Tip #52

Require Your Tenants to Give 60 Days Notice of Non-renewal

Written on June 11, 2015 by

Non-renewalLease renewal is a touchy subject, and in my opinion, it should never be guaranteed.

Some landlords prefer an automatic renewal approach, and even sometimes, the tenant is given a “guaranteed” renewal option. No thank you.

I never know what the future holds, and I need to keep my options open. I prefer not to be tied down like that.

None of my leases have automatic renewals, but I do require my tenants to give 60 days notice of non-renewal. Basically, I’m saying:

“If you plan on leaving when your lease is up, you have give me 60 days notice.”

It’s a great tactic that has reduced my vacancy to near zero, and saved me lots of time and money over the years.

Don’t Give a Guaranteed Renewal

guaranteed-renewals

If I get a bad tenant, the worst possible outcome is for them to have the “right” to renew at the same price. Meaning, they can renew, under the same terms, even if I don’t want them too.

Some inexperienced landlords have this clause in their lease, but I think it’s a horrible mistake. When signing a fixed-term lease, I never guarantee an option to renew.

Why in the world would I tie my hands like that?

When reviewing the lease with my applicants, about half of them ask “Will I be able to renew?”.

I always answer the same way:

“If you’re a good tenant, and I don’t have any other plans for the house, then of course I’ll give you a renewal offer. But we’ll need to work it out when the time comes. If you want to guarantee your tenancy for a longer term, we’ll need to sign a longer lease.”

To the best of my knowledge (although I’m not a lawyer), no state requires a landlord to renew a fixed-term lease. It would defeat the point of having a fixed end date. Although some tenant-friendly cities, like Washington D.C., give the tenant the right to go month-to-month after a fixed-term lease, with the same terms.

Further, many rent-controlled cities in California, say that a landlord can only terminate a tenancy for a variety of reasons, and no-cause terminations are easy fought.

What About Automatic Renewals?

An automatic lease renewal is ideal for at-will tenancies, such as week-to-week, month-to-month, or year-to-year. However, I don’t think it’s appropriate for a fixed-term lease (a lease with a set end date).

With that said, just because a lease automatically renews, doesn’t mean either party can’t terminate it with proper notice.

Automatic renewals have some negative consequences on a fixed-term lease:

  • The manager won’t visit the property as often
  • The landlord will forget about the renewal and miss an opportunity to raise the rent
  • Many tenants forget about the date too, and then want to abandon their lease at a later time

60 Day Notice of Non-Renewal

None of my fixed-term leases automatically renew, however I still require a tenant to give me 60 days notice, prior to the lease end date, of their intent to move out.

Meaning, the assumption is that they will be renewing (assuming the rent doesn’t go up too much), even though the lease doesn’t automatically renew.

It just means that we need to sign a new lease if they want to stay.

My Lease Clause

The Main Benefit

The reason for this requirement is that it guarantees I have 60 days to try to find a new tenant. If the tenant fails to provide 60 days notice of non-renewal, they will still be held responsible for 60 days of rent, unless I can find a replacement sooner.

For example, if the lease is scheduled to end on June 30, then they must give me notice by April 30th of their intent to vacate when the lease ends. If they don’t give me notice until May 15th, then I can hold them responsible for rent through July 14th (60 days), if I don’t find a replacement tenant prior to that.

Always Send a Reminder

Because this 60-day requirement is unusual, I try to remind my tenants of their 60 day responsibility at 70-75 days from the end of the lease – so that they can start thinking about their options.

If I plan to offer them a renewal agreement, I will send the new terms to them with this reminder. After all, how can they be expected to make a decision if they don’t know what the rent price will be?

This is my renewal reminder email:

In summary, be fair, be logical, and give them a renewal offer before the 60 day deadline. If you refuse to offer a renewal, then tell them so. Let them know that they must move-out when the lease is up. The more time they have to plan, the less risk there is of an unlawful detainer.

