As a lease agreement comes to an end, the landlord has to decide whether he wants to renew the contract or not. If the tenant pays the rent on time, takes care of the property, and has been a good renter, the landlord may decide to offer him a lease renewal letter. Issuing this letter to a tenant even before the lease expires is an excellent way to show the tenant that you would still like him to continue living in your property. Here is everything you need to know about a lease renewal form.

Lease Renewal Letters

Tips for writing a lease renewal letter

The main reason why a landlord would issue an apartment lease renewal letter is to inform the tenant that the expiration of the lease approaches and he wants to propose a new lease. In the lease renewal letter, you can state whether your tenant will have to follow the same terms or you’re giving him different ones.

It’s important to compose the lease renewal template and send it in a timely manner, so your tenant has enough time to respond to it before the existing lease expires. Here are some tips for writing a commercial lease renewal letter for your tenants:

  • Start with the title section
    Think of this letter as a formal communication from the landlord to the tenant. Therefore, you should use a standard business format when writing the letter. If possible, print it out on the official letterhead of the company managing the property. Address the letter to your tenant. Include his full name, complete address, and his contact details. Then date the document and add a proper salutation.
  • Set the stage
    Your letter should have a reference section which would explain its contents. Talk about the reference in the first part of your letter. The introduction should give the details about how the expiration of the current lease approaches. Specify the dates when the lease started and when it will end. Then offer the renewal of the lease along with the length of the contract.
  • Include the renewal terms
    The following paragraph should contain the renewal terms of the lease. Most of the time, landlords would increase the rent. In such a case, specify the new amount the tenant has to pay each month and explain why you increased the rent. However, if you’re not going to increase the rent, specify this in the terms too.
    Talk about any issues which you may have encountered during the course of the existing lease. Then state that the renewal of the lease depends upon better conduct and observance of all the rental guidelines and policies. Also, give the tenant an opportunity to voice out his concerns he encountered during the same time. That way, you’re aware if you need to make any changes as part of the renewal terms.
  • Request for a response
    In the next paragraph, request for a response from the tenant and give him a deadline. Ideally, you should compose and send the lease renewal template at least a month before the existing list ends then ask for a response within 10 days. The earlier you send the letter and receive the response, the more you can prepare in case the tenant decides not to renew with you. In such a case, you will have time to look for a new tenant and spruce up the place after your current tenant leaves.
  • Affix your signature
    Conclude your commercial lease renewal letter with a salutation, include your name, and affix your signature. In cases where a property management company manages the property, the person who deals with the tenant directly should affix his signature as well.

Lease Renewal Templates

What happens when the rental lease expires?

Often, a lease would define all the parts of the landlord and the tenant’s relationship. It exists to keep both parties protected from abuse or miscommunication. As soon as a rental lease expires, most tenants and landlords sever their relationship. Then the landlords would look for new tenants while the tenants look for new lodgings.

However, when a rental lease expires, this doesn’t always mean that the tenants have to leave the property right away. In most cases, an at-will tenancy starts between the tenant and the landlord.

If the lease expires, the tenant can either stop making payments or make use of his last month’s rent deposit to pay for the last term of the lease. In either case, this means that the tenant has chosen to sever the lease and not accept the renewal as proposed in the lease renewal letter.

Therefore, the landlord will expect the tenant to vacate the property by the date specified in the existing agreement. Also, the landlord has the option to show the property to potential tenants. He also has to deal with the procedures regarding the return of the tenant’s security deposit.

When a tenant continues the rental payments, and the landlord accepts it even after the expiration of the lease, the renter becomes an “at-will tenant.” Most of the time, the landlord would ask for advance notice from the tenant before he vacated the property. Once the tenant submits this notice, the landlord cannot evict him from the property until he has enough time to arrange his new lodging.

Lease Renewal Forms

What does option to renew lease mean?

An option to renew lease means that the tenant has the ability to keep on leasing the premises before the expiration of the lease term. Therefore, if the tenant chooses to exercise the option to renew lease, the provisions of this option get adopted for another specified term.

Just like a lease renewal letter, this option comes with its own terms such as a change in the rent amount and more. If the option depends on the tenant to ask for the renewal, the landlord has to agree under the terms of this option. But if there’s no option involved, neither the landlord nor the tenant has an obligation to renew the lease.

Commercial Lease Renewal Letters

Does a landlord have to renew a lease?

As a lease comes to an end, both the landlord and the tenant should start considering what they will do next. If the landlord wants to keep his tenant, he may choose to issue a lease renewal form which includes all of the information regarding the terms of the new lease. But does a landlord have to renew a lease all the time?

The short answer to this is no, he doesn’t. Landlords may end their tenant’s lease without giving a reason as soon as the existing term expires. They aren’t required to renew or extend leases unless stated in a written agreement. But if a landlord chooses to renew the lease, he can also include changes in the rental price or in the terms and conditions of the existing lease.

If, as a tenant, you receive a notice from your landlord that he’s not renewing your lease, you may want to know why. Unfortunately, landlords aren’t obligated to give a reason, especially after your lease has ended. Usually, though, the common reasons why a landlord won’t renew a lease include:

  • he’s selling his property to someone else
  • he’s closing down his property for remodels or renovations
  • you’re always late in making payments, or you haven’t made payments for a number of times
  • you’ve broken the rules of your lease agreement

If you live in an apartment building and your landlord plans to renovate your space, you may try to ask for an apartment lease renewal letter but for a different unit. Although you would still have to move, you can stay in the same neighborhood. This is especially beneficial if you like the apartment community you live in and you’ve settled down in the area with your family already.

If your landlord plans to sell the property, you can ask him if he knows anyone else renting out a property for you to live in. But if you don’t receive a lease renewal letter from your landlord because you’ve broken the rules, or you haven’t made your payments on time, then you may want to speak to your landlord directly.

Have an open conversation with your landlord, give your reasons, and try to make an appeal. However, if the landlord doesn’t accept your reasons, then prepare yourself to look for new accommodation.

How do you negotiate a lease renewal?

The laws of landlords and tenants vary from one state to another. But in most states, the landlord has an obligation to honor all of the terms stated in the lease that’s about to expire. Also, most states require the landlord to provide the tenant with advance notice in at-will tenancy situations before they can raise their rents.

If the expiration of a lease approaches but both parties want to extend the agreement, the landlord has to craft a new lease agreement to replace the old one. Renewing a lease provides the landlord with a stable tenancy, and it provides the tenants with protection from a long-term tenancy compared to an at-will tenancy agreement.

When crafting the new lease, both the landlord and the tenant may negotiate the new terms. Some of them may change while others remain the same. If the tenant hasn’t been very good at following the rules, the landlord may state that in the new agreement. He may state that the tenant should make timely payments and follow all of the set rules if he wants to keep on living in the property.

TemplateLab March 23rd, 2019