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Lease Renewal Agreement

This Agreement is entered by and between Jonas Adam, individually or collectively as the "Signee" and Jane Smith, as the "Signer", together referred to as the "Parties".
The Contract is dated [the date both parties sign].

1. Agreement terms

The Parties agree that the following agreement is dependent on the terms presented as follow:

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Congratulations! You and your tenant have completed the first rental period with no hiccups, disasters, or lawsuits. Every landlord knows how incredibly difficult it can be to find responsible and dependable tenants. And every tenant has their own landlord nightmare anecdote. If you have found an agreeable rental situation, your best bet is to extend it for as long as possible. 

Month-to-month rentals are common at the end of a rental period, but they tend to favor the tenant over the landlord. If you want to extend the original lease, make your intentions known to your tenant and begin negotiating new terms if necessary. 

Once you both agree, how do you actually formalize the changes? Do you create a new lease? Replace the dates on the original? The cleanest solution is to create a lease renewal agreement. 

What Is a Lease Renewal Agreement?

A lease renewal agreement is a simple document that extends your property lease for a desired amount of time. These are sometimes referred to as lease extensions, renewal letters, or residential lease renewals. They all amount to the same thing - adding more time to your original lease agreement without redoing the entire document. 

woman standing near brown wooden cabinet
Moving out of a well-loved apartment can be a major hassle. (Source)

A lease renewal agreement can include changes to other terms, but must also address the rental time. A contract that simply modifies terms of a lease outside of the rental period is known as a lease amendment or lease addendum

Why Would I Use a Lease Renewal Agreement?

The main reason to use a lease renewal agreement is of course to modify an existing lease. If you and your tenant wish to continue your rental arrangement, this contract helps document the change. It can be a quick and easy tool if you are only looking to renew the lease with no additional changes.  

It can also be used to create a longer rental period than the original lease. Say, for example, the original lease was month-to-month but you are both now more comfortable with an annual lease. A lease renewal agreement can formalize that change and prevent you from having to renew on a monthly basis. However, the profitability of short-term vacation rentals is making many landlords think twice about long-term commitments. 

If you decide that you want to ask your tenant to renew, it can be helpful to incentivize them. Research market rental prices first to see if you need to increase the rent. If it isn’t necessary, a stable rent price can be a strong motivator for a tenant to renew long-term.

Renewal provides an opportunity for you both to discuss any work that needs to be done on the property, the addition of any roommates or pets, or changes to payment policies. For example, the tenant may be willing to stay if you replace the faulty back windows. If this is something you knew you already needed to do, it’s an easy decision. You should balance their requests against the cost of a potential vacancy.

Benefits of a Lease Renewal

Being assured of a longer-term rental arrangement will be more cost and time-effective for both the landlord and the tenant. Here are some of the expenses a tenant may incur if they have to move out of their residence:

  • Moving company or van
  • Packing boxes and materials
  • A new security deposit
  • First and last month’s rent at a new residence
  • Application fees
  • Fees to change or terminate utility services

Here are some of the expenses a landlord may incur when finding a new tenant with little notice:

  • Advertising fees
  • Expedited cleaning fees
  • Expedited repair or renovation fees
  • Background check fees
  • Time lost in interviews and applications

Finding a new tenant can cost landlords anywhere from $100-$1,000 or more. And with that comes the risk of acquiring a bad tenant. Ask yourself, “Is my current tenant reliable? Does she pay the rent on time? Does she respect the property?” If so, you are better off asking her to renew. If you are not planning to renew the lease, you should ask your tenant to provide notice of their intent to vacate and provide them with a security deposit return letter if applicable. 

Person Holding Pencil
A negligent tenant can be very costly over time. (Source)

When Should I Prepare a Lease Renewal Agreement?

A lease renewal agreement should be in place before the required vacancy notification period of the original lease. If the tenant is required to provide 30-days’ notice before ending a lease agreement, the tenant and landlord should make their desires to renew known before then. This allows enough time for the tenant to find new lodging if needed and for the landlord to begin finding new tenants. 

Some states such as New York have actual laws governing lease renewals, so make sure to check your local requirements before proceeding. Generally speaking, the more advanced notice you can give, the better. Waiting too long runs the risk of losing out on a great tenant who already found new housing because the lease was about to expire. 

Is It Really Necessary?

You can certainly continue your rental agreement without a proper lease renewal contract in place. It is a common practice, and many landlords are more comfortable with month-to-month rentals. However, if you do want to guarantee some protection for yourself (as either tenant or landlord), you should seriously consider the lease renewal. 

Monthly leases expose tenants and landlords to a great deal of risk. Tenants may choose to vacate with very little notice, or landlords may decide to charge higher and higher rent. It introduces a lot of uncertainty into an arrangement that could be more secure for both parties. 

