The tenant renewal process can be a complex procedure for landlords, but one that is crucial. Not only do you want to keep your renter happy, but you want to keep your property off the market as long as you can. In this blog, we will walk you through each step of the tenant renewal process and how to secure a seamless transition between rental agreements.
Before you reach out to the tenant, make sure to refamiliarize yourself with the current lease agreement and the renewal clause. This will remind you of the specific process, timing and details around potentially renewing this rental agreement. The renewal period policies can change through the provinces and their respective cities and towns, so make sure to check your local laws before proceeding. This process usually begins around 30-60 days before the expiration date.
Once you have reviewed the agreement, reach out to the tenant. During these initial correspondences, explain the situation and determine each person’s intentions moving forward. If you are planning on selling the property or looking to renew the contract, this needs to be explicitly stated. Also, ask them if they are interested in renewing their agreement. Regardless of the intentions of either party, this process needs to be done well in advance of the contract expiration date. In the case that the tenant needs to find a new home or the landlord needs to conduct renovations and/or find a new resident, doing this well in advance will give each party time to prepare.
If both parties are looking to renew the contract, set up a meeting to discuss the terms. This could be an increase in the duration of the new lease agreement, rent changes, prospective repairs, scheduled maintenance checks as well as any other terms that need adjusting. If you are looking to increase the rent, make sure to set it at a reasonable price that is fair for both you and the tenant and explain why you are making such changes. If the tenant is on the fence with signing the new agreement, see if you can add some incentives to spark their interest. This could be things such as a free month of utilities or a complimentary service – like a free carpet cleaning or free pressure washing to the exterior of the property. This meeting is about negotiating terms that work best for everyone and finding a suitable compromise.
Once the details have been confirmed, it’s time to draft up a lease renewal agreement. This will outline the new terms – along with the old terms being carried over from the last contract – and clarify any changes being made. Review this a couple of times to make sure all the agreed upon terms are mentioned and reflected accurately. For legal reasons, it may be in your best interest to require signatures, making the contract binding. Once the tenant has signed it, create multiple copies – both physical and digital – and store them each in a safe space. Arrange for any potential payments or deposits to be made to close out the tenant renewal process.
If you find yourself in a position where the renter does not want to renew their lease and/or is not receptive to the new terms of the agreement, you can send them a notice to vacate. Once the property is vacant, you can begin the listing process.