Since 2010, landlords have raised rent rates an average of 31%. Raising rent prices is beneficial for landlords and property investors but they can make lease renewals a bit more complicated.
Landlords cannot raise rent prices without letting a tenant know. This is just one item that must be included in lease renewals.
What all do you need to include in a lease renewal notice letter? Keep reading to find out.
Lease Renewal Notice Letter Requirements
If you decide to offer a lease renewal letter, you'll want to provide tenants with a formal document that includes certain details. You'll need to include the date, name of the tenant and landlord, and property address.
Other things to include in a renewal letter are:
- The expiration date of the existing lease
- New lease rent amount
- New lease term length
- Deadline for tenant response
You can choose to mail or email the lease renewal letter. Some landlords prefer to hand-deliver the letter to answer any questions a tenant might have.
As the general rule of thumb, provide a lease renewal letter to a tenant 90 days before their existing lease ends.
Renewing a Lease
When the tenant agrees to a lease extension under the terms provided, you'll draw up a new lease for both parties to sign. The following items are commonly negotiated before singing:
- Security deposit increase
- How to pay rent moving forward
- Requiring renter's insurance if not already applicable
Changes to lease terms and conditions are also common. For example, a tenant might only renew their lease if pets or a roommate is allowed to move in.
A tenant that doesn't want to renew their lease or fails to respond by the deadline should receive a document from the landlord explaining that the lease will not be renewed.
Non-renewal lease letters provide documentation that a tenant was offered the opportunity to renew a lease but declined the position. This type of letter is also required if a landlord chooses not to renew a lease with a tenant.
Should You Offer Lease Renewals?
Landlords might not want to offer lease renewals to tenants who aren't up to par. However, local and state laws might dictate whether or not a landlord can end a tenancy.
Before deciding whether or not to offer a lease renewal, check with your state's laws and consider these factors:
- Term length
When you have a great tenant, it probably seems like an easy decision to offer a lease renewal. Since market conditions change, it's a good idea to consider the above factors as well before making a final decision.
Write a Lease Renewal That Benefits Your Investment
Lease renewals don't have to be complicated. In fact, you can find various templates online that comply with all regulations.
After deciding if you want to renew a tenant's lease, use all of the factors outlined in this guide to create your document. Once a tenant accepts the lease renewal agreement, write up a new lease.
Don't have time to offer lease renewals to your tenants? Outsource the task by hiring a property management company. Contact us today to learn how we can help you.