Tenant hasn't renewed the lease on time - What to do?

5 Replies

My current tenant's lease expires at the end of the month. The due date to renew the lease was due the first of the month though, tenant has yet to submit a response on whether they will be staying past the lease terms on a month-to-month basis or whether they will be vacating. What's the best way to get a response from your tenant?

Maybe there's a standard letter or some sort of verbiage that I can send out to ensure that we will not be renewing the lease and that they have to now inform us on whether or not they intend to stay on a month-to-month.

Any ideas ?

Hi @Mark Belenky !  Your best move would likely be to decide on their behalf. If you send them a Notice of Non Renewal of Lease it will be either a proactive form to send OR a kick in the pants for them to make up their mind and communicate their intentions. 

If you are within 30 days or less of lease expiration, and they haven't given notice to vacate, they should still be liable for the rent next month. The logic is that if they give 30 days notice today, 30 days out puts them past the expiration date. Does your lease have a month-to-month clause? Something that gives you a right to increase the rent? You need to give notice ASAP of what the new MTM rate will be. That way they will have more incentive to sign before the lease expires, because your renewal rate should be less expensive than the MTM rate. Or, if they don't sign, you are charging them more.

Check your state's laws for how much notice you must give in case of rent increase.

@Anna Sagatelova @Will Fraser   - Thank you very much for your response to my question.  I do have a M2M term should a tenant not renew their lease and would require an additional month or longer.  Coincidentally; just as I posted my question on this forum, I received an email from the tenants who have requested to renew their lease and how we can add an additional applicant.  I've provided them with the requested instructions and I've responded with what you were alluding to Anna, we will need to have the lease signed and submitted no later than COB end of week otherwise we will be going on a M2M term, which then they agreed to comply.

Again, thank you both.

@Mark Belenky another option to help with this scenario going forward is to have a hold-over clause in your lease.  This clause essentially states that if the tenant does not renew, and does not vacate, you can charge them holdover rent, which in my experience is typically 150% of lease rent.  This gives them the incentive to sign the lease, and you are always able to take them to month to month at more reasonable terms, with an amendment.  

Holdover also lets you collect more if a tenant won't renew or move out and you have to evict.

I cannot speak as to whether this language is legal in all municipalities, but I have it in my lease to protect against non-renewal.

Our tenants have options.  Renew lease,  or it converts to month to month at a % increase if they do not sign new lease. We also charge a fee if they sign in last 30 days, but waive that fee if they sign prior to the 30 day mark.