The Downsides of a Tenant Renewing Their Lease

Negatives Landlords Should Be Aware Of

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Having quality tenants renew their lease agreements is the goal of most landlords. There are certain situations, however, when a landlord would prefer that a tenant move out instead.Tenants who are paying below market rent and tenants who complain frequently, are examples of tenants a landlord may have preferred to say goodbye to. Here are five negatives of a tenant lease renewal.

1. Problem Tenants

You may have a tenant who is not actually breaking any terms of the lease, but is driving you crazy. Every time that lease comes up for renewal, you are hoping to see a notice from the tenant stating that they will be moving.

These are the tenants who complain about everything and demand that you drop whatever you are doing to address their urgent issue. Their urgent issues are usually minor problems or nonexistent.

Self-help evictions are illegal. So as long as the tenant is paying their rent and following the terms of their lease, you will just have to deal with them until they decide to move.

2. Neglect Maintenance on Unit

Another negative that occurs when a tenant stays in the rental property is that it is difficult to assess the condition of their rental unit. When a tenant moves out, you have to turn over the apartment. You make a list of any damages and replace items as needed. You may fix damages flooring and make repairs to plumbing fixtures to prevent small issues from turning into big ones.

When a tenant stays in the rental unit, especially for a number of years, if the tenant does not complain about an issue, you will not be aware of a problem until it becomes something bigger. Small issues, such as a few missing roof shingles, which could have easily been repaired, will turn into big problems, such as an actual roof leak.

3. Limits Rent Increase

Certain states place limits on how much you can increase a current tenant’s rent by. Therefore, if you have a tenant who keeps renewing their lease year after year, they may be paying less than the current market rent for the apartment.

In this case, the fact that the tenant is staying in the rental property can actually be hurting you financially. If the tenant moved, you would be able to chart a higher monthly rent for the unit and put more money in your pocket.

In order to increase a tenant’s rent, you also have to make sure you follow your state’s landlord tenant laws to do so. You will usually have to notify a tenant in writing before you can increase their rent. You also can only send this notice at certain times, such as 30 days before their lease is set to renew.

If the tenant is a good tenant who always pays their rent on time and never complains, you may be willing to accept less rent for fear of the unknown. You do not know what to expect from a new tenant. They may stop paying their rent or may violate other terms of the lease.

4. Tenant Rejected From Other Apartment

A tenant may renew their lease due to a recent issue that you may not yet be aware. This issue would easily come up if a new landlord performed basic screening on the tenant. This could be a job loss, a decline in their credit score, or even a criminal conviction.

Since landlords do not usually re-screen current tenants upon lease renewal, you will be completely unaware that this tenant could become a problem in the near future. Even if they have always paid their rent on time, due to a job loss or medical bills that put them in debt, they may soon begin paying their rent late, and then not at all. Not only will you no longer be collecting rent, but you will then have to go though the lengthy eviction process to get them out.

Even if you are not going to go through your complete screening process every time a tenant renews a lease, it is a good idea to at least run their credit again. You can then compare this credit report to the report you received when the tenant first moved in. You will want to see if their credit score has noticeably declined or if they suddenly have a large amount of debt.

5. May Let Rules Slide

When you have a long-term tenant, you become more comfortable with them and you may begin to let the rules slide. For example, you may have charged a late fee at the beginning of their lease, but may have begun waiving that fee recently. Once you have bent the rules, it will be difficult to enforce these rules in the future.

If you do not follow the law, if you do have a problem with the tenant in the future, you will likely lose any case against the tenant in court. It can be difficult, but you must maintain a professional landlord-tenant relationship with all tenants, regardless of how long they have been renting from you.