Best method of renewing leases

[Terri Pour-Rastegar]

What's the best way to handle lease renewals?

I've been doing this landlord thing for 12 years now, but I'm just not happy with the way lease renewal time plays out.

FYI, My NC rental agreements are all month-to-month, which is fabulous for me, thank you very much. Their language allows for self-renewal every month. However, I like to officially renew yearly anyway, just to keep the paperwork tidy.

My SC leases all run for 1 year, which is fine. MTM versus 12-months is not an issue for me. The 1-year leases self-renew at the end of the 12 months. Again, however, I like to officially renew.

My tenants always want to stay. Any time a tenant has wanted to leave, it's always for relocation or they've bought a house or something, and they always tell me months before renewal. In those cases, I mail a letter outlining our conversation and extending the lease on a MTM basis until a certain date, etc.

In the past, I've simply sent out a letter outlining the renewal terms, and whether or not there is an increase or such. I sign it, and indicate that the tenant has so many business days in which to sign and return it to me in the enclosed SASE.

The problem is that I almost always have to pester the tenant to return the signed document. Even though they want to stay, and even in cases where I haven't increased the rent. These same people continue to pay rent (I collect electronically), even if I've increased the rent on them (I go into the debit system and change the rent--they say nothing about it).

I have half a mind to just send the same letter and state that these are the renewal terms, if you don't respond otherwise in XX days, this goes into effect, etc. But I really prefer that signed document.

So whattaya think?

[Steve Babiak]

What I do that so far seems to work. My lease has an automatic renewal clause in it, for 8% increase and month-to-month term. When I send the renewal letter, I offer two choices. Automatic renewal according to the lease is one option. The other option is renewal at a lower increase, say 2% or 3%, but requires that they send in the enclosed form by a specific deadline (usually within two weeks) agreeing to sign new lease based on the lower increase terms; if form is not returned or not returned in time, the default is the automatic renewal based on the bigger increase - and my renewal letter emphasizes this. I've found that the only ones who won't send in the form to get the lower increase are planning a move ...