• What to Do When It's Time to Renew a Bad Tenant

    Everyone has that one tenant – the difficult resident that has you counting down the days until the end of their lease. But then it happens. They tell you they’d like to renew. And the last thing you want is another year of late payments, unrealistic requests, or noise complaints from neighbors.

    Do you really have to renew their lease?

    You aren’t obligated.

    As with most lease agreements, you are entering into a fixed-term agreement with your tenant. Just as your tenant wouldn’t have to declare reasons for not renewing the lease with you, you typically aren’t obligated to give a reason for not offering up the property for a lease renewal, although you should of course always check local laws.

    But it can’t be an act of discrimination. 

    You should have legitimate reasons for not renewing any tenant’s lease. For example, if they are habitually late paying rent this is a valid reason for you not to grant a renewal; however, if they have expressed political views you don’t agree with, practice a religion you don’t approve of, or have filed a valid action against you for something that happened during the lease term you cannot choose to not renew on those things alone, for example.

    You need to give them a heads up.

    Each state will vary in its requirements for notice to your tenant that you won’t be renewing the lease, but the standard is one month. Ideally, you should have outlined the notice period in the original lease agreement.

    Aside from being a requirement, giving your tenant notice that you won’t be renewing their lease will give them time to make other arrangements to move out and to find another place to live. This will also avoid more complications or confusion come the end of the lease agreement.

    You may just be saving your other tenants!

    It can be a difficult decision to not renew one of your tenants, but you always need to think about what’s best for the building and your business overall.

    If the tenant is noisy or destructive, good tenants in the building may not renew their own leases due to one bad egg.

    And if your bad tenant is causing damage to your rental property or not paying rent on time, you may be losing more money on a tenant than you would if you had to spend a few months with a vacant property looking for someone new.

    It’s important to weigh your options when faced with a bad tenant, but as long as you give the tenant adequate notice and respect the terms of their lease agreement you should have no problem releasing the troublesome tenant. Is it time to find a new tenant?