Lease Extension
Hi–I offered my tenant a one-year lease extension at the same rent they paid last year, and they stated that they were under the impression that the tenancy would automatically become a month-to-month since that is what they have done in the past (i.e. under the previous owner). I am not very comfortable with the…
Hi–I offered my tenant a one-year lease extension at the same rent they paid last year, and they stated that they were under the impression that the tenancy would automatically become a month-to-month since that is what they have done in the past (i.e. under the previous owner). I am not very comfortable with the idea of a month-to-month tenancy. Any advice on how to handle the situation?
“It’s a business and their life issues are not your problem.”
Snowman, you may have some “arrogance” issues yourself.
at the end of the day o ones getting sued for the balance owed on a broken lease.take that into calculations.
brokelin, if you had more experience and less arrogance you would know that re-renting mid lease can be challenging. Duh, of course you have the obligation to mitigate. That does not mean that the landlord absorbs the cost of the tenant’s life change, it means that the tenant does. Again, it’s business.
We had a similar situation and we offered tenants a 1 year lease stipulating that they could break the lease if they gave us at least 60 days notice, that way we’d (hopefully) have time to find a new tenant without losing any $.
I wasn’t suggesting that the tenants’ life issues were the landlord’s problem, snowman.
Rather, in a business decision, both sides are making their decisions based on what they anticipate in their lives, and decide from that what they want.
The landlord here wants his tenants to sign up for a new year. He can’t make them, however, and he knows this. He wants them to stay. He can say “sign a lease, or leave” – but if he wanted to do that, he’d have done it already, rather than looking for advice here.
So, both have things they want. Only way to get some of what they both want is to talk and work something out. That’s sound advice.
Telling him to tell them to sign or leave isn’t sound advice – if he wanted to do that, he wouldn’t be here. He already knows he has that option. And he hasn’t because he has risk there – he has to find another tenant if they leave. Even if the place is under market, as he thinks, he still may lose some rent while finding the new tenant.
And, I disagree with you about reasonableness. If you have a good tenant whose life changes mid-lease, it makes no sense to be a jerk and try to hold them to the lease – especially when the law in Brooklyn, last time I checked, requires a landlord to mitigate any damages by rerenting the place. Easier to not be a jerk and just rerent it, since you have to rerent it anyway. Luckily, my landlords, when I bought a place, or otherwise moved because my life changed (moved cities, etc.) were reasonable people. Reasonable people get further in business transactions than people like you, snowman, I guarantee it. For example, if one isn’t a jerk, a tenant leaving will often find you a good new tenant.
But I don’t know what the point of giving advice here is – this landlord clearly would rather come back and ask a bunch of strangers online what to do, yet again, rather than talk to his tenants.
Do all communicating by certified mail so they can’t say they didn’t know or that you didn’t say.
Thanks everyone for the feedback. How about offering a shorter lease term, i.e. 9 months? I don’t want to make an offer for lower rent, as the rent is already slightly below market.
If they have the ‘maybes’ outlined by broklin, that is exactly the reason you want a 1 year lease. It’s a business and their life issues are not your problem. Also, it’s not a reasonable expectation that ‘you’ll be reasonable about letting them out of the lease if they close on something mid-lease’. Again, it’s a business decision. If you were willing to accept some uncertainty than charge 20% more but there is no reason for you to foot the bill for their uncertainty. Personally, I would take less money for the 1 year commitment. And due to their reluctance, even if they agree to a 1 year lease, I would require the last months rent as well as a month security at lease signing.
excellent post, brokelin