When the end of a lease term approaches, both landlords and tenants face a choice: renew, modify, or move on. For many tenants, a renewal means stability. For landlords, it means consistent income and reduced turnover costs. But before anyone signs on the dotted line again, there are a few rules and best practices to follow.
Some leases include a renewal clause, giving tenants the right to extend for another term, often at a predetermined rent or under the same terms. If the lease doesn’t specify renewal terms, the landlord and tenant can negotiate a new agreement.
A friendly check-in 60 to 90 days before the lease ends sets the tone for a smooth process.
Property managers can send a renewal offer outlining:
If the tenant accepts, a new lease or renewal addendum should be signed and dated. Be sure to include clear start and end dates and note any changes from the original lease.
Tenants appreciate transparency. Explaining how rent adjustments are calculated — for example, citing local market data — can help maintain trust and reduce pushback.
In California, landlords can’t raise rent arbitrarily. Under the Tenant Protection Act of 2019 (AB 1482), annual rent increases are capped for most properties at 5% plus the local Consumer Price Index (CPI), up to a maximum of 10% total per year. This limit applies to properties over 15 years old, with a few exemptions (such as single-family homes not owned by corporations or REITs).
When preparing a renewal, landlords should research comparable rents in the area and verify that any proposed increase complies with AB 1482 and any local rent control ordinances. Some cities, like Los Angeles and San Francisco, impose stricter caps or additional tenant protections.
Watch Out! Violating rent control or increase limits can trigger penalties and tenant claims. Always double-check local rules before sending a renewal offer.
California law also requires written notice for any rent increase.