Two days ago, I was shocked to notice a for sale sign had been placed along the road in front of my apartment building. I am lucky, having had two years of business law in college I knew what the implications would be if, and when, the building sold. So I took a proactive step to guarantee I could remain living here for the same monthly amount. I realize not everyone knows you can have a little cushion of security when renting, even if your home isn’t listed for sale.
The main key is that when a rental property is sold the new owners have to honor your lease. (Please check with where you live to make sure your laws aren’t different) Knowing this I contacted the current manager of the property and asked to extend my lease. Of course I went for 5-10 years, I knew he might not want to go that far, but it was worth negotiating from there. What I ended up with was a 3 year extension on my lease. This means that for 3 years my rent (utilities included) can’t be changed no matter who owns the building. An added bonus is that all the work we have put into the field to have seating areas and the community garden is a selling point. I was given the go ahead to continue what we started!
In the case of a change of ownership of your apartment, the new owner has the right to not renew your current lease, leaving you searching for a new home. By extending the lease even if the new owner plans to displace you, you have much more time to look for a new home.
If you are looking to rent or are currently renting here are some suggestions.
- Read your lease carefully, some will have a built-in clause which states how much your rent will increase each year.
- For your first year I would suggest signing a 1 year lease. This will give both you and the person who is renting to you time to get to know each other and make sure it’s a proper fit. Asking for a long term lease may make the landlord nervous. They don’t know yet if you are consistently late on the rent, or disruptive to neighbors, for example.
- When it’s time to renew your lease, if there are no clauses dealing with annual increases, and you know you want to stay where you are for a longer period of time, consider renegotiating the terms of the lease.
- Be honest! Let them know why you enjoy living where you do and would rather not go through this each year, in my case I was honest about wanting to protect my monthly cost upon the possible sale.
Many landlords and property managers are happy to know an apartment is being rented by someone who will take care of the property, enjoys living there (less complaints), doesn’t cause problems, and pays their rent on time and will gladly extend your lease over having to go through the process of listing and finding a new tenant.
How will this help to save money
At the end of my first year here I was asked if I would be willing to sign another lease, but that the rent was going up. It was only $10 a month and yes I wanted to stay here. If my rent went up by $10 a year over the next 3 years I would be paying an additional $720 by the end of that period. You may shake your head and say so what that’s only an average of $240 a year. Of course that is only the average. Here is what it would look like year by year:
- Year 1: additional $120
- Year 2: additional $240 (the cost is now $20 more than you are curently paying)
- Year 3: additional $360 (the cost is now an accumulated $30 a month increase over your current rent)
Sure but what if that annual $10 increase one year jumped to $50 unexpectedly? Either way I would rather have the money in my pocket to do with it what I want, such as give it to a charity or add it to savings.
No need to worry
For so many who learn their home is being sold out from under them it becomes a time of stress. You have put your whole heart into making these four walls feel like an expression of yourself. Maybe like me you have invested some of your own money, indoors or out. All is not lost. If you can extend the length of your lease you will have continue to be able to enjoy your home.
What happens if you and the new owner don’t see eye to eye? With some help and done properly you can end your lease without consequences, but that’s another story and does differ from location to location.
How do you feel about signing multi-year leases?