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129 CommentsLeave a Comment

  • Dan Hunter

    KEEP UP THE GOOD WORK LUCAS !!!

  • Jasmine Franchesca

    Hello Lucas,
    You have been a big help. Thank you for your hard work and dedication. Have a blessed weekend…
    Jazz

  • Jezelle Hatchett

    Lucas, I’m a new Landlord and thoroughly enjoy reading your tips. The information you provide keeps me informed about issues I might not have considered. Thank you !

    • Lucas Hall

      Hi Jazelle, I’m happy to have helped. Cheers!

      • Bashar Dost

        Hello Hall
        Thanks for the information
        My question is
        Can a landlord gave no lease renewal notice with no reason. I did nothing wrong, paid rent on time, having good relationship with Nighbor, keeping the unit clean, no complaints. and I as a tenants want to stay in and I am willing to renew the lease for one more year.
        Please respond me what to do.

  • Carol

    I just took a jump from 6 units to 11. All kinds of things are coming up and I appreciate your column so much! Keep on sharing, its really helpful!

    • Lucas Hall

      Hi Carol

      Congrats on the jump! You’ll be fine, just set up a easy repeatable process. Have you considered trying Cozy for applications, screening and rent collection. It saves me lots of time, and it’s also free. https://cozy.co

      • kerria

        do you have a sample of a non renew lease for a landlors ?! My tenants has a 3month lease and already I see I made a bad decision…pls help

        • DAN HUNTER

          Hi Kerria, It’s not clear what the “bad decision” is. Did you rent to an undesirable person and you would prefer they take their business elsewhere or do you think you should have locked them into a one year lease ?

          • kerria

            A very undesirable person, I thought I was being helpful to someone in a bad situation w/kids…but it has been a headache since they moved in.

            • DAN HUNTER

              Hi Kerria, You need to learn how to fill vacancies. Basically, due to the civil rights laws along with good, common sense, the sole criteria for filling vacancies is the credit report. This can protect you from discrimination charges which can bankrupt you !!! Your credit bureau will show you how to read a report. Next is job strength. Don’t rent to somebody that works in landscaping if winter is two months away. Forget about renting to people that you feel sorry for. These are the ones that are usually real trouble !!! Good luck to you and start using a professional approach to you business.

              • kerria

                Hello Mr.Hunter,
                thank you for your advice…I know how to fill vacancies, which I have been doing so. I have tenante who has remained in my properties for 3years with no problems/issues. Nevertheless …your common sense statement…I have to disagree with you on that! You can do a credit check, monthly inspections (which tenants tend to clean b4 you come ) and never know your tenante until they actuall move in. I will be fine “Trail and Error”
                thanks

        • Carol

          Kerria,
          This too shall end. Every once in a while even the most experienced landlords make a “picking mistake”. Try going over the lease with a fine tooth comb and collect even the most minor infractions. Have your tenant correct them and keep checking on them. Do everything with certified mail so they cannot say they never received it. Also, send regular mail and hand deliver a copy. Problem tenants tend not to pick up certified, but it’s for your protection.

          Reveiw your lease and make sure even the slightest items are for your protection. Everything seems well and good with prospective tenants (and actual tenants) until there is a problem, then; “what does the lease say?”

          Good luck.

  • Leigh

    Too bad this isn’t legal in California. One of my clients asked us to add this to the lease, but the lawyer said it is uneforceable here. Boo!

    • Lucas Hall

      Hi Leigh

      Are you sure? There’s no statute that says you can’t require 60 days notice. Civ. Code §§ 1946 only says 30 days notice is the MINIMUM for monthly leases, and there’s nothing mentioned for fixed-term leases.

      Whenever someone tells me that something is “illegal”, I’ve gotten in the habit of asking “really?, can you show me the statute?”. Many times, a lawyer is giving his legal opinion as if it is law or fact, when it’s not. It’s just an opinion. A judge is the only person who can tell you that something is or is not enforceable.

