Best Practices

For Lease Non-Renewals

By Erica Rascón on Feb 7, 2018 in News

Many states do not require landlords to specify a reason for lease non-renewals. It is in your best interest, however, to have a well-documented reason for not renewing a resident’s lease. Here’s why.

Keep Fair Housing Fair

Fair Housing laws forbid non-renewals based upon discrimination or retaliation. You likely know this from your new-hire orientation, but here is a quick review of why it matters now:

Discrimination: You cannot treat residents differently based upon their race, ethnicity, family status, ability level, sexual orientation, or any other protect class group. Your resident’s rambunctious kids are not a sound reason for lease non-renewal.

Retaliation: You cannot treat residents differently because the residents assert their rights in any capacity. Residents always retain their legal rights. For example, if a resident issues a complaint about your property to a government agency and, subsequently, you opt not to renew the lease, you may face legal action.

Thorough documentation prior to a lease non-renewal provides clarity for both landlords and residents. You can minimize claims of discrimination or retaliation when there are time- and date-verified correspondences of your concerns.

Documentation Best Practices

If peer complaints are your first indicator that a resident is a problem, document the complaints electronically. For example, if a resident calls with a noise complaint about a neighbor, write an email identifying the details of the complaint and send it to yourself.

It’s beneficial to send a copy to the resident as well. (Your message does not need to contain the name of the person who issued the complaint.) Primarily, the resident may be unaware of the issue. Your message may stop the problem and prevent the costly turnover.

The email also lets the resident know that you are tracking their non-conformity to the lease or local ordinance.

When local authorities are involved in a complaint on your property, documentation becomes much easier. Request copies of police records.

Documentation Pitfalls

If you have not documented your reasons for the non-renewal, you are vulnerable to claims made against you by the resident. Claims of discrimination or retaliation are difficult to combat without proper documentation of your decision to not renew a lease.

Let’s go back to the resident with rambunctious children. You manage a relatively peaceful community occupied mostly by professional young adults. But there is an exception: the family in unit 255. Children from said unit vandalize the community pool. Neighbors call in once a week to complain about the children’s noise level in the evenings. You know their behavior is bad for your property, so you decide not to renew their parents’ lease.

Pause. It is important to note that property damages and frequent noise violations are the motive of the non-renewal–not the children themselves. But without proper documentation of either infraction, you may be vulnerable to the residents’ claim of discrimination.

When your location does not require a reason for non-renewal, document your reasons anyway. You may be able to mitigate turnover or minimize legal complaints against you.