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How to use an “End of Term Notice”

Posted by taylor on January 23rd, 2017
How to use an “End of Term Notice”

It happens all the time. You get a phone call from your tenant saying that they just got a job offer in another state, or that they are buying a house, or that they need to movie for whatever reason. All that matters is that they give you the proper amount of notice. They don’t have to tell you why they are moving or give you any reason whatsoever. And you have the exact same rights that they do! Once the lease expires, neither party has any obligation to continue or to sign a new lease.

So if you have a tenant who is not necessarily breaking the lease, not necessarily breaking the law, but is causing problems for you, your neighborhood, or your other tenants then you should give them a notice that you are not going to be renewing their lease.

Timing is key

Under Utah law rental arrangements may only be terminated by one of the parties (landlord or tenant) as laid out in the agreement. If the agreement doesn’t say anything, then either party must give at least 15 days’ notice before the contract renews itself. If that doesn’t happen the arrangement will continue under the current terms and conditions on a month to month basis.

However, just because you gave your tenants a 15 day notice doesn’t mean that they have to move out 15 days later, it means that whatever month that last day is in is the last month that the contract will be valid. So if you give a 15 day notice to a tenant on the 10th of the month then they will have to leave at the end of the month, however if you give it to them on the 17th, then they will have until the end of the next month. (By the way, the same thing applies to tenants, if their notice period goes into the next month, then they may be responsible for rent for the whole next month’s rent.)

Fair Housing Complications

You do not have to give a reason for why you are choosing to not renew a contract. However, you’d better have a good reason because if the reason you chose not to renew their lease is viewed as discriminatory towards your tenants, then you can be charged with violating the Fair Housing Act. Timing is important for this too. For example, if you find out that a tenant has an unauthorized pet in the apartment. If you serve them a Three Day Notice to Preform Covenants of the lease, and then they come to you with the necessary paperwork to have the animal accepted as a necessary Assistance Animal for their Disability you then have to accept the animal. And if you then proceed to give them a non-renewal notice it will almost be certainly seen as illegal retaliation and discrimination by the courts. However, if you had served them an End of Term Notice along with the Three Day Notice up front then you would be totally fine.

You can serve the notice any time

When you realize that you don’t want to continue your business relationship with the tenant you can tell them at any time. In fact, the day after they sign a two year lease you can give them a note that in two years from now you will not keep renting to them.

Of course there are reasons why you might not want to tell the tenants right now that you won’t keep renting to them. Often it is advisable that if you are going to be giving a 15 day notice, that you wait until they have paid the rent for that month to give them the notice that it is their last month in order to prevent possible complications. However, in general the best advice is to give the tenants a notice as soon as they cause a problem, and a large number of landlords are beginning to give non-renewal notices with all of their 3 Day violations as an added layer of legal protection, no matter how much time is left on the lease.

Don’t go overboard

Occasionally I hear from landlords that they prefer to have month to month agreements instead of long term leases (like for one year) because they have more flexibility to end the relationship if the tenant is a problem. They misunderstand the nature of rental contracts. If the tenant is not being a problem, and will move when asked, then a month to month notice would be effective. But a tenant who is a problem tenant and won’t move on their own will still have to be evicted if they refuse to leave because you gave them an End of Term Notice. In addition, if a tenant is a problem, Utah Law generally allows landlords to evict them quicker under a “cause” eviction than just giving them notice to end their tenancy.

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