How to renew/extend lease?

Question

I can't believe I have to ask this but I've not yet been in this situation. All of my tenants either moved after the first year or have been with me long term, so I've never had to renew a lease.

My lease reads as follows:

9.NOTICE OF INTENT TO SURRENDER: Any other provision of this lease to the contrary notwithstanding, at least thirty (30) days prior to the normal expiration of the term of this Lease as noted under the heading TERM OF LEASE above, Tenant shall give written notice to Landlord of Tenant’s intention to surrender the residence at the expiration of the Lease term.If said written notice is not timely given, the Tenant shall become a month-to-month tenant as defined by applicable Ohio law, and all provisions of this Lease will remain in full force and effect, unless this Lease is extended or renewed for a specific term by written agreement of Landlord and Tenant.

I want one particular tenant to renew for another year (and he has already indicated that is what he wants to do).  Do I have to send him a whole new lease, with the new term specified, or is there an addendum or "renewal" of some sort that I can send to just state the new term and we can both sign?

I have another lease expiring soon and for these tenants, I'm not sure what they're going to do.  About 45 days before the lease expires I'd like to send them 3 pieces of paper and they can sign and return to me whichever one they want, basically one that says "this is our notice, we're leaving", another that says "we're going month-to-month and we agree to the rent hike" and a third that says "we'll renew for another year at current terms".  Am I off my rocker?  How does everyone else handle renewals if you don't just let the term automatically renew at month-to-month?

Zane Cress · Answer

I see renewal addendums stapled on top of leases at most property management companies. For independently managed properties I prefer a new lease each year, especially if you are raising rents every year or two.

Kelly N. · Answer

I sign a new lease each year- it might be ok to do otherwise, but I think a new lease is better- you can update any items in the lease (I am adding clauses to mine to address things that came up with other residents) and IF you ever need to use the rental income to qualify for a new loan I would think the lender would prefer to see a new lease vs some continuation of an old lease.

I contact my tenants about 3 months ahead of the lease expiration date (or more if it is ending at a popular time) and ask them to let me know what there plans are by XX date (usually 2 months prior to lease ending or more).  I give them their options- sign  new 12 month lease with XX rent or let me know you don't wish to stay.  I offer to discuss shorter terms as well.  If they are staying in the area, I give them first dibs on any other rentals I might have that would suite them.  If they are renewing, I give them a deadline to sign the new lease (usually 2 weeks or so) so that I know I don't have to market that unit.

Kelly

John A. · Answer

I also renew by drawing up a new lease.  There's always something in the lease that is changed or updated from year to year as I become more experienced as a landlord.

Beth L. · Answer

@Susan M. I renew by creating a new lease with new dates and rental rates.

Scott Buck · Answer

I have historically used an addendum indicating the lease terms remain the same and include the new dates. If you're changing the terms of the lease you may want to draw up a new lease. I'm happy to send you the copy of the addendum I use if you think that would be helpful.

Congrats on the renewal. Good steady tenants are a blessing.

Scott

Rob Beland · Answer

For the time-being I would call the tenant that is renewing for sure and just print up a new lease for them to sign and change the dates. You can draft an addendum which basically states all provisions of the lease remain the same except dates, rent (if that changes), etc... but you should do some research to make sure you cover all the necessary provisions that may change with the renewal. After you get through this, consult an attorney, google, and these forums and spend some time determining what works best for you.

For the tenant that may or may not stay, again, just give them a call. It's really up to them to notify you of their intentions. If you want them to stay just work with them to execute a new lease. If they want to leave be sure they know how much notice they are required to give you.

I use an addendum for commercial properties that I manage as their leases are anywhere from 30-40 pages long but for residential tenants the lease is only 4-5 pages long for sfh rentals on a one year lease and just one page for a TAW in an apartment. Recreating the one year lease is not a big deal for me.

I hope this helps.