Preparing for Vacancies
Preparing For Vacancies
Some landlords do not adequately prepare for vacancies. When landlords don’t prepare, they can only react, and reacting to rather than preparing for vacancies usually makes the vacancies more costly.
Changing conditions in the economy, changing conditions in tenants’ needs and wants, and effects of life events will have significant impact on the landlord’s ability to fill vacancies. Timing of vacancies is not always controllable by the landlord, but planning how to handle vacancies is under the landlord’s control. By having a plan, the landlord may ease some of the stress and minimize downtime and expense in filling vacancies.
Adequately preparing for vacancies includes keeping track of when vacancies might occur. Although landlords cannot always totally control the timing of vacancies, there are some things that can be done to minimize surprises. This includes the very basic item of not scheduling your vacation near the date of a potential vacancy and being sure that your favorite handyman or other vendors used in preparing vacancies for re-leasing will be available at the time of a likely vacancy.
Landlords have potential control over scheduling vacancies by properly choosing the termination date of lease agreements. Even month-to-month agreements give some control if the landlord writes all agreements so as to terminate at the end of a month rather than related to a mid-month date of lease origination.
Tenant’s Notice of Intent to Vacate
Neither landlord nor tenant want any surprises or delays during the final days of the lease term when stress levels are usually already at a higher level. The
landlord will want to start as soon as possible to begin clean-up and repair and the tenant is under pressure to coordinate his move and perform according
to his ending lease and a new lease or home purchase elsewhere.
Lease agreements should include a clause that requires the tenant to give written notice by a specified number of days prior to the end of the lease term of
intent to vacate. Written notice to vacate is a requirement by law in some states. A notice requirement reduces the chances of misunderstanding or
misremembering the important details by either party.
A written notice is of benefit to the landlord should the tenant not move-out as planned. The tenant, through no fault of his own, may be held up because his new residence is not ready as scheduled and want/need to stay over a few days. The landlord having anticipated the move-out date may have signed a lease with a new tenant and promised a set move-in date for the new tenant that he cannot now deliver. The new tenant may choose to sue the landlord for default of possession date and the landlord can then in turn file suit against the holdover tenant for failing to move-out as noticed. The written notice will be of value in proving the landlord’s case in court.
The written notice signed by the departing tenant will also help convince the tenant to make other temporary arrangements regarding housing if necessary so as not to delay the replacement tenant’s move-in. When there is not a waiting replacement tenant, the departing tenant will probably be less likely to argue about whatever rent the landlord demands for a holdover period.
On a related issue, landlords should require advance commitment from tenants who they wish to retain. Landlords should deliver or mail renewal/extension agreements to tenants well in advance (say, 60 days) of lease expiration dates and require response by at least 30 days prior to expirations.
Landlord’s Notice to Tenant of Non-Renewal of Lease
In most states a landlord has the option to not renew or extend a lease beyond the termination date. In most jurisdictions, the landlord does not need to provide the tenant any reason for not renewing or extending the lease term. When a reason is not required by law, it is almost always better to not provide a reason, as an improperly stated or misunderstood reason could give rise to a claim of a fair housing violation.
Some landlords may think it unnecessary to provide additional notice to the tenant that the lease term is expiring on a certain date and such notice is not usually required by law. However, doing so well in advance is of value to the landlord because it serves as a record that the tenant was notified that the landlord did not wish to renew the lease.
If the tenant stays on after the expiration of the lease, the tenant becomes a holdover tenant. Despite the expiration of the lease, in order to remove the holdover tenant from the property, the landlord in many states must serve the holdover tenant with a notice to vacate the property, stating the date upon which the tenancy ended. If the tenant does not vacate by the end of the notice period, the landlord can file an eviction lawsuit. Some states do not require a notice to a holdover tenant and allow the landlord to immediately file an eviction lawsuit upon expiration of the lease.
Most month-to-month tenancies can be terminated with 30 days written notice to the tenant. However, as a particular state may require a longer notice period for certain tenants – e.g., those who have been occupants for at least a specified period. Landlords should consult their state’s landlord-tenant law for current requirements.
A market survey is the first line of defense against the costs of filling vacancies. Supply and demand for rental units and in particular, type of property,
condition, and location, will have a significant impact upon a landlord’s ability to attract and retain good tenants and to command market rents. Accordingly, minimizing the length of a vacancy is dependent on asking the appropriate rent when marketing the vacancy.
As conditions change, the landlord can adjust his rents and, when necessary, his qualification criteria, in order to stay competitive in his market area.