Notice of Non-Renewal of Lease: Letters for Landlords and Tenants
In many jurisdictions, there's no legal obligation to justify a decision not to renew a lease, though California stands as an exception, requiring just cause. Regardless of legal requirements, providing your tenant with a reason for non-renewal is a courtesy that can benefit both parties.
It allows the tenant to learn and grow from the experience and shields the landlord from potential allegations of discriminatory practices. Ultimately, tenants and landlords have unique reasons for choosing not to renew a lease, whether for personal growth, financial considerations, or property management objectives.
A clear and thoughtful non-renewal letter is more than just a formality; it’s a bridge to a respectful and transparent landlord-tenant relationship as the lease agreement ends.
Reasons to not renew a lease
In many parts of the country, you don't need to provide an explicit reason for not renewing a tenant's lease. Although the only state that legally requires just cause is California, many cities and smaller municipalities within each state mandate just cause.
Whether required in your particular area or not, you should take the time to present a reason in your non-renewal letter out of consideration for your tenant. If there's something the tenant can improve upon as they enter their next lease with another property management company, providing reasons the tenancy was less than ideal can help them be a better renter in the future.
Furthermore, providing a valid explanation for the lease non-renewal will avoid misunderstanding that the termination was illegally motivated by discrimination or retaliation.
Both tenants and landlords have a say in whether they'd like to renew a lease, and each has their reasons for opting for non-renewal:
Tenant non-renewal motivations
A tenant's desire to seek out a new home can be motivated by personal life changes such as moving for work, looking for a cheaper or larger rental, or deciding to purchase a home.
However, a tenant might feel compelled to leave due to factors within your control as the landlord, such as poor property management.
Landlord non-renewal motivations
Financially driven and interested in protecting the integrity of their investment property, a landlord could refuse the renewal of tenants' leases if they consistently pay rent late, have caused significant damage to the property, or have disrupted other tenants.
Rental property owners may also be looking to make extensive renovations requiring the property's vacancy, or they might choose to sell the property.
The significance of a non-renewal lease letter
A lease is a legally binding contract, and as such, any decisions concerning it should be made in writing so that both parties have documentation to refer back to should any issues arise.
For example, suppose a tenant's lease ends without renewal on October 1, and the landlord tries to demand money to pay for damages made to the rental unit that following December. In that case, the tenant can point to the written notice to prove that the landlord's accusations are unfounded and occurred after their tenancy ended.
Providing sufficient notice of non-renewal of lease
So, you've decided not to move forward with the tenant currently renting your property. You're probably wondering: How much notice am I legally required to give?
You'll want to start thinking about whether or not to renew your tenants' leases well in advance, as it's generally expected that landlords and tenants alike provide notice of non-renewal of the lease at least 60 days before the lease expiration date.
Though 60 days might seem like a lot, these two months allow your tenant ample time to find a new place, pack up their things, and move. The more time a tenant has to emotionally and physically prepare for a move, the less likely they are to be resistant to the idea or resentful towards you, the landlord.
Providing advanced notice also gives you time to start marketing your property and screen new applicants or to schedule renovations to the property for after the lease expires and the tenant moves out.
Each state and municipality has regulations surrounding the non-renewal notice period, so if you're operating on a shorter timeline than 60 days can offer, ensure that your decisions align with local laws.
Notice periods also differ according to the lease term -- year-long lease agreements will typically require a more significant notice period than month-to-month agreements.
Writing a lease non-renewal notice: Templates for landlords and tenants
If you put yourself in a tenant's shoes, receiving notice that you have been denied the option to continue living in your current rental property can be jarring, and the thought of packing up and moving can feel frustrating.
To mitigate some of the tenant's stress, you'll want to provide as much information as possible about the lease non-renewal. Being thorough but concise in your letter will prevent misunderstandings and unnecessary back and forth between you and the tenant.
Information you'll want to cover in your lease non-renewal letter
Provide all of the following in your written notice:
- The date that you wrote the letter.
- The tenant's name and address.
- The landlord's name and office address.
