What to do when you decide you aren’t renewing a lease
February 1, 2010
They never were much as tenants. The rent was always late. You had to serve them with seven notices during the year to correct one rule violation or another. The neighbors, your good tenants complained often (it seemed like at least once a month). So now the lease will be up and you are not going to renew it. What procedure do you use?
For every tenant who leases from you, rather than rents month-to-month, always make a notation on your calendar or planner 60 days before the expiration of the lease to deal with renewal. Some tenants you will want to renew, others you will send on their way.
At least one study has shown that people start thinking about moving 45 days before they actually get around to doing anything about it. Your bad tenants may see the handwriting on the wall and be planning to teach you a lesson and move out when the lease is up. Just don’t count on it. Sixty days before the end of the lease a notice from you to them allows you to get into their consciousness that they need to find another place to live.
You look at your planner one day and see that Jim and Judy Troublemaker’s lease expires in two months. Immediately you fill in the form that tells them they will be moving. Then you drop it in the mail to them. Every state has slightly different requirements for notifying tenants, so be sure you follow the ones for your state. But 60 days is plenty of time everywhere.
If you wait longer, or if you don’t even notify them at all, but wait until the lease expires, they will probably send the rent (on time possibly for the first time in months), hoping to avoid having to move. If you accept the rent, you are stuck with them for another month. If you don’t accept the rent, you are probably still stuck with them—but with no rent. Hence, the best thing to do is start early telling them to move.
You are under no obligation to renew a lease, unless there is a provision in the lease that provides an option for the tenant to renew (never put that in a lease), or something similar. Many leases have a clause that states that the lease reverts to a month-to-month tenancy after expiration absent any action otherwise.
About the Author: Bob Cain
Some 30 years ago Bob Cain went to a no-money-down seminar and got the notion that owning rental property would be just the best idea there is for making money. He bought some. Trouble was, what he learned at the seminar didn’t tell him how to make money on his rental property. He went looking for help in the form of a magazine or newsletter about the business. He couldn't find any.
Always ready to jump at a great idea, he decided he could put his speaking and writing skills to work and perform a valuable service for other investors who needed more information about property management. So Bob ferreted out the secrets, tricks and techniques of property management wherever he found them; then he passed them along to other landlords.
For over 25 years now, Bob has been publishing information, giving speeches, putting on seminars and workshops, and consulting for landlords on how to buy, rent and manage property more effectively.