An expiring lease gives you the opportunity to change things that have bothered you about your tenancy experience so far. It also gives you the chance to revisit your rental rate. Without a lease extension, your rental contract reverts to a month-to-month agreement as soon as the lease expires. Many people worry that their landlords will make them move out when this happens. If you have been a good tenant, that usually won’t happen. Nevertheless, going month-to-month usually won’t serve your interests.
Extending your lease gives you more security as a tenant. With a month-to-month rental your landlord can compel you to leave by the end of the next month if he wants, but with a lease agreement you have the right to occupy your residence at least until the lease expires, so long as you pay rent and comply with the other lease terms. If you value having the certainty of a lease, you should try to extend it if your landlord offers feasible terms.
Your landlord cannot raise your rent without your consent so long as you have a lease. With a month-to-month rental, she can raise it every month if she wants. This becomes important in a “landlord’s market” of low vacancies and high rents. By having a lease, you can buffer yourself from rental increases for months or even years at a time. Do some online research for news articles about rental rate trends in your area. If rents look likely to rise, negotiating a lease extension can save you a lot of money. When it comes to the negotiation with your landlord, point to your positive record as a tenant and ask for a continuation of the same rent. Be practical, though. If rents have risen sharply since you signed your lease, you may have to accept an increase.
A “renter’s market” of high vacancy rates and declining local rents gives you a lot of leverage to ask for, and win, a lower rent. Research the average percentage of decline in local rental rates and ask for a correspondingly lower rent from your landlord, especially if you know your building has vacancies. Multiple vacancies cost landlords a lot of money, more than they would lose by accepting a lower rent from you.
When Not to Extend
Here are two big reasons not to extend your lease. First, if you plan to move in the near future or want to keep the option open, a month-to-month lease gives you that leeway. Second, the rental market waxes and wanes. If your lease expires at the end of a peak when rents are high but are poised to drop in the next year, you can save yourself money by reverting to a month-to-month lease and waiting a few months for local rents to come down before you try to negotiate a new lease with a lower rent.
Approaching Your Landlord
If you want to renew your lease, decide in advance on any changes you want to make. For instance, if you have complaints about your landlord’s responsiveness to your maintenance requests, you could request language in the extension that promises a more timely response to your requests and empowers you to handle repairs yourself and then deduct the costs from your rent if the landlord doesn’t respond promptly. Once you know what changes you want, approach your landlord or property manager one to two months before the current lease expires. Firmly but politely request the changes you want, including the duration of any extension and any revisions to your rent. If you’re lucky, the landlord will grant your requests without protest. Otherwise, you will have to negotiate. Make a distinction between must-haves and the things you can compromise on. Don’t hold out for everything you want if your landlord makes an honest effort to compromise with you. By the same token, be ready to walk out of a lease agreement if your landlord wants terms you can’t accept.
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