Renewing Leases

Posted by Teresa on March 7, 2009 under Landlord Tips, Tenant Credit Checks | icon: commentBe the First to Comment

Renewing Leases E

Finding great tenants is a big job. So when you have them, you want them to stick around. If you’re renewing leases, it’s good sign that both parties are satisfied. Avoiding tenant turnover can yield significant cost savings—no major repairs or painting, cleanup, or advertising for new tenants. So, if you have a good track record with a current tenant, and you’re both happy, do what you can to renew the lease, and save yourself time, money, and trouble.

Communication is Important
There is no standard lease renewal process. Most leases are for a specified period of time; if there is no language regarding renewal, the lease expires on the date indicated, and your tenant is free to move out. In this situation, you’ll want to approach your tenant at least two months ahead to inquire about his or her plans. If you want your tenant to stay, make sure they know it! Of course, you have no obligation to renew a lease.

Renewal Language in a Lease
Even better: why not cover yourself and spell everything out in writing? Then, everyone knows what to expect. Your rental agreement or lease could include a “renew by” date, usually 30-60 days prior to expiration, by which your tenant must inform you if they are NOT renewing the lease. If they do not, it is assumed the lease will be extended. You can specify in the lease whether the renewal is for the same time period and under the same terms, or if it is month-to-month or some other length of time.

Be a Good Landlord
It doesn’t hurt to check in on your property regularly—and to check in with tenants when the lease is coming to its end. There may be a repair job needed, or a small upgrade you can provide to entice your tenants to stay. If you care about your tenants, make sure they know it!

Renew the Credit Check, Too
It’s a good idea to recheck a tenant’s credit when renewing the lease. Be sure you are in compliance with the Fair Credit Reporting Act if you do.