      …just a thought.

      • Brook Balocca

        I was going to agree with Leigh on this one, but apparently there are some real fundamental differences between Oregon and California’s laws! In Oregon, you are not allowed to sign away your statutory rights. Any provision included in a rental agreement that asks the tenant to waive or forego any statutory right or remedy is unenforceable. Not only that, but if you attempt to enforce such a provision, tenant may recover actual damages and THREE MONTH’S rent! (ORS 90.245). As such, tenants that are required to provide a 30 day notice cannot be forced to provide a 60 day. Apparently California allows such provisions? Civil Code § 1953 sec. 3) or 4) may void such a provision, though I’m not sure how this section is used in proceedings there.

  • Carol

    Question, in New York State, does anyone know the law (if it exists) on witholding security, etc. for a tenant who seeks permission to get out of their lease? My lease currently says “If tenant should break lease any time for any reson, he/she will pay Landlor two (2) month’s rent and forfeit security deposit.”

    I am unable to find any statute on this. My tenants want to leave because of unexpected noise- not unreasonable, just routine. The guy is a “light sleeper”. I told them ok, but if I can’t rent before they move out this lease clause is enforceable.

    Thoughts anyone? I run an upscale complex and have no other complaints.

    • Lucas Hall

      Hi Carol

      If I were in your shoes, I would let the person out of the lease but charge him rent until a new tenant is found. Meaning, I’ll let him off the hook when someone else starts paying rent. If he wants to speed up the search, he can help by keeping the unit clean and possibly even hosting showings for me.

      After they leave, and I have a new tenant, then I would return the deposit minus actual damages.

      You could try to enforce the early termination fee, but if you want to play it safe, just charge for actual damages. … Just my two cents. Please know I’m not a lawyer nor is this legal advice.

      • Carol

        Thanks Lucas. Not meaning to scare them, just trying to protect myself with that clause. I pointed it out to them yesterday and they have decided to stay. Don’t really know if this is a good thing.

        Interesting that I spoke to an associate today regarding enforcement of the clause. She said that she did enforce it in small claims court–the judge told the lessee that they signed an agreement, etc. So it wasn’t settled in housing court, rather small claims. Interesting approach, good to know as a back up position!

  • Dan Hunter

    Not being an attorney, I know nothing about New York law, however as a well seasoned layman I believe that in areas like Manhattan, Bronx, Brooklyn, etc., those communities are so heavily occupied by tenants that a lease provision that is tough on tenants probably would not fly in court. The judge has too many votes at stake to risk getting a reputation of being pro-landlord. Because he doesn’t want to lose the next election he would deem it impractical to allow a clause like that to be enforceable in his own courtroom. Landlord/tenant law is a political football in most courts.

  • Carol

    Thanks for the comment, New York City is very much pro-renter. Buffalo, not as bad but I do see your point about judges. The one time I went to court, it was the first day for the housing court judge on the bench. Didn’t go well–we all try to avoid court.

  • Sonja

    I have signed a 9 month lease, but I need to stay on a month to month until my new house is ready. How do I say that in my lease? I will give 30 day notice and not go beyond 60 or 90 days.

    • Lucas Hall

      Hi Sonja,

      If you’ve already signed a 9 month lease with someone, there’s not much you can do to alter it unless they agree to the change as well. A 9 month lease is a fixed-term with no month-to-month benefits.

      But if you were to modify the lease and change it to a month-to-month, I suggest to calling it a month-to-month with 60 day notice required from the day rent is due to terminate. Essentially, it’s a 2-month-to-2-month lease.

  • marsha shisman

    Lucas,

    I was so lucky to find you on internet. Learning so much from each of your presentations and shared articles. Please continue sharing your valuable knowledge.
    Happy New Year. Let 2016 be your best in personal life and in your business

  • Lisa

    Can a landlord in Pennsylvania require 3 months notice of intent to leave from a tenant? It seems excessive. Who knows 3 months in advance that they may have job or life changes?

