According to Pew Research Center, 36% of U.S. households were rented in 2019. Lease renewals play an important role in the rental market, and so at least one-third of the population may come across them at some point.
But why do lease renewals matter? What's the important info you need to know about them?
Well, in this quick guide, we'll talk you through what release renewals are, how they work, and when you should renew a lease. Let's get into this!
What Are Lease Renewals?
Lease renewals are a common practice in the rental industry and is beneficial for both landlords and tenants. For landlords, renewals provide a sense of security and stability in terms of their rental income. For tenants, renewals allow them to continue living in a property that they have grown familiar with and maybe comfortable in.
Additionally, renewals can also be a good option for tenants who may not be able to find a new rental property easily. This may be especially true in a tight rental market.
Another benefit of lease renewals is that they provide an opportunity for landlords and tenants to negotiate changes to the lease. For example, a tenant may request certain repairs or renovations to be made to the property, or a landlord may want to increase the rent. By renewing the lease, both parties can come to an agreement on these changes and update the lease accordingly.
How Do Lease Renewals Work?
When a tenant wishes to renew a lease, they will typically inform the landlord in writing of their intentions. The landlord will then review the tenant's request and decide whether to approve or deny it.
If the landlord approves the renewal, they will typically prepare a new lease agreement for the tenant to sign. This new lease will include the new rental rate, the new lease term, and any other changes to the original lease. Once the new lease is signed by both parties, it becomes legally binding.
It's important to note that the new lease is a separate legal document, and both parties should review the new lease carefully before signing. Landlords or tenants can also include special conditions, or addendums, to the lease, such as renewing the lease for a shorter time or with a different rent increase percentage. Once both parties have signed the new lease, it becomes legally binding.
When to Renew a Lease
The best time to renew a lease is typically a few months before it expires. This will give both parties enough time to review the terms and conditions of the lease and make any necessary changes. It also allows for enough time for the landlord to find a new tenant if the current tenant decides not to renew.
Tenants should also consider their own plans and needs, such as if they plan on moving or needing more or less space, before deciding to renew a lease. Renewing a lease also depends on the landlord's terms and conditions if they have any restrictions.
Lease Renewals Explained
You should now have a clear idea of what lease renewals are all about. Plus, you should understand how they work and the best time to renew a lease.
For more info useful to landlords and tenants in Nashville, TN, check out our blog.
