Lease is up, tenant doesn't know when moving

amother

Sun, Apr 25 2021, 7:31 pm

My tenant's lease is up but they don't want to renew because they hope to buy a house. However, they don't know when they would be moving- they haven't bought anything yet and these things take time between finding closing and the finishing details.
What should we do about the lease?Do we do a three month lease at a time but raise the rent closer to market rate, which is a few hundred more than they are paying now? Month to month but more expensive?

amother

Mustard

Sun, Apr 25 2021, 7:41 pm

I would raise the rent on a short term lease e.g. that the longer they sign a contract for then the cheaper it is, but a short term lease should be higher. E.g. if they are paying $1600/mo now, for a 3 month rent I would ask 1800 or 1900/mo.

But either way yes you definitely need to sign a contract with them either way. Say they can pay 2k/month for a month by month contract and 1800/k for a 3 month contract etc etc (obviously adapt prices to your situation)

amother

Teal

Sun, Apr 25 2021, 7:46 pm

We bought a 2 family that we wanted to convert to a one family but there were tenants in it when we bought it. It took them another year and a half to move out after the lease was up. It’s part of the “joys” of being a landlord and why people should think long and hard if they are up for it if they buy a house with a rental.

amother

Hotpink

Sun, Apr 25 2021, 7:47 pm

Yes switch to a month to month lease at the current market rate. By rights it should be higher than current rate but you wouldn’t want to do that to an established tenant. Explain that to them.

amother

Sun, Apr 25 2021, 7:47 pm

amother [ Teal ] wrote:

I'm not upset. I'm just trying to figure out the logistics.

amother

Hotpink

Sun, Apr 25 2021, 7:47 pm

amother [ Teal ] wrote:

That’s true but it has nothing to do with op’s situation Smile

amother

Azure

Sun, Apr 25 2021, 8:05 pm

We've been the tenants in this situation multiple times.
1st time landlord raised us the amount he was planning to raise us anyway and just wrote into the lease a clause that we could leave early with at least 3 months notice.
This time our landlord just let us go month to month as long as we gave her 2 months warning- without raising the price at all.

Is there a reason you feel you need to charge more for month to month? Make sure you make clear how long notice they need to give and you should be safe.

amother

Sun, Apr 25 2021, 8:28 pm

amother [ Azure ] wrote:

Of course there's a reason- because if it's month to month, I won't necessarily know they're leaving with enough time to start looking for new tenants and do repairs and renovations. It's an added expense to me, possibly going longer without tenants.

(Not sure how helpful it is to say they need to give notice x in advance. These things change all the time, and I'd rather not have to enforce that and make them pay rent after they've moved. Month to month is easier and in a way betterfor them- because although they may be paying a little more per month, they won't end up paying rent after they're gone. )

amother

Azure

Sun, Apr 25 2021, 8:40 pm

amother [ OP ] wrote:

We found giving notice easier than month to month and didnt make us feel like we had to run right away- they're more likely to leave sooner if you raise their rent more. In my neighborhood 2 months is plenty of time to find a tenant, and we found it easy enough to give 2 months notice. (we actually told them already a month ago we're leaving end of June) Would you want to ask what they prefer?

amother

Azure

Sun, Apr 25 2021, 9:10 pm

amother [ Lemon ] wrote:

If they haven't even found a house yet, renew for 6 months.
It takes at least that long to find something.

Not necessarily in this market. We had found a house in Feb that wanted us to close by April 15. And this one we found early March and closing mid May and moving end of June.

amother

Hotpink

Sun, Apr 25 2021, 10:09 pm

doodlesmom wrote:

I always thought the lease was for the tenants protection, and that the tenant can move anytime as long as they give 1 months notice.

Not in Lakewood. Maybe in other areas. Here both tenant and landlord are locked in.

amother

Lawngreen

Mon, Apr 26 2021, 8:28 am

Here in Israel it's very common to "buy on paper" and have the construction process go much longer than promised.
We had bought a house which was supposed to be ready in August 2018.
The landlord of the apartment we had been renting refused to extend month to month or for anything less than a year.
When July came and the new house wasn't going to be ready, we had to move.
Took a rental and negotiated for 3 month lease, with option to extend for 3 months at a time, and also to be able to leave at any time if we found a replacement.
We paid a bit higher per month.
The next renters took a longer lease and were able to negotiate for a lower rent.

amother

Beige

Mon, Apr 26 2021, 9:40 am

IMHO- 3 month lease, don’t raise their rent this time, but let them know that you will if they lease another 3 months after that.
After the 3 month, it could change from month to month.
If this is in Lakewood chances are they are looking at new construction and this takes time.

amother

Gold

Mon, Apr 26 2021, 12:03 pm

Are these good tenants? How's the market? I've always rented and sometimes it was month to month. If you raise the price significantly, they'll probably move out. Do you want them to?

Chayalle

Mon, Apr 26 2021, 12:08 pm

doodlesmom wrote:

I always thought the lease was for the tenants protection, and that the tenant can move anytime as long as they give 1 months notice.

A lease is for the protection of BOTH the landlord and the tenant.

We had a tenant who actually originally wanted a three year lease, but the most I give is 2-year. Sometime into the 2nd year, they found a deal on buying a house, and called me about it. It was their job to find a new tenant to take over the lease (which was no problem. He told me he put up a sign in BMG, and got 15 calls the first evening...).

The tenant is also protected - if we decide to sell, their lease gets honored. Plus, we can only raise the rent a certain percentage when we renew - so they are getting a fabulous deal right now, compared to current prices.

amother

Wheat

Mon, Apr 26 2021, 12:23 pm

Chayalle wrote:

could bi in your case thats what ended up happening but the lease in most people eyes is to protect the landlord and the landlord only