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#1 by Debbie on June 14th, 2010
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Love this site! Thank you!
I have a question regarding ‘automatic renewal’ clause in a lease. The Property I manage, was purchased by owner I work for and many existing leases had an automatice renewal clause. If we do NOT notify does it still auto renew or does it go month to month. We have let them go with out notifing expecting they would automaticly be on Month-to-month status. Is this correct or does it have to state that in the terms of the lease? [this lease does not state that]
#2 by Tristan R. Pettit, Esq. on June 15th, 2010
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Debbie – Thank you for your kind words. I am glad that you find my blog helpful.
Automatic renewal clauses are not enforceable unless the landlord provides the tenant with the proper notice of the auto renewal. Proper notice would be giving the tenant at least 15 days but no more than 30 days notice on top of any required notice set forht in the rental agreement.
For instance, lets say you had a lease that automatically renews for another year. At least 15 days before the end of the lease but no more than 30 days you must notify the tenant in writing that the lease will auto renew. This “notice” period reminds the tenant that if they don’t do something proactive (i.e. give you notice that they are leaving or otherwise move out) that they will be on the hook for another year.
If you properly notify the tenant of the renewal and then 1 month into the new lease the tenant vacates, you can hold the tenant responsible for the remainder of the lease (subject to your duty to mitigate). If you fail to give the tenant the notice and the tenant still vacates 1 month later then you will not be able to enforce the auto renewal of the lease against the tenant.