With many residential property leases coming up for renewals, we find ourselves in unusual economic circumstances this year due to the Covid pandemic.
It has been challenging for landlords and tenants alike. While some tenants may find it tricky to renew their leases, those who acted with integrity are likely to find landlords willing to renew their lease and possibly even on better terms.
Many tenants may find that the landlord will look to conduct renewal credit checks to confirm the tenant’s affordability and do a renewal inspection and tenants should be prepared for this.
Lease agreements often make provision for a renewal which must be exercised within a particular timeframe. If the tenant fails to exercise the option timeously but is a good tenant, the landlord will often have no issues with renewing, but this is not a given right.
To be safe, if the tenant has not heard from the landlord regarding the renewal, he should indicate what he intends to do at least one month prior to the expiration of the lease. If no renewal option or agreement is reached, the lease will simply terminate, and the tenant will need to vacate by 12pm.
Affordability is vital when renegotiating your lease this year
It is important to ensure the new rental is affordable and the increased percentage reasonable given the current economic climate.
If there is a renewal clause in the original lease, then the lease must generally be on the same terms except for the monthly rental which could possibly change, but must be agreed upon by the landlord prior to the option of renewal being given to the tenant. Failing this, the landlord can change the terms and if these are not acceptable, the tenant has every right to give his/her notice to vacate at the end of the original lease period.
Even if there is a stipulated escalation percentage, it is still possible to negotiate the rental amount. If the landlord is not amenable, the tenant would need to decide whether to accept the new rental or move. Our advice to a landlord would be that if it is a good tenant, they should look at how they can be accommodating in the current pandemic-climate.