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Lease Renewal Agreement

A lease renewal is a legal document that extends a tenant’s lease for a new term, effectively keeping the rental agreement active. This agreement typically retains the key terms and conditions of the original lease but may allow for negotiation of certain terms, such as rental amounts or other conditions. Once signed, it becomes a legally binding document between the landlord and tenant.

Definition of Lease Renewal

Definition of Lease Extension

A lease extension is a contract that further extends the term of an existing lease agreement without creating a new lease. This addendum establishes a new lease termination date that both the landlord and tenant agree to. While it may document changes to the rent during the extended lease period, all other conditions from the original lease agreement remain intact.

Key Differences Between Lease Renewal and Lease Extension

  1. Nature of Agreement:

    • A lease renewal is treated as a new lease agreement, while a lease extension continues the existing lease without interruption.

  2. Duration:

    • Lease renewals typically have the same or longer duration than the original lease, whereas lease extensions are often for a shorter period.

  3. Changes to Terms:

    • Lease renewals may involve significant changes to terms and conditions, including potential rent increases. In contrast, lease extensions usually involve minimal or no changes to the original terms.

  4. Initiation:

    • Lease renewals can be initiated by either party, while lease extensions are often initiated by the tenant, especially for short-term needs.

  5. Documentation:

    • A lease renewal requires a new lease agreement, whereas a lease extension can be documented through an addendum or may even be verbal in some cases.

  6. Rent Adjustment:

    • Lease renewals may allow for adjustments in rent based on various factors, while lease extensions typically maintain consistent rent, with occasional increases.

Process for Lease Renewal

  1. Send a Lease Renewal Notice: Notify the tenant of the intent to renew the lease, ideally 30 to 90 days before expiration.
  2. Negotiate Changes: Discuss any proposed changes to the lease terms.
  3. Update the Lease Agreement: Incorporate any agreed-upon changes into the new lease document.
  4. Sign and Store the Document: Both parties must sign the renewal agreement, which should be stored for future reference.

Process for Lease Extension

  1. Review Original Lease: Determine the end date and note any desired changes.
  2. Discuss Intentions: Communicate with the tenant regarding their desire to extend the lease.
  3. Send the Lease Extension Addendum: Deliver the addendum to the tenant, detailing any changes.
  4. Sign the Addendum: Both parties must sign and date the addendum for it to be enforceable.

Notice to Not Renew a Lease

If a landlord does not wish to renew a lease, they must provide a Lease Non-Renewal Letter to inform the tenant of their decision. Most states require landlords to give at least 30 days’ notice before the lease expiration, depending on the length of the original rental term.

FAQs

A lease renewal is a new lease agreement that replaces the original lease, often allowing for changes in terms such as rent. In contrast, a lease extension continues the original lease without interruption, typically maintaining all original terms and conditions, with only minor adjustments possible.

To write a lease renewal notice, include the landlord’s and tenant’s names, the property address, the original lease date, and the proposed new terms such as rental rate and duration. Clearly state the intention to renew and provide a deadline for the tenant to respond.

A lease extension addendum should include the names of the landlord and tenant, property address, effective date of the extension, new termination date, rent amount during the extension, and any changes to the original lease terms. Both parties must sign the addendum for it to be enforceable.

It is recommended to notify your tenant about lease renewal at least 30 to 60 days before the original lease expires. This gives both parties adequate time to discuss terms and make necessary arrangements.

If a tenant remains in the property after the lease expires without signing a renewal, they may become a holdover tenant, and the lease could convert to a month-to-month tenancy. This situation may limit the landlord’s ability to renegotiate rent or other terms.

Yes, a landlord can refuse to renew a lease once the original term has ended, but they must ensure that the refusal is not discriminatory or retaliatory against the tenant for exercising their legal rights.

Renewing a lease provides landlords with consistent rental income, reduces turnover costs associated with finding new tenants, strengthens landlord-tenant relationships, and offers legal clarity regarding updated terms and conditions.

To extend your lease, review the original lease agreement, discuss intentions with your landlord, and send a lease extension addendum that outlines any changes. Both parties must sign the addendum for it to take effect.

A lease renewal agreement is a legal document that extends a tenant’s lease for a new term, often allowing for renegotiation of terms such as rent. It serves as a formal record of the continued rental relationship between the landlord and tenant.