Quandary about Extending Lease

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    Quandary about Extending Lease

    Folks

    I have two very good tenants whose lease is coming to an end and who'd like to sign a new twelve-month lease. This may sound ideal, but there's a possibility that I'll need to move back into my flat before the new lease has expired.

    One option would be to offer them a month-by-month rolling contract until I know for sure whether I'll need to move back. My concern about this is that they may object to the uncertainty and look elsewhere.

    Another option would be to give them the twelve-month contract and then offer them a financial incentive (e.g. a month rent free) if I need them to move out. This could work out cheaper than losing them and incurring the costs of searching for new tenants, including the loss of rental income.

    What do people normally do in this sort of situation?

    Thanks

    Remster

    #2
    Whether you "offer" them a month-to-month contract or not, this is what will happen if they stay there after the fixed term ends.

    A financial incentive of a months free rent is nothing at all, when they have the option to stay in the property until the end of the new fixed term.
    Allow tenants to protect their own deposits. I want free money when they do it wrong

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      #3
      Just tell your tenants that you don't mind then staying on on periodic tenancy. I doubt they'll move out just because of that...

      Comment


        #4
        Originally posted by jjlandlord View Post
        Just tell your tenants that you don't mind then staying on on periodic tenancy. I doubt they'll move out just because of that...
        They have initiated a new 12 month term.
        If they had said nothing, I would agree with you, but in my opinion they will smell a rat if the landlord will not do so.
        Allow tenants to protect their own deposits. I want free money when they do it wrong

        Comment


          #5
          It's difficult to avoid that.
          Either OP tells his tenants that they can just remain on periodic tenancy, or he can include a break clause in the new 12 month 'fixed' term. Either way this would ring bells.

          Remster:
          Whatever you do, note that to get possession back you'll have to serve a 2 month notice on your tenants, then seek a court order if the tenant does not cooperate. So worst case it could take you more than 4 months to get possession back.

          Comment


            #6
            I think you should be upfront with them and say you would be happy for them to stay on for the next 12 months but that there is a possibility you may have to move back into the flat so you would like to include a mutual break clause so that either party can terminate the contract by giving the other party at least 2 months written notice.

            They like the flat as otherwise they wouldn't ask for an extension. If you explain why you need the break clause, they may well want to stay as they know that even if you do need to move back they will get at least 2 months notice to find somewhere else.

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