  • Michael

    Question – If a tenant signs a lease agreeing to a 60-Day notice policy, but at the end of the lease decides not to renew and only gives a 40-Day, is the landlord legally able to charge the tenant for the remaining 20 days so long as the unit is vacant?

    Meaning the tenant has fulfilled the lease, but did not give the agreed upon 60 day notice.

    This is for Washington DC if that makes a difference.

    • Lucas Hall

      Hi Michael,

      If the tenant failed to give proper notice, the landlord can hold the tenant responsible for those extra days. However, the landlord can’t double dip on the rent. If the landlord is able to find a replacement before the 60 day notice period is up, he would not be able to collect rent from two parties. Does that make sense?

      • Mary

        I failed to give a full 60 days notice, instead giving 40 days notice that we would not be renewing our lease. So we were told we would be responsible for 20 days of rent after the lease expires. Can they extend the lease another 20 days legally? Are we responsible for the cost of utilities and care for the home during those 20 days? Also, will they take the penalized “rent” of 20 days out of our security deposit? If so, is that legal? They have someone moving in on the 21st day, so the home will sit vacant. Thanks in advance!

  • Nicole Quaintance

    Hi Lucas, thank you for all the effort and advice you put in to this website, it is such a resourceful tool! I am a first time landlord of a single family residence and my tenants are coming up to the end of their lease. I plan on offering them a renewal without an increase in rent and am going to send them a friendly email “reminder” if they choose not to renew their lease. I’m wondering what other formalities/steps do you take when renewing a lease, besides just signing a new agreement? Do I do another walk thru to document any damages, or wear and tear? Confirm employment/proof of income? Also, I do plan on adding your “7 lease clauses” to the new agreement, should I tell them upfront that these changes have been added?

  • Jim Kincer

    We really appreciate your newsletters and information!
    It has been (and is) very helpful!
    Keep up the good work!
    Jim

  • Christie

    I’m in the same boat as Michael. If a tenant signs a lease to agree to a 60 day non-renewal notice agreement. The tenant only give 45 day notice, can the landlord charge the tenant for the remaining 15 days?

  • Shaleenee

    Great read Lucas! I’m in a situation where we forgot to send a moving out notice and is being charged for an additional month. The landlord didn’t send a reminder notice nor anything of that sort. I’m I to be blamed for the additional month rent or it’s the landloard didn’t do her job in sending that notice of reminder? Looking foward to hearning your opinion on this matter! Thank you.

    • Lucas Hall

      Hi, if there’s an end in your lease then no reminder is needed. The date is already stated therefore it’s already known well in advance (IMO).

  • Frank Maraschino

    Interesting topic. I’m curious, why would you need 60 days to market your property and find a new tenant? This clause seems most beneficial to the landlord in slow markets, though in a slow market tenants have more leverage and balk at its restrictiveness. And even if you began marketing your property 60 days from start of lease, how many tenants are looking for a place to rent two months from now?

    • Lucas Hall

      Hi Frank

      I’ve think that the best tenants are those that don’t wait until the last minute to prepare for a move. In fact, I tend to get the most applicants between 30-45 days from the new lease start date. To capture that wave of applicants, I have to start marketing 60 days before. If you’ve not tried it, give it a shot. It might surprise you.

      • Robert

        Thanks for the great info! From my research I found that a tenant can give 30 day notice ANYTIME during the month after the lease period so having 60 days protects you from a mid month vacancy.

        Im in a situation where the tenant gave 30 day notice on on the end of their lease which started on the 7th of the month. This lease was grandfathered in so you can see my dilemma now preparing apartment and trying to reduce loss due to vacancy for that whole month!

        • Lucas Hall

          That does sound like a tricky situation. Some state laws do require notice be given 30 days from the date that rent is typically due, so that could only be mid-month if their rent due date is mid-month. Other states don’t have any laws on this.

