Best Practices for Term Lease Renewal

First, determine if you want to maintain fixed-term leases in your rental property. It’s not as easy as it used to be! What are the benefits of fixed-term leases versus month-to-month agreements in Washington State?

Now, if you have decided to maintain fixed terms, here are some best practices followed by many of our members…

Set Expectations
When signing a lease with a new tenant, explain that the lease is a fixed term ending on the day listed in the agreement. A few months prior to that date, you will reach out to discuss any offer for renewal. Avoid making any upfront predictions on if you will be likely to offer renewal.
 
Check Your Local Laws for Rent Increase Notice Requirements
State law for rent increase notice is 60 days, but several cities have longer notice periods, often based on the percentage of rent increase. Some cities also require disclosures and special notice service requirements. If your property is in one of these cities, plan to use the RHAWA Rent Increase Notice Form following local instructions detailed in the notice packet.

Mark Your Calendar
Whenever a new tenant moves in, mark your calendar with their renewal schedule to include when you will reach out to discuss renewal, when you may be required to give notice of rent increase per any local laws, and when you might need to serve an End of Term Notice.

Determine If You Want to Renew
Between 6 and 4 months prior to the end of the term, schedule a routine inspection and see how the property has been cared for so far. This step is especially important in the initial term, but it is a good idea to do this every year. Take the opportunity to meet with the tenant and ensure all is well. Is there any unreported maintenance needed? Are there any unreported new occupants (humans or pets)? 

Offer Renewal 
Between 4 and 3 months prior to the end of the term, discuss your offer of renewal including any rent increase or other changes. Use the one-page Lease Extension form found on the second page of the End of Term Notice with Lease Extension form to extend your formal offer in writing. Both email (or another digital system) and first-class mail is the best practice. Ask the tenant to return the signed lease extension form by 90 days prior to end of term.

Serve Rent Increase Notice as Needed
Follow any applicable local laws for serving Rent Increase Notice.  

Serve End of Term Notice as Needed
If you have decided not to offer renewal, serve the End of Term Notice (Non-Renewal) well before 60 days prior to end of term. Follow up with reminders to encourage the tenant to vacate by the end of the term. 

If you offered a tenant an extension, but they do not return the signed lease extension by 90 days prior to end of term, serve the End of Term Notice with Lease Extension well before 60 days prior to end of term.  Explain to your tenant that they need to return the signed lease extension with 30 days, or they will need to vacate by the end of the term. 

Serve End of Tenancy Notice as Needed
If the tenant does not return the signed lease extension by the deadline you provided (more than 30 days prior to end of term), serve the End of Tenancy Notice. If the tenant stays past the end of term date without signing the lease extension and continues to pay rent, they will become a month-to-month tenant under the law and will be protected by the “just cause eviction” laws.

Most important best practice? Work hard to maintain a positive working relationship with your tenants. 

Formal legal advice and review is recommended prior to selection and use of this information. RHAWA does not represent your selection or execution of this information as appropriate for your specific circumstance. The material contained and represented herein, although obtained from reliable sources, is not considered legal advice or to be used as a substitution for legal counsel.