Lease renewal is a major issue of concerns of both property owners and tenants who are bound by a lease contract agreement. The issues of lease renewal has been a major bone of contention between property owners and tenants and most lease contract agreement dispute can be linked to problems associated with lease renewal such as lack of understanding of the terms of the lease agreement, the process of lease renewal and the grounds on which property owners can renew or not renew a lease. Lease renewal, besides non payment or holdover case is considered to be the major cause of disagreement between property owners and tenants.
We prepare this article to enlighten property owners and tenants and to guide them towards having successful and smooth lease renewal process. Lease renewal usually start with a notice of lease renewal offer written by the property owner and it is delivered to the tenant either by mail or by hand in advance usually five months, 150 days but not less than three months, 90 days before the current lease expires.
After the tenant receive the lease renewal offer he/she has just two months, 60 days to react to the offer sent by the property owner. The tenant has to state if he or she accept or reject the renewal offer. If the tenant accept the offer within the stipulated two months, 60 days by signing and returning the lease agreement to the owner. The property owner has one month, 30 days to send a duly signed, executed and dated lease agreement to the tenant. It must also be emphasized that a lease renewal is only effective on or after the date it is signed and returned to the tenant but not earlier than the expiration of the existing lease.
But if the tenant rejects the lease renewal offer within two months, 60 days the property owner may turndown lease renewal offer from the tenant and wait till the expiration of the existing lease before seeking eviction through court proceedings.
We strongly advice that tenants create time to study their lease agreement properly before signing it because some lease agreement already have automatic renewal clause and in such cases it is expected that the owner gives the tenant advance notice of the existence of these clauses between 15 and 30 days, after which the tenant is required to notify the property owner of his or her intention to renew the lease or not. The tenant must also be mindful of the fact that lease renewal terms and conditions has to be similar to the expiring lease, unless there exist a change in specific law or regulation the agreement must comply with.
Lets quickly look at how this affects a month to month tenant, this refers to tenants who have no lease contract and pay rent on a monthly basis. These are tenants who continue to occupy their rented property at the end of their lease and are usually treated as month to month tenants if the property owner accept their rent. In this type of arrangement rent increament is by both parties consenting but if the tenant does not consent to rent increase his or her tenancy can be terminated by giving appropriate notice to the tenant. This tenancy arrangement can also be terminated by either party giving at least a month, 30 days notice before the expiration of the tenancy. The owner of the property is expected to give advance notice of his or her intention to terminate the tenancy. If the tenant ignores the termination notice and refuse to move out, the property owner may commence an eviction proceedings.
Tenants must also understand the grounds on which property owners may refuse to renew their lease in case they seek a renewal and the owner refused or denied. Owners of property enjoy the benefit of owners occupancy, this simply means that the owner or any member of his or her immediate family needs the property for their personal use, the owner can as well refuse renewal offer if he or she can prove that the tenant is not using the property as his or her primary residence or if the property is to be demolished and reconstructed for other purposes permitted by law.
Finally, it is important to stress that it is mandatory and required by law for property owners to give a written notice of non renewal of not more than five months, 150 days and not less than three months, 90 days to the tenant before the expiration of the existing rent. The tenant will be entitle to lease renewal if the owner fails to give a non renewal notice within the specified period.
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