          • Robert

            Just adding for readers: “You can give the landlord notice any time during the rental period, but you must pay full rent during the period covered by the notice. For example, say you have a month-to-month rental agreement, and pay rent on the first day of each month. You could give notice any time during the month (for example, on the tenth). Then, you could leave 30 days later (on the tenth of the following month, or earlier if you chose to).” http://www.dca.ca.gov/publications

  • Mimi Louizi

    Hello

    I got a renewal notice that gave me until September 1st to give my 60 days notice, I then received a 2nd notice that said I had until October 1st. I went to the rental office where the young lady told me I was late by 6 days because both notice was incorrect and that I will be charged $195.00 for informing them of my non renewal late. I live in Miami FL do what if anything can be done?

    Thank you in advance,

    Mimi

    • Lucas Hall

      Hi Mimi,

      I can’t really give any advice here because I haven’t seen your lease, nor am I a lawyer. But in my professional opinion, it seems like they screwed up here, and they shouldn’t hold you responsible for it. On the other hand, if your lease end date, and the notice requirement is clearly stated in the lease, then they shouldn’t have to remind you. I hope that helps. Sorry you’re in this situation.

  • Roger Pack

    So what’s your letter when you *do* intend to raise the rents? :)

  • Demarcus Green

    After giving my 60 day notice, do i still have to pay rent for the apartment

  • Emily

    I am an owner LIVING IN a three flat in Chicago. I took over a building with tenants in it & moved into one of the units after the tenants in one of the units moved out. There is a lease in place with a set of tenants that expired on Dec 31, 2016. I verbally let them know that I would not kick them out during winter, & would extend their lease until the end of Feb. I need to do renovation & have bills to pay. I am being told that because it is not spelled out in the lease, that their lease is now automatically renewed for a year. The old owner began the lease in May of 2016. I thought it became M2M and as such, gave proper notice. I offered a settlement to work with them & help extend the date a month – they now went radio silent. Options?

    • Dan Hunter

      Hi Emily, You need to see a competent attorney. In some states that lease has to be recorded with the county in order to be binding on the new landlord and in some states this is not the case. I hope you received the current leases at the closing of your purchase. And by all means avoid any verbal agreements in the future. Good luck !

  • Dana

    I live in VA and my apt initial leasing period is ending. The agreement notes:
    “Lease Term shall be extended automatically as a month to month lease upon the same terms and conditions as set forth in Lease (“Extended Term”). If Lease is extended, Notice to terminate Lease at the end of the Extended Term shall be given by one party to the other no less than 30 days prior to the next Rent due date. Extended Term shall end on the last day of the month.”

    Four days before the end of this leasing period, I am now being asked to sign a year extension. When I questioned, I was told that it is not an automatic renewal because the landlord has the option to extend. Is this allowed? Many thanks!

  • Dan Hunter

    Hi Dana, Customs, practices and laws will vary from state to state on questions such as this. If I were you I would call a local title ins. company in your state and he/she will recommend a qualified attorney to give you guidance in this area of law.

  • Sara Bjarnson

    We had a commercial lease in California for 3 years. At the end of 3 years, we sent a letter to landlord to renew for 3 years. They never sent us a new lease to sign. We had had some flooding in the lower building and they are not willing to fix anything. So we started looking for an other place. They called us up today, to tell us that our letter that we sent back in december to wish to renew the lease is bidding as a lease. Is that correct?

  • Jason

    I made the mistake of renting from someone who required 60 days instead of 30. Total scam that only benefits the landlord and screws the renter. One month is plenty. And if you can’t find anyone tough. Your problem. I’m not paying for your place to sit empty because you can’t find someone. I should have to pay for when I’m in your place that’s it. Thankfully I bought and never have to put up with landlord BS again.

    Not that I ever had a problem besides the 60 day scam……….

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