Bad form to not renew rental contracts?

Question

Hi,

Is it bad form or legal to simply not renew a rental contract because the tenant isn't taking good care of the place or because I would like to make updates.  I'd like do a lot of repairs/clean up so I can rent it out for $700 instead of $450.

I find this is a recurring problem when I buy new properties.... however it's difficult because the units are currently occupied.  Any thoughts on the best way to deal with this?

Thanks -Ray

Michele Fischer · Answer

Agree this is totally up to you.

Normally we try to keep the tenant, train them on care/expectations or realize that they will not be cared for as we would like (focus on issues that will cost more if they continue as is), and do as many upgrades as we can while tenants are in place to reduce empty days.

But if you are willing to take on the disruption of a move out and empty days, you have every right.  I would give them as much notice as you can to ease their transition.  If they don't have a deposit saved, they may not get out on your timeframe.

You could offer them three options, options makes tenants feel more in control - move out, stay and pay more, stay and pay more with upgrades according to defined schedule.

Edward B. · Answer

@Ray Loveless

You are perfectly within your right to not renew a lease on a tenant that is not living up to your expectations, especially in terms of maintaining the property. In fact, it is probably much better to let them go vice trying to enforce the new standard with them because they have already been given a pass on maintaining the property and paying market rates and so will most likely resist. Just move on.

Account Closed · Answer

The new landlord didn't give a reason.  The previous landlord didn't have this requirement.

I know the previous landlord purchased the building many years ago at a bankruptcy sale.  Through the grapevine I'm told they invested tens of millions of dollars fixing it up before they sold it for a handsome profit earlier this year.

My original purpose for getting renters insurance was to qualify for an umbrella policy.  This policy provides additional coverage above and beyond automobile insurance and either homeowners or renters insurance.  My renters insurance policy now lists my landlord as the "interested party" that wants to be kept current with confirmation of coverage notices.

When I owned a home before, my homeowners insurance policy listed the lenders that had liens on the property.  Whenever I changed lenders, either by refinancing the mortgage or eventually paying it off, I had to let my insurance company know of the change.

Account Closed · Answer

New ownership provides the opportunity to make changes that might encourage the stable longer-term tenant.

The apartment building I live in just got sold. The new owner requires all tenants have renter's insurance with at least $100K of liability coverage (the previous owner did not have this requirement).

The rent structure also changed to favor the longer-term tenant.  For example, the per-month rent on a 1-year lease is just slightly higher than before, but is much lower than the rent on a month-to-month arrangement.

The month-to-month arrangement is new and automatic if the tenant does nothing when a lease expires.  Before, an expiring lease meant the tenant had to vacate if either the tenant or landlord did not renew it.

Ray Loveless · Answer

Account Closed, That's interesting... I wonder why they want you have 100K in renters insurance?

Peter M. · Answer

It is not bad form and legal as long as you follow UT property code. (Type Utah property code into google). Don't feel bad about increasing the value of your property. That's why you bought it in the first place right?

Ray Loveless · Answer

@Justin Thiesse, Thanks Justin.. I think that's what I'm going to do from now on.   Just curious... if you rent and fix up apartments for your full time job how do you get funding for the projects to buy without bringing in a regular w2?

Dick Rosen · Answer

Check the Landlord/Tenant Laws for your area. In my area (Phoenix) I can issue a 30 day notice of non-renewal with no reason at all and in some cases your better off not giving a reason because it may cause further confrontation.

Bad form to not renew rental contracts?

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