What is an automatic lease renewal clause?
How it works
Many leases include a clause that renews the tenancy automatically at the end of the term. The renewal may last for the same length of time, such as another year, and sometimes at a new rent amount. The clause usually sets a deadline for giving notice to prevent renewal.
If you miss the deadline, you may owe rent for the new term even if you planned to move. This is a common reason tenants end up paying more than they expected.
- Renews unless notice is given by a deadline
- Often renews for the same term length
- Rent may change at renewal
- Note the deadline on your calendar
What to do
Read the renewal section as soon as you sign the lease, and mark the notice deadline. If you want to leave, send written notice before the deadline using the method the lease requires. If you want to stay, check whether the renewal rent changes and whether any terms are updated.
Some states limit automatic renewal terms or require landlords to give reminders. Local rules can change what the clause means in practice.
Common mistakes
- Missing the renewal deadline and assuming you can leave anyway.
- Ignoring a rent increase written into the renewal terms.
- Assuming a landlord reminder is required when the lease does not promise one.
Related questions
- What does a standard lease agreement include?
- Can I get out of a lease I signed but haven't moved into?
- What is a lease assignment and how does it work?
- Are verbal lease agreements legally binding?
- What happens if I signed a lease with someone who moves out?
- Can a landlord change the lease terms mid-lease?