The Lease Renewal Agreement is a legal notarized document created to renew the lease duration of property, vehicle or any materialistic object.
What is a Lease Renewal Agreement?
A lease renewal agreement is used by the landlord and the tenant who want to extend their previous lease agreement either because the previous lease agreement has expired or they want to make amendments such as to record any changes in the monthly rent or add any more clauses such as related to the tenant’s obligations or rights.
How can the Tenant renew the lease?
As a tenant, you should keep in mind that landlords often look for new tenants as the original lease expiration reaches closer. They might try to rent their property for a higher price to someone else, therefore, it is important that you are proactive in your approach and reach your landlord before the expiration date and inform them that you want to extend the lease period and are willing to negotiate the terms for the new lease agreement. After you have agreed upon the new terms then the landlord will take care of arranging and preparing the renewal agreement.
How can the Property Owner renew the lease?
Before deciding the terms of your new lease, try to contact the tenant and ask them if they want to extend the lease and if they are willing to pay a higher price for this building if they give a positive response then proceed with the negotiations. Include important factors such as the new lease period length, the new rent, any new terms or agreements, etc in your negotiations. You can also hire an agent who will negotiate with the tenant on your behalf but he will charge a renewal fee to either the tenant only or to both parties.
What happens when I renew my lease?
If you renew your lease in time, the landlord can not evict you or ask you to vacate the property. You will also be inured to the new terms set in the renewal agreement such as you may have to pay a higher rent or abide by the new rules of the landlord such as “No pets”, “no smoking”, etc.
Should a tenant renew the lease?
Think carefully and consider a lot of factors before you decide to renew the lease:
As a Tenant:
Property search: can you find a similar or better property that offers the same affordability? will it be easy to conduct your daily chores/ commutations through the new property location? Maybe your current property has a suitable location for your job or schools of children. It’s possible that you can find a cheaper property elsewhere but it might lead to more travel expenses.
Landlord’s offer: Think about the renewal and ask your landlord what changes he will be making (if any) in the new lease agreement. If there are not any substantial changes such as a sudden rent increase then you might want to consider renewing the existing lease.
Should the landlord renew the lease?
Replacement: How easy is it to replace the tenant? How much time will it take? What will it cost? Will you be able to support yourself when there is no rental income for a short period when the property is empty?
Market Value: Are more people looking to rent the property you own? If there is a lot of demand for similar properties than there is a possibility that you can rent it on a higher price to someone else and make more income.
You can choose to not renew the lease in order to rent it out on a relatively higher monthly rent to someone new. But it is important to remember that marketing your property and listing it on websites or other advertisements can be a lengthy process and it may cost you a lot of money. It is also likely that while you look for a new suitable tenant your property will remain empty for some period depending on how quickly or slowly you find the new tenant. This will mean no rental income for that period. Therefore, it is important to consider all the costs and benefits before making the final decision.
How to negotiate with the landlord during a lease renewal?
Market Value: It is likely that the landlord will charge you a higher rent for the renewal of lease may be because the value of such rental properties has increased and more people are willing to rent it at a higher price. In such a case don’t try to negotiate too much on a lower monthly rent but reach a conclusion that will benefit both parties. Also, emphasize your qualities as tenants such as maybe you don’t have a large family so point this out and inform them that their property will face less wear and tear or damage. Try to list all your qualities as a preferable tenant and then it might help you with negotiating the rental price.
How to negotiate with the tenant during a lease renewal?
Market Value: has the value and demand of your rental property increased or decreased? Do you think more people are willing to rent it for a higher price? If the value and demand have increased then try asking the tenant for a higher monthly rent. Or is it a difficult property to rent out? If you think that it will be hard to find a new tenant, try to ask your tenant to renew the lease for a longer period of time such as 18 months or as you find suitable. Having a longer lease period will ensure that your property does not remain empty in case the value and demand keep decreasing over time.
Can my landlord charge me to renew my lease?
Typically, landlords do not charge anything to renew the tenancy their concerns are more related to the negotiations and monthly rent, etc. And they will prefer to keep the communication between you and them as clear and smooth as possible. If you accept their terms and conditions and negotiate fairly they will renew the lease without incurring any costs to you.
If you are being charged any fees it is usually because an agent is involved. Most real estate agents try to earn commissions through the negotiation process, they also try to give you a harder time in getting a renewal as they can earn more commission when they help the landlord look for new tenants.
Do I need to pay the security deposit again for the renewed lease?
No, security deposits are only paid when the initial lease is signed. Moreover, you only get a security deposit refund when you vacate the property and not when the lease expires. If you renew your property only your original security deposit should be held and no further deposits should be needed. However, It is possible that in the new lease agreement the landlord asks for a higher security deposit.
Can the lease be renewed automatically?
In most states, the landlord or the tenant can not renew the property on their sole discretion, the agreement of both parties is needed for a renewal. However, other states allow the landlord to automatically renew the lease if the tenant did not issue a notice for the termination of the lease so if you do not want to renew your lease consider sending a formal letter to your landlord that you will be vacating the property.
Why is my landlord not renewing the lease?
Negotiations and other preferences can cause a landlord to not renew the lease. Maybe they are able to rent the property at a higher price. Or maybe they find some of your actions or activities objectionable such as smoking, keeping pets, too much noise or wastage. All of this can influence the landlord into looking for more suitable tenants.
Can my landlord refuse to renew the lease?
Both parties have the legal right to refuse the renewal of the lease. If you don’t want to vacate the property in case it is not affordable or manageable at the moment, then try convincing your landlord to renew the lease. You can do this by informing them that you are willing to pay a higher price or to maintain the well-being of the property with more care.
One Page Lease Renewal Agreement Template Preview
One Page Lease Renewal Agreement Template
This Lease renewal Addendum is executed on [EXECUTION DATE] by and between the Landlord [LANDLORD NAME] and the Tenant [TENANT NAME] for the lease renewal of the property located at [PROPERTY ADDRESS].
WHEREAS: The landlord wishes to renew the original lease which was entered into by and between the Landlord and the Tenant on the [EXECUTION DATE OF ORIGINAL LEASE] for the aforementioned property.
WHEREAS: The tenant wishes to renew the lease and remain as a tenant of the property mentioned herein.
NOW, THEREFORE, This Addendum is executed to renew the original lease with the following changes:
For the renewed lease the Tenant will pay a monthly rent of ____________.
This new lease agreement will be put in effect on [EXECUTION DATE] and will remain in continuity for a lease period of [LEASE DURATION] until terminated by both parties.
- TERMS AND CONDITIONS
Both parties agree to remain in compliance with the terms and conditions of the original lease. Both parties agree to the terms mentioned herein by signing this agreement below:
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|Tenant’s Signatures (initials):|
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