So, while it is not necessary to prepare a lease renewal contract, longer rental terms create opportunities for both tenants and landlords. A long-term lease renewal provides stability for a tenant who may be afraid of having to find new housing on short notice. It allows landlords to spend less time advertising, cleaning, or renovating property between tenants. 

What Do I Need to Include in a Lease Renewal Agreement?

A lease renewal agreement can be as simple or complex as needed. A simple contract will state the names of the parties, the date of the original lease, the new rental dates, and signatures from both parties. This will allow all terms of the original lease to stay consistent except for the rental period. 

If either party wishes to modify other aspects of the original lease, they can usually be addressed in the renewal document instead of necessitating an entirely new lease. Some of these additional items that you may wish to include in a renewal agreement include:

  • Changes to the payment schedule
  • Changes to the payment method
  • Changes to the fee structure
  • Changes to the occupancy
  • Addition of a pet policy
  • Addition of pet rent
  • Changes to the maintenance responsibilities of tenant
  • Allowances for improvement to the property
  • Addition or removal of subleasing restrictions

All renewal documents will need to contain up-to-date contact information for both parties. If that has changed since the original lease was signed, update it in the renewal. Make sure to include property details (such as the address). Include a simple statement indicating the intent to renew the original lease and modify the terms as described. 

A lease renewal agreement presents a great opportunity for tenants and landlords to formalize a relationship that has proven productive and efficient.  Leases offer protection to both parties and help ensure that everyone’s rights and responsibilities remain clearly defined and respected. 

What is a Lease Renewal Agreement?

A Lease Renewal Agreements is a contract that will extend your lease for an additional amount of time when it is expiring. These forms are useful when a tenant and landlord want to continue the rental agreement together. These allow you to continue your relationship while making a few changes to rental terms formalized and getting them on record. 

A lot of rental apartments make beautiful living spaces for people who do not want to own homes. (Source)

Lease renewals are perfect in situations where you want to allow your tenant to extend their lease, or for when a renter you like has asked to extend their lease agreement. Although there is legal room for an automatic month to month agreement after a lease expires, a long term agreement may benefit both parties. This allows for time to discuss repairs, changes to rent, and new policies that are enacted. If the landlord or tenant decide not to extend or renew the sublease, then it's best to use a notice of intent to vacate to give formal notice of the end of the rental period. If the lease is ended and not extended, then ensure the security deposit return is formalized in a letter as well.

These agreements are also known as Residential Lease Renewal Agreements, Lease Renewal Forms, Lease Extension Forms, and Lease Renewal Letters. The letter is a great way to notify a tenet that their lease is coming to an end if you want to discuss a renewal. 

What do I need to include in a Lease Renewal Agreement?

Our sample Lease Renewal Agreement template contains all the necessary information and basics that you will need, but if you want to go into more detail and customize your template fully, here are some things to include.

Make sure that both the landlord and renter's names and contact information are included. You also need to state the address of the property that is being rented. You should reference the original lease, and detail that this is an extension of that lease. If there are any changes or new terms, then you will need to state anything that differs from the original rental agreement's terms. Finally, include a date and signatures from both parties.

Essentially, this document should include contact information from both parties, the property details, the name and date of the original sublease agreement, the terms and timeframe of the extension you’re making, the amount of rent that will be charged each month, the full force and effect clause (a statement that, aside form specifically detailed changes, the original lease agreement will otherwise remain in full force and effect), the laws that will govern the agreement, and both signatures. If the parties are not in the same location, you will also need counterparts for signatures. 

If you've created a separate roommate agreement, note that the lease renewal agreement is usually separate from that.

What happens if I don’t use a Lease Renewal Agreement?

In the best case scenario, nothing happens. You continue to rent from your landlord on a month to month basis under the same terms as your original lease. As a best case, this relationship will remain entirely the same.

Positive relationships between landlord and tenets can benefit from a Lease Renewal Agreement! (Source)

That being said, month to month leases leave a lot more room for changes that you don't necessarily agree to. Landlords can negotiate for higher rent each month. They may undertake this action out of fear because under a month to month leases, your landlord can never be certain of when you might move out of the complex and leave them with an unexpected vacancy.

This is also bad for a tent because they will forfeit their ability to negotiate when repairs need to be made and are also never certain of whether a landlord will deliver a 30-day notice forcing them to move away before they want to in favor of a guaranteed, long term renter. 

The agreement may also save you time and money. Landlords won't have to market your vacant property, pay to clean, make repairs, or renovate. They will also be assured that there isn't a lapse in the lease between renters.

Tenets won’t have to hunt for a new apartment, pay to move everything, and possibly pay double the rent between move-ins because of both leases being in effect. This is essentially a great way to keep a good situation going when both parties are happy.

