Streamlining your lease renewal process helps you avoid problems, and makes it easy for a good tenant to choose to stay in your rental property.
Here are a few tips to keep in mind when it comes time to extend your current lease:
Make the lease extension official. Depending upon the language of your existing lease agreement, you may be able to offer a simple lease extension form for the tenant’s signature. This short form will indicate that all the terms of the existing lease will continue in effect for another specified term, or spell out any changes in those terms, like a rent increase or new policy.
Without a written lease extension or new lease, the tenancy becomes a month-to-month. That may not be a bad thing, especially if you weren’t planning to increase rent, but it can cause problems. For instance, the tenant now has control of when you will be filling the next vacancy. Month-to-month leases may require only 30 days notice if the tenant wants to move on. The tenant may find a great deal on a vacant unit in November, but then you may struggle to fill your vacancy in December.
Avoid auto-renewal provisions, where the lease is renewed unless the tenant serves some sort of notice on the landlord. Often, tenants simply forget these provisions are in the lease and miss the deadline for giving notice. As a result, auto-renewals are prohibited under many states’ consumer protection laws, and otherwise may not stand up in court as valid contracts.
Ask the tenant to update the rental application with any new information, like emergency contacts, employer or a new bank, or new pets.
Find out if “guests” are actually living in the property, and if so, add them to the new lease, after they fill out a rental application and your conduct a tenant background check.
Use this time to make upgrades or update items like older appliances. This allows you to reward your good tenant for their lease renewal, and at the same time improve your rental property.
This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).
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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.