remainder of their stay.

"(B) Giving them a non-renewal notice and having them damage the property"

You have a business to run, you do not make decisions based on the very slim possibility of what might happen. If you do you will never make any decisions.

If you choose to operate out of fear renew their lease and live with it. This is a business.

So I've been managing my own rentals for almost 8 years now and I've only taken 1 month of vacancy on 8 units in that time... How might you ask? I have a REALLY good defense against tenants leaving. 


My lease says, in no uncertain words,

"Tenants are required to let me know, in writing, 60 days prior to the end of their lease if they're staying. If they don't I assume they aren't staying and automatically start renting their unit prior to them leaving."

This is Phase 1 of no vacancy. Phase 2 is every month when I collect rent and record my receipts, I check who is entering the renew window and I ping them. I tell them that they're in the window and have a couple days to tell me if they're staying or not.

These two measures have afforded me extreme unit uptime. Also, renting a unit while someone is actively living in it, prior to them packing to move, is infinitely easier than doing it while it's empty or a wreck with boxes.

If you're wondering why I took that one month down time it was because the tenants destroyed the apartment. I had to have it remodeled before it could be rented. 99.999% of the time this method works though. 

I just landed another 4 family this week bringing me up to 12 units and I plan on implementing this there as well. 

@Pauline Herschel Communication is key.  It's best to reach out to the Tenants and figure out what they are doing before you pursue litigation, and risk alienating them when they could've just forgotten.

If it were me, I would contact the Tenant and remind them that the option period has passed, so you assume they are moving out, and ask them to make it official in writing.  If they tell you that they planned on staying, then issue them the proper notice for non-renewal.

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