How to renew your tenancy agreement

Renewing a tenancy agreement can be a straightforward process if approached correctly by both the landlord and the tenants. Whether you're a landlord wanting to extend your tenancy agreement or a tenant looking to secure another term in your rental property, understanding the steps involved is important for a smooth transition.

Here’s a comprehensive guide to help you navigate the renewal process effectively:

Tenancy renewal options

Different types of tenancies require different processes for tenancy renewal.

1. Fixed-term tenancies

A fixed-term tenancy has an agreed duration and end date, commonly spanning from 6 months to a year. When the contract ends on a fixed-term tenancy, the tenants and the landlord can choose to renew the agreement for another fixed term.

2. Periodic tenancies

Periodic tenancies operate on a rolling basis, meaning that the tenancy continues month-to-month or week-to-week. Periodic agreements automatically renew, unless the tenant or landlord provides notice to terminate the tenancy.

Start early with clear communication

It’s important for both landlords and tenants to start the renewal conversation early—typically two to three months before the tenancy expires. This gives both parties time to consider their options and avoids last-minute decisions.

Review the current tenancy agreement

Before discussing new terms, both parties should revisit the original tenancy agreement. This is a good opportunity to check for any changes that need to be made for the next term. Landlords should assess whether the current rent aligns with local market rates, or if any other clauses (such as those about pets or subletting) need amending. Conversely, tenants should also make sure that the terms remain suitable for their needs. If more flexibility is needed such as a shorter notice period, or repairs that weren’t covered in the previous agreement, now is the time to raise these concerns.

Discuss terms and negotiate

Once the intent to renew is clear, it’s time to discuss the terms of the new agreement. Flexibility and transparency are key for both parties, and it’s important to approach these conversations amicably. If the landlord wishes to increase rent or adjust tenancy length, negotiation might be on the table. The tenant might propose a smaller increase, or request improvements to the property in exchange.

Put the new terms in writing

Once you’ve discussed and agreed on the terms, the agreement will need to be formalised in writing. This is vital for protecting both parties and avoiding misunderstandings. The landlord or letting agent should draft a new tenancy agreement or add an addendum to the existing one, including any changes or updated clauses, and ensuring that it complies with current legal standards.

Sign the renewal agreement

After both parties are happy with the terms, the final step is to sign the agreement. Make sure this step happens before the current tenancy expires to avoid the tenancy switching to a rolling month-to-month contract by default. Tenants and the landlord should sign the agreement after reading through it carefully and both parties should have a copy of the document for future reference.