A lease renewal letter notifies your tenant that their lease is expiring soon and gives the tenant the option and instructions on how to renew their lease. The lease renewal letter is informational and does not bind either the landlord or tenant to a new lease.
Do You Need to Renew a Lease?
Of course, you don’t have to renew a lease. Absent a provision in your lease agreement, there are very limited circumstances when a landlord cannot end a tenant’s lease at the end of its term. As long as you follow your state’s requirements for properly notifying the tenant this is perfectly within your rights as a landlord. Besides the obvious reasons, here are a couple of reasons why you may not want to renew your tenant’s lease
- Plan to sell the property in the near future.
- Rent control law limitations on rental rate you can charge.
However, if you are looking to renew your tenant’s lease, here is everything you need to know.
When to Send a Lease Renewal Letter
You want to make sure your lease renewal letter is sent with enough time for your tenant to decide whether or not to renew your lease. You also want to make sure you have enough time to prepare and find a new tenant if your current tenant decides not to renew their lease. Some states have a specific timeframe for when you are required to send a lease renewal letter depending on the term of the lease you have with your tenant. See the chart below for your state’s notice requirements.
|State||Yearly/Fixed Term Lease||Month to Month Lease|
|California||1 year: 60 days ; 1 year: 30 days||30 days|
|Colorado||1 year: 91 days; less than 6 mo. – 1 year: 21 days||21 days|
|Delaware||60 days||60 days|
|Illinois>||60 days||30 days|
|Maryland||90 days||30 days|
|Massachusetts||None||30 days or 1 month (whichever is longer)|
|Minnesota||None||1 full rental period before last day of tenancy|
|Nevada||None||30 days prior to payment date|
|New Hampshire||30 days||30 days|
|New Jersey||1 month||1 month|
|New Mexico||None||30 days|
|New York||None||30 days|
|North Carolina||Year-to-Year: 1 month||7 days prior to payment date|
|North Dakota||Year-to-Year: 1 month||1 month|
|Oregon||None||30 days prior to payment date|
|Pennsylvania||1 year or less: 15 days; 1 year: 30 days||15 days prior to payment date|
|Rhode Island||None||30 days prior to payment date|
|South Carolina||None||30 days prior to payment date|
|South Dakota||None||30 days prior to payment date|
|Texas||30 days||30 days from next payment date|
|Utah||None||15 days prior to payment date|
|Vermont||None||1 payment period prior to termination date|
|Virginia||90 days||30 days from next payment date|
|Washington D.C.||None||30 days|
|West Virginia||None||30 days|
If a lease renewal letter is not sent before your state’s required deadline, once the current lease expires, it will transition into a month-to-month lease.
If your state does not provide an explicit timeframe, it’s still good practice to send a lease renewal letter out well in advance of the lease’s expiration date. Doing so provides the following benefits:
- The tenant has time to make a decision.
- Provides time to discuss and/or negotiate any new or changing terms.
- Gives the landlord time to advertise and start screening for new tenants if your current tenant decides not to renew their lease.
How to Write a Lease Renewal Letter
Your lease renewal letter should include the following information:
- Date the letter is being sent.
- Landlord’s name and contact information (provide multiple ways for the tenant to contact you).
- Tenant’s name and contact information.
- Rental property address, including the unit number.
- >Reference to current lease agreement (also attach a copy).
- Date last payment is due.
- Expiration date of existing lease.
- New monthly rent payment.
- Dates and length of new lease.
- Any additional terms for the new lease agreement that are new or changing from the terms of the original lease.
- Steps for tenant to take to renew their lease.
- Deadline for tenant’s response.
- Landlord’s signature.
- Tenant’s Acknowledgement.
Lease Agreement Renewal Terms
Before sending your lease renewal letter, consider whether or not you want to change any of the terms for the new lease agreement. Potential changes may include:
- Raising the rent to reflect the current market Calculate your property’s rental rate here
- Lowering the rent to entice a tenant to stay.
- Switching to Month-to-month lease if you are contemplating selling the property.
- Terms to resolve issues that arose during current lease.
You also should be prepared in case your tenant wants to negotiate the terms of the new lease agreement. Here are items the tenant may want to negotiate:
- Rent price or security deposit.
- Duration of the lease.
- Policies or rules.
- Renters insurance requirements.
- How payments are received.
It’s up to you the landlord to weigh the many factors involved when considering a tenant’s requests. Of course, for popular negotiation topics, such as rent, you can strengthen your position by reviewing your city’s rent index or using the tool above to calculate the estimated rent you can charge. Having this information can help rebut a tenant’s argument for lower rent. Here are some other tips and items to consider when negotiating with your tenant.
- Review your local market to see what similar rental units charge for rent.
- Assess seasonality and current rental demand.
- Factor in your own financial situation (i.e., mortgage on rental property).
- Consider offering concessions or amenities.
- Factor in the quality of the tenant.
How to Send a Lease Renewal Letter
Sending a lease renewal letter can be done by mail, in person or email. For each of these methods, be sure to take the following steps to ensure receipt and proper documentation:
- Send by certified mail. Restricted certified mail is even better as it will require your tenant to sign upon receipt of it.
- Send with delivery and read receipts to document successful delivery and tenant’s receipt.
- In-person- Have the tenant sign a copy of the letter acknowledging receipt.
You should keep a copy of this notice filed with a notation of what means were used to deliver the notice and any other relevant information.
What if a Tenant Does Not Renew Their Lease?
It’s possible, after sending a renewal letter, that the tenant decides they do not want to renew their lease. What are the next steps you should take? The first thing you should do is request the tenant send you a letter stating their intent not to renew their lease. In addition, send the tenant a written notice with the lease end date and that the tenant has decided not to renew their lease.
Include in this written confirmation specific instructions on what the tenant must do prior to moving out. While these instructions may vary they typically will include the following instructions:
- Remove all trash and personal items.
- Thoroughly clean all appliances.
- Repair any damages caused to the property by the tenant and their guests.
- Discontinue cable and phone services.
- Return keys.
Shortly, you are going to have a vacant property. Now is the time to start going through the process to fill this vacancy as soon as possible.