To Renew or Not to Renew (lease) - Posted by DET

Posted by chi ming on August 04, 2010 at 23:27:38:

Tenants don’t usually change for the better when you
give them what they ask for. The most you can hope for
is that they stay the same. I would give the tenant
the choice of either a much higher month to month
(satisfying his “opt out” clause) or a lease (make sure
there is a rent increase there) or move out one the
last day of the lease. Let him know that if you don’t
hear 30 days before the end of the lease, it will be
month to month with the 50% surcharge (or whatever is
normal in your market but make it on the high side).

To Renew or Not to Renew (lease) - Posted by DET

Posted by DET on July 30, 2010 at 16:36:24:

I wrote last year about a PITA tenant who kept making
demands. He finally calmed down after we spent a small
fortune making him happy. In any case, our one-year
lease required 60 days notice for renewal (i.e., by May
1). No word by May 1 so we asked if he intended to
renew. He kept stalling, then sometime in June he
finally said that he did.

Unfortunately, two days after he agreed to renew the
home was broken into at night while the tenants were
sleeping (tenant said he chased the guy off with a
butcher knife). It turns out that there have been a
rash of burglaries around the neighborhood for several
months (very unusual for this area). Tenant then says
the wife insists that they move out. We start working
with an agent to list the property.

About a week later the tenant gets back to us and says
that things have calmed down, he’s starting a new
business and doesn’t have time to move, and he can’t
find anything anyway in the school district. So now he
wants to renew the lease, but he wants a 60 day opt-out
clause. We say no (much easier to find a tenant during
the summer).

Tenant gets back and says OK, but he wants to add some
repairs to an addendum to the lease. We ask what the
specific repairs are…more stalling.

Finally, today the tenant gets back to us identifying
the repairs (which are reasonable, most concerning
security enhancements), but he wants a mutually
agreeable opt-out clause in case “we decide to leave
and a tenant can be secured to extend into the next
summer period” (the wife is still spooked).

Bottom line…I think the tenants wife will insist on
moving if they can find another property in the same
school district at the same rate (not so easy),
especially if the crime wave continues. No way do I
want this guy finding us a replacement on the cheap
(e.g., Craigslist). But I’m concerned about relisting
the property at the present time under these
circumstances (the break-ins) - also prefer not
to lose a months rent as commission. The days on market
for the area had been

Re: To Renew or Not to Renew (lease) - Posted by James - Michigan Investor

Posted by James - Michigan Investor on July 31, 2010 at 09:55:14:

If it were me, I’d keep the current tenant…BUT, I’d play ball according to MY terms.

Charge them for everything, put nothing in writing. No delay on payments, no nothing. Period. If they don’t like it, find a new tenant.

Simple. As. That.


Re: To Renew or Not to Renew (lease) - Posted by Beachbum

Posted by Beachbum on July 30, 2010 at 22:58:38:

Wow…sounds like the tenant has you well trained!

Without knowing your specific market, or the property
in question, I can only say that I would never re up a
tenant like that. Once they passed the 60 day notice
period without committing to renewal, I would be
sending them a reminder that failure to vacate by the
end date makes them a hold-over tenant, subject to
penalty as your local statutes state (often double the
stated rent).

If you insist on negotiating, remember it is a TWO WAY
street…he wants something, what’s he giving you?
Typically I charge a higher rate for month to month or
short term renewals than I do for a six month or year
term, when it is for the TENANT’s convenience. You are
an investor- you want a stable, long term cash flow.
Time spent renegotiating and re-writing rental
agreements is non productive time.

As to repairs, is the house that old that stuff is
falling apart in a year? Or is the tenant just careless
and/or has friends that bust stuff up? A leaking faucet
is one thing, but repainting, new flooring, or whatever
else is on his wish list is bogus. It was rented as is,
right? You maintain it in that condition…if you make
improvements, the rent should go up accordingly.

I have been a property manager for 15 years, and paying
anyone a month’s rent as commission (residential) is
robbery, unless you have really researched PM charges
for your specific locale.

Bottom line…assuming the property/location is
reasonable, GOOD tenants are far more plentiful than
BAD ones. I move out bad ones at the earliest
opportunity, and advise incoming tenants exactly what
is expected and what happens when I am disappointed.
Then I follow through regardless of any song/dance on
their part.

Life is too short!

Re: To Renew or Not to Renew (lease) - Posted by Woody

Posted by Woody on July 30, 2010 at 19:42:09:

Sounds like you are in the northeast? 15 days to place another tenant is nothing, but I do understand loosing a month’s rent. When I have hassel tenants I will extend there lease as a month-to-month term. I can get them out easier if needed not being held to full year term. You’ll just have to risk them maybe not staying through to next summer. But if they hang for a few more months, I dought they will be moving when winter hits.

Re: To Renew or Not to Renew (lease) - Posted by michaela-CA

Posted by michaela-CA on July 30, 2010 at 19:33:55:


here’s my 3 cents: Tell him you do the repairs, but without opt-out clause. They’re just stalling. If they’re trying to stay in the same school district, then they’d probably still be in the same neighborhood, that has the crime wave. So, there might not be a benefit for them to move. And since the house has been hit now, they would probably have a better chance to get hit again in a new house, than in the same house.

If they were to sign a lease somewhere else, they’d have to commit themselves. So, I would put my foot down on this and not agree to any opt-out clause. Or you can look at rates for similar places on short-term basis. They’re usually quite a bit higher. So, maybe you can offer them short term for $ 500 more or so.

They can’t have their cake and eat it, too.


Re: To Renew or Not to Renew (lease) - Posted by DET

Posted by DET on July 31, 2010 at 11:24:41:

Thank you for your comments. In hindsight, we should
have nipped this in the bud early on. He just submitted
some more repairs (again, not unreasonable). The house
is WW2 vintage, and it does need some work. I doubt
that the tenant ripped it up (former FBI agent with a

Re the commission…a month’s rent is standard here to
list a property and find a new tenant (half to the
selling agent, half to the listing agent). Actually, I
think its a bargain for a good agent and a good tenant.
I just have competing priorities right now.

We’ve rented to dozens of tenants before in several
different properties and this is the only one that
we’ve had significant problems with. Actually, I take
that back…lawyers are a real pain to deal with as
tenants. Until or unless lawyers become a protected
class, I don’t think that I’d ever rent to a lawyer

I agree - Posted by chi ming

Posted by chi ming on August 04, 2010 at 23:23:43:

Especially since the tenant has already been a PITA and
shows no regard for the rules set down in the lease that
they agreed to.