A lease renewal agreement is a necessary document if you are managing a property that you rent out. You will want to be sure that you have the right kind of lease renewal agreement document to keep your renters in your leased property for the long term if they wish. Being able to renew a lease readily and with simple documentation is a key aspect to keeping renters happy and saving the property managers’ time. If you have never written one of these agreements, you will want to make sure that you are crafting a lease renewal template that will be easy to use at the end of each lease term.
These documents are used to essentially modify the existing lease and not to create a whole new lease each time the contract that is in place comes to an end. Being able to just add an addendum to your existing lease can make all the difference in your ability to maintain rented properties efficiently.
Table of Contents
- 1 Lease Renewal Letters
- 2 How does a lease renewal letter or form work?
- 3 Are there different names for the lease renewal document?
- 4 Lease Renewal Templates
- 5 How to write a renewal lease agreement
- 6 Lease Renewal Forms
- 7 How far in advance should you get a lease renewal agreement?
- 8 Commercial Lease Renewal Letters
- 9 Are lease extensions a good idea for a tenant?
Lease Renewal Letters
How does a lease renewal letter or form work?
This letter or form is used to modify the existing contract that you have with a renter, allowing them to remain in the property without having to start all over and write a fresh lease. This protects the credit of the renter, saves the landlord time, and makes the process of keeping properties rented out very simple. There is no reason to make a current renter have to initiate an entirely new rental contract just to stay in the rental that you have contracted them to live in for a period already.
Most rentals are rented out for a set time period, such as six months or a year, so you will need to be sure that your renter is ready to contact you again when the rental contract comes due again. This is important so that there is no lapse in the rental contract, which can leave you and your tenant exposed to unnecessary risks. This can also be an issue when it comes to renter’s insurance since an active rental contract needs to be in place for the renter’s insurance to be considered valid.
Are there different names for the lease renewal document?
This document might go by a few different names. The state that you are renting in might have a standard name for this document that differs from the name of the document in another area. This does not invalidate the agreement, and you should not worry if the name does not match what your other lease renewal agreements have been called in the past.
The other names that this document can go by are:
- Lease renewal letter
- Advance notice of renewal of lease
- Lease renewal agreement
Any of these names is fine for you to use when creating your document, but you might want to follow the standard practices in your area to be sure that you do not confuse your tenants.
Lease Renewal Templates
How to write a renewal lease agreement
This agreement requires some standard information that must be included for the agreement to be valid. Remember that this document is simply an addendum to the existing lease and that it needs to be just as binding as the original contract. You cannot just accept a verbal agreement from the tenant to continue the lease, as there needs to be a modification to the existing lease to give them permission to continue to have a contract on the property. This is a common oversight by those who are new at managing properties and those who are not used to renting on a lease basis. Be sure that you are not leaving out critical information, or your lease renewal document might not be legal or useful to you or your tenant.
- Date of the Agreement. This will need to be the effective date of the agreement, which indicates when the lease will renew. You can simply pick the next date after the end date of the existing lease to be the effective date for this document. If your lease ends on December 31st of one year, the lease renewal can start on January 1st of the next year.
Make sure that you use the proper format for this date as well. This eliminates confusion and makes sure that everyone knows what date is being referred to for sure. The proper format is as follows, “this__day of____, 20___”.
- Landlord and Tenant Names and Information. Indicate the full legal name of the property landlord and make sure not to use nicknames. If the property is managed by a rental agency, you will need to indicate the full legal agency name here. Add the address of the person or business and then indicate their contact information, such as a phone number and an email address.
You will also need to indicate all of the tenants for the property by their full legal names. You cannot just say Mr. and Mrs., so and so. You need to use the full legal names of each person and also indicate their address and contact information on the document.
- Original Lease Details. The original lease details can be summarized in this document, or you can simply indicate here that the original lease is attached and can be referred to as needed. This is the easiest way to indicate that the lease renewal will follow the same guidelines as the first agreement did and that no changes will be made to the nature of the lease despite the renewal.
The new lease agreement is simply modifying this existing lease, so you will need to be sure that the lease is clear and indicated properly in this document.
- End Date of Original Lease. Mark the end date of the original lease agreement, and make sure that you are clear about the term ending on the original lease on this exact date.
- Section Number of the Original Lease. This is not required information, but you might need to point to the specific section or clause of the lease agreement to indicate where the most important leasing information is located in the original document. This can save time if there needs to be any action taken to look into disagreements or other problems with the lease renewal down the road. There might also be language in this section that gives permission to grant a lease extension to the original tenant, and you should make sure that this part of the language is simple to track down if there is a need to look into it in the future.
- New Lease Term and Specifics. The new lease term should be indicated clearly in this section. You can give the person an extension for any amount of time that you wish, although a year is usually the maximum amount of time that a lease will be extended into the future. If there are changes to the rent amount or the nature of the rent agreement, they will need to be indicated here in this section. You might need a new security deposit for this extension and some kind of processing fee, so be sure that you mention this in the new lease terms section as well.
- Governing Laws. Refer to the renting laws in your state or area and make a note of which laws allow for people to extend their leases in your state. This can help if there is a dispute and your tenant wants to know why you have handled a lease extension in a certain manner.
- Signatures. Both you, as the landlord, and the tenants need to sign the agreement once everyone has read it and agreed on it. You will need to date your signatures as well. This is critical information to have in the form, or else the contract extension is not considered to be valid.
Lease Renewal Forms
How far in advance should you get a lease renewal agreement?
There might be some different requirements in your state related to the time that is necessary to notify a landlord that a lease will continue. Make sure that you are aware of these limitations and guidelines before you advise your tenants. Tenants can also be sure to check on the requirements for this part of their leasing process as well so that their lease does not lapse. In rare instances, late notice can cause someone to lose their living situation due to a lack of contact with the landlord. Reasons that you might need to reach out to your landlord in advance of the contract ending are:
- To be certain that your intentions are clear
- To be sure that you can get access to the right lease renewal agreement documents
- To be certain that the apartment has not already been spoken for by someone else
- To be sure that the landlord can resolve any disputes with you before resuming the lease
There are many different reasons that communication between a landlord and a tenant can be slowed down as well. When a landlord is not local or a management company runs the property for a landlord, communication can take more than a week to be completed. These kinds of delays can cause a renter to lose a lease simply because they have waited too long to reach out to the landlord to convey their desire to stay in the property that they are renting.
It is always a good idea to be sure to reach out a couple of months before your lease is up to make sure that you can get the renewal agreement filled out and approved before your lease ends. The sooner you reach out, the better in most cases, so do not be shy about doing so.
Commercial Lease Renewal Letters
Are lease extensions a good idea for a tenant?
There are many situations where extending your lease is much easier than finding a new place to live. If you like where you are living, this will often be a very simple decision, and the process of continuing your lease is much easier than writing up a whole new lease to contract with your landlord again. You will protect your credit from being pulled again as well, which can be a very nice thing for those trying to build credit through good rental history.
If you are not happy with where you are living, remember that this lease agreement renewal is the same as the original lease contract and is just as binding. You will have to take legal action to break a lease or try to sublet your leased space to someone else if you choose to move. Many landlords will only allow you to break your lease if you meet very specific qualifications, so you need to be wary of extending a lease in a place where you are not happy living.