- The lease termination date.
- The number of days notice you're providing at the date of writing the letter.
- Your reason for not renewing the tenant's lease (optional in many parts of the country).
- Tenant obligations include scheduling a carpet cleaning before moving out or returning the keys.
- The security deposit amount and the return policy.
Your letter must comply with state and local laws and the lease agreement, so refer back to these documents as you write your letter.
Lease non-renewal letter template for landlords
[Your business's address]
[Date of the letter]
[Rental unit address]
Dear [Renter's name],
This letter is a formal notice that your lease at [rental unit's address] will not be renewed after [final lease agreement date]. [Optional: reason for non-renewal]. This letter will serve as your [#] days' notice of non-renewal.
You must vacate the premises and return all keys by [final lease agreement date]. [Provide move-out information, such as when/how a walk-through will occur, handling the security deposit, any cleanings the tenant must arrange, etc.]
I apologize for any inconvenience this might cause. Please do not hesitate to reach out if you have any questions or concerns-- I'd be more than happy to help. You can reach me/our team at [you/your property management company's email and phone number].
Lease non-renewal letter template for tenants
Dear [Landlord/Property management company's name]
I'm writing to inform you that I will not be renewing my lease. This letter will serve as your [#] days' notice of my intent to vacate the abovementioned property; my last day will be [date] [last day of lease agreement], which is the last day of my current lease.
I look forward to my security deposit of [$] being returned in full, as I am arranging for [list any cleanings or maintenance you're obligated to schedule per your lease agreement], as agreed upon in my lease, before my departure.
Should you have any questions or concerns, please reach out at [email and phone number]. I appreciate your understanding.
What to expect after sending the non-renewal lease letter
Once you send a non-renewing lease letter, you're well on your way to having a vacated rental unit. To set the lease expiration date in stone and move forward with the next steps in your plan for the property, though, you'll just need to do a few more things:
Await acknowledgment of receipt from tenant
Though not legally required, asking your tenant to send you a signed letter or email acknowledging your official notice of non-renewal of the lease will serve as legal confirmation.
If a tenant stays after the lease expires, they won't be able to plead ignorance to the non-renewal, as you'll have evidence that they received your written notice.
Start marketing the property
Once you've notified the tenant of your intentions with the rental unit, you'll want to start looking for a new renter as soon as possible to avoid vacancies and loss of income after your tenant moves out.
Market your property extensively and screen applicants thoroughly with the help of tenant screening services like Azibo's. Consider what could make the next tenancy more successful, and look for those qualities in your applicants.
Arrange for any larger maintenance projects
If you've been holding off on conducting drastic maintenance projects or renovations, such as replacing old pipes or switching out carpets for hardwood floors, the time after your tenant moves out will be the perfect time to do so.
You won't have to worry about disrupting or displacing the tenant to make changes, and you'll have the rental property to yourself.
Schedule these projects in advance, and leave ample time between when one lease agreement ends and the next begins to complete all your desired repairs and improvements.
Be open to renters' questions during the lease termination process
Even after you've sent a lease termination letter, your tenant is still your customer and your responsibility for a couple of weeks or months. As such, you should continue to provide the same service level to them, including responding to their questions.
Whether they're curious about why you chose not to renew their lease or require clarification on how they'll get their security deposit back, supporting your tenant throughout the final days of their current lease will help keep them in good spirits, facilitating the move-out process.
One lease closes, and another one opens
Making the call not to renew a lease is a significant moment in the landlord-tenant relationship. Getting the legalities, reasons, and steps right in this process will allow the transition out of a lease to happen smoothly.
This notice isn't just a piece of paper — it marks the end of one chapter and the start of another for landlords and tenants. Keep it clear and compliant by providing ample notice, setting clear expectations, and documenting everything properly.
As we wrap this guide up, remember: it's not just about following rules but also about good communication and smart planning. So, take this pivotal moment in stride, use the insights gained here, and navigate the world of lease non-renewals with confidence and clarity.
Cheers to new beginnings and informed decisions in the rental property landscape!