For landlords, if you don’t have a Lease Renewal Agreement, you may end up losing money. The property may stay vacant for long periods of time, where you aren’t making money on the rent. You will have to pay to repaint the property and make repairs and pay additional money to list t and market the vacancy. 

You will also lose time showing the property to dozens of prospective tenets. More time and effort will be spent screening the applicants before choosing one to rent to.  Even if you do keep the same tenet, you will spend tons of time renegotiating the lease agreement’s new terms. Finally, you will endure a lot of stress having to get the property ready for new tenets to move in, and you won’t be sure whether the new tenet will be as reliable as the current one. 

Tenets could also lose a lot of money. If they have to move, they will be responsible for paying moving costs, which can include movers, renters, a truck, and a security deposit on the new place. During the overlap after the 30-day requirement, they will also have to pay double in rent, because they’re paying for both properties. If they go through a broker, additional fees apply, and even if they don’t they still have to pay application fees to the new place. 

They will also lose time having to hunt for a new place to rent. They will need to renegotiate the lease agreement if they end up staying, and they will spend tons of time packing and moving if they go. Finally, they will also have a lot of stress. They’ll need to get used to a new neighborhood, learn new commutes to and from work, and won’t know whether they’ve made a good choice with their landlord. 

When should I prepare a Lease Renewal Agreement?

It is really quick and easy to work from a sample Lease Renewal Agreement template like ours, but you do want to work one up with enough time to negotiate new terms and get everything signed smoothly.

If your agreement is expiring soon, then you will want to consider the Lease Renewal Agreement as a quick and easy method of ensuring that your sublease agreement gets extended. Some Lease Agreements even come with an option to renew clause that allows the tenet to automatically extend the term of their lease in lieu of the landlord pushing them out in favor of new tenets. 

When there is a healthy relationship between a landlord and their tenet, Lease Renewal Agreements are quick and painless ways to ensure a mutually beneficial relationship and can be signed less than a week before the lease expires. Still, it is a good call to have this ready in lieu of 30 days’ notice. If the landlord or subtenant are considering ending the lease, then it is best to use a notice of intent to vacate to formalize that. Consider implementing this at that time. If you are a landlord ho likes the tenet, offer them a Lease Renewal Agreement along with their letter informing them that their agreement is coming to an end. If you’re a tenet, instead of offering a 30 days’ notice when you are coming to the end of your lease, consider offering this instead.

If either of you has some terms you’d like to discuss or adjust, leave enough time to negotiate. A lot of people like to change the monthly rent, negotiate for newer appliances when old ones occur, or even negotiate the pet policy to allow the adoption of an animal. 

Change of Address Letters

A change of address letter is utilized by those that are moving. This can be an easy detail to overlook as moving can be stressful and exciting simultaneously. There are going to be a myriad of people to notify including doctors, employers, and service providers. Even your current landlord should receive a letter so they know where to send your security deposit. 

Below are details that you need to include in a change of address letter:

  • You simply need to notify different people and companies. This can be in a formal manner or in simple language. 
  • The inclusion of account numbers for companies will be helpful in identifying you as a customer.
  • The new address will be included in the letter in a clear manner.

Changing your address with various entities can be tough as it can be easy to forget certain companies or people to notify. 

Security Deposit Return Letters

A security deposit return letter can be great news or negative news depending on how you treated your rental. This letter will outline the expectations of the landlord when a lease is ending. The condition that a rental is in can incur a cleaning fee as an example. Damage to appliances or holes in the wall will also be subtracted from a security deposit. 

Below is what a landlord should include in a security deposit return letter:

  • The use of the security deposit in terms of charges need to be listed explicitly. 
  • Indication of whether the lease was broken or not.
  • The dates that the property was rented. 
  • An estimated return date is also a nice addition. There are some renters that rely on that deposit to put down on another rental. State laws differ immensely on the timeframe a landlord has to return a security deposit. The amount of time ranges from around a few weeks up to 60 days!

Signatures of both parties are required in order for this letter to be legally binding.

Lease Agreements 

Everyone that has rented a property has signed some form of a lease agreement. Lease agreements protect both the landlord and the renter. With a proper lease, a renter cannot be evicted without proper reasoning. This also protects the renter from price increases in rent over the duration of their lease. The landlord has the agreement in writing that they will be paid a certain amount per month and leases are legally binding. 

The following are the details a lease agreement should include to ensure both parties are protected:

  • Names of the renters and the landlord.
  • The address of the property that is being rented.
  • The price per month for rent.
  • The length of the lease.
  • Reasons for termination of a lease and security deposit information.

Lease amendments can be made if both parties agree to change the original lease. Renewal of leases can also be a document where changes to the original lease are documented. Writing up the perfect lease template can protect a landlord in the case of legal action by the renters. Expectations being outlined could not be more essential. There are far too many nightmare renters that landlords need protection from.

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