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Negotiating a Lease Renewal

If you’ve managed to find a good tenant or landlord, then it is advantageous for both the landlord and tenant to renew their tenancy. The landlord has the benefit of knowing that their tenant is stable and able to treat the property respectfully, and the tenant gets to stay in their rental with no need for a stressful relocation. It also helps cut down the costs of time and money that would be spent finding a new tenant or rental.

Since both parties will likely want to renew the lease, it pays to know what a lease renewal negotiation might look like. At the end of this article, you should have the knowledge necessary to create a win-win scenario in your lease renewal negotiation.

Deciding if this is the right space for the tenant.

The first question both the tenant and landlord will need to decide upon is whether this property makes sense for the tenant. Have there been major issues in the past? Does the tenant disrupt their neighbours? Is there property damage that went unreported?

Landlords will want to know with certainty that their property is being looked after. Tenants will want to feel confident that their landlord is willing and able to maintain the property and its facilities.

If any of these questions raise eyebrows, then it may be better to move on rather than engage in a lease negotiation.

Depending on the vacancy rate in the rental market, landlords may prefer to find a new tenant rather than deal with potential issues from an existing one. Those landlords will benefit from our tenant screening solutions to aid them in their search.

Once you know that this rental is the one for you, then it’s time to start the discussion.

Understand how much rent can legally be raised.

This is key. Many areas of both the United States and Canada have rent control laws. Failing to abide by these regulations when raising rent can mean major costs for a landlord. Rent control may dictate the percentage that rent can be increased annually, so it is essential for a landlord to consult their local tenancy board to determine what is legal. Often, landlords will need to provide two months' notice to the tenant for rent increases as well.

If rent control applies to you, then raising the rent to meet that measure is often best in order to keep pace with inflation and property costs. If rent control does not apply to your unit, then the negotiations are much more open-ended.

Find out market value.

Both the tenant and landlord should take time to determine what the market rate is for their rental unit. This can be as simple as spending 30 minutes on a rental classifieds website to get a sense of what some rentals nearby are priced at. It helps both the landlord and tenant to have examples that prove their point—if you are serious about having your tenant stick around, then raising rent should be done to modestly meet the market rate.

This isn’t much of a science, however. There are likely to be amenities or benefits to your property that are not present in your comparisons. Take these into account, they are a solid means of leverage.

Landlord and tenant discuss lease renewal

Being realistic about raising rent during a lease renewal.

As you begin planning for a lease renewal, consider what is reasonable for the property and the people involved. If you are serious about keeping a tenant, then it might not make sense to raise the rent at all. Consider how a loss of one month’s rent may be the difference between actually benefiting from a rent increase versus losing money.

Planning to increase rent significantly? It may be possible to work alongside your tenant to make the property better overall. Are there renovations that could majorly benefit quality of life in the unit? Are the services adequate for their daily life? The tenant and landlord can work hand in hand to justify rent increases and come out happier as a whole.


Finding a great tenant can be challenging. Tenants can also have major difficulties finding housing that meets their needs. There are many unknowns and if you have already had success in your tenancy, then it is likely worthwhile to see it continue.

Negotiating a lease renewal should be a positive experience. If you are confident in your tenancy, then deciding on a reasonable rent rate should be the least stressful part of the process. As always, consult your local tenancy board to ensure that you are raising rent the right way.

Still searching for your perfect tenant? Naborly is here to lend a helping hand.

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