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Do I Have to Renew a Lease with a “Bad” Tenant?

Every landlord dreams of renting to the right tenant. One who cares for the property, notifies you of maintenance issues, and pays rent without causing problems. However, in some cases, it doesn’t always happen this way.

In rare occasions even with a thorough and rigorous tenant screening process, you’ll run into a bad tenant.

Generally speaking, there are four types of bad tenants.

• Bad Tenant #1: The Destroyer. This is the tenant who damages and destroys property. This type of renter can cost you hundreds, if not thousands, of dollars in repair costs.
• Bad Tenant #2: The Rule Breaker. There are always rules that tenants must follow when renting a property. These individuals don’t care too much about them.
• Bad Tenant #3: The Tardy Player. The Tardy Player does not pay his rent on time and does not answer your calls. But at the end of the day, he delivers what is vital – the rent.
• Bad Tenant #4: The Non-Payer. This renter ceases to abide by lease terms and fails to pay rent on time after numerous knocks on the door and missed phone calls.

For landlords that have these types of tenants, they often ask – “do I have to renew a lease with a “bad” tenant?”

By the end of this post, you should know the answer to that question.

Benefits of Renewing a Lease Agreement

If you’re a landlord that has been in the business for a while, you truly understand how costly and time-consuming finding a new tenant can be.

You can save a lot of time and aggravation by renewing a lease with your current renter.

While this course of action being suitable if you have a good tenant who abides by the lease agreement, it is not the case for a bad tenant.

As a landlord, you have every right not to renew a lease with a tenant. Some exceptions do exist, however.

How do you part ways with a bad tenant when their leases are up?

You don’t need a reason

If the lease is fixed-term, then you don’t need to give a reason for not renewing the lease. This is because the lease is clear on when the term ends.

The only exception is if you have rented to Section 8 tenants. There are rules you must follow to terminate a lease if you are dealing with the local public housing authority (PHA).

First and foremost, you need to contact your local PHA. The goal here is to determine whether or not you need to give them a reason for lease termination.

Secondly, to be sure you are following the rules, find out what constitutes as a valid or invalid reason.

Lastly, keep all correspondence with your tenant in writing. This helps document your decision not to renew a lease with your tenant.

Give Adequate Notice

Whether the lease is fixed-term or not, make a point of notifying your tenant ahead of time. This helps by giving your tenant enough time to find a new place to live and make moving arrangements.

Most landlords include a clause in their lease regarding the amount of time the notice has to be if the lease-renewal is not up for negotiation. If you don’t have a clause in the lease, then a 30-days notice is generally considered acceptable.

For example, if the lease ends on September 30^th, notify the tenant by August 30^th. For specifics, be sure to check your state laws as these rules vary by region.

For a month-to-month tenancy, you need to give your tenant a notice of one rental period or month. This, however, generally varies by state.

Discrimination or Retaliation is Illegal 

Note that although you don’t need to give your tenant a reason for failing to renew their lease, it is against the law to deny lease renewal as a discriminator or retaliatory act after a tenant has taken action against you.

What is tenant discrimination?

As described in the Fair Housing Act, it’s illegal for a landlord or a property owner to discriminate against a tenant based on seven protected classes.

The classes are: sex, national origin, race, color, familial status, disability, and religion.

What is retaliation?

As a landlord, you cannot choose to not renew a lease for reasons that are retaliatory such as a tenant asserting or attempting to assert their rights as tenants.

The following are examples of actions that are within a tenant’s legal right that could lead a landlord to file a retaliatory eviction:

• Tenant joining a member of a tenant’s union.
• A tenant organizing other tenants in the building to protest an issue, such as a rent raise.
• A tenant withholding rent until a landlord fixes a major repair problem.
• Tenant calling the local departments to complain about a health or safety hazard at the property.
• The tenant complaining often about a maintenance issue at the building.

If you decide not to renew a lease for any of these reasons, the tenant can take legal action against you.

“Bad tenants” can mean destructive, noisy, or constant late rent payments. Luckily, you don’t have to renew a lease with such tenants. The key is following the right process when doing so.