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Brent Williams' Apartment Blog

Thoughts, comments, and ideas about the overall multifamily industry, as well as a property-specific focus on resident retention and apartment marketing.

Is This Insane? Zero Advanced Warning For Renewals!

We just finished preparing our 2014 Lease Renewal Survey, and one thing shocked us right from the start:  18% of respondents gave exactly zero days warning for their renewal letter! 

Let me explain:  If you have a 30 day notice to vacate, you would anticipate that a community would send out their renewal letter at least a few weeks or a month before that, which would give the residents time to digest the renewal letter and make a decision before they have to give their notice to vacate.  But 18% of communities told us that they give zero days or less notice, which means that if they had a 30 day notice to vacate, they were giving out their renewal 30 days prior to the end of the lease, which is the same day the notice to vacate is due, giving the resident zero days to make a decision.  Two communities surprisingly had a 60 day notice to vacate, and yet only sent out their renewal letter 30 days prior to the end of the lease, meaning the resident got their new rental rate 30 days after the notice to vacate was due.

I've been in this situation as a resident, actually, and it infuriated me.  I felt steamrolled into making a quick decision, and even though I think I did renew (it has been many years, so I don't recall exactly), I had a newfound distrust and dislike for the community.

So the question is whether this is simply the community not properly timing out the renewal process, or if it is a specific strategy to reduce the options of the resident.  If you give someone zero days to make a decision, and the two options are something familiar and something unknown, I suppose there is a good chance they will simply stick with the familiar, even if it creates animosity in the process.

What are your thoughts on the process?  Do you all think that this strategy 1) works and 2) is a reasonable business practice?

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This comment was minimized by the moderator on the site

I would feel so uncomfortable giving someone no notice about their renewal options. We require 2 month's notice, and we send renewal letters out about 2 weeks prior to their notice coming due. This gives them time to think it over, and negotiate their terms with us (if desired). But, it doesn't give them too much time, so they don't have a lot of time to shop around before they decide if they want to stay.

  Julia F
This comment was minimized by the moderator on the site

I think you are spot on, Julia. Two weeks probably gives the impression that there is some time to think about while not feeling steamrolled, but still not enough time to really check out what else is out there.

  Brent Williams
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I think it is insane and a horrible business practice. I once worked for a leasing manager I really liked, but her philosophy was send renewals out the day before the 30 day notice period would start to essentially force someone to stay with us. As a manager I felt confident enough in our product, our people and our pricing...and were always open to discussing the specifics of a renewal with a resident, so they could feel valued. If you have to force someone to stay with you, that just creates bad energy all around. Why not win their heart over and over again so they want to stay with you if they can?

  Rommel Anacan
This comment was minimized by the moderator on the site

If you have to force someone to stay at your community, there is something fundamentally wrong with your community or service...

  Brent Williams
This comment was minimized by the moderator on the site

Agreed! And no one likes it. The onsite team hates dealing with upset residents. The managers hate dealing with upset residents and their employees who are upset. Then when those escalate to the home office that includes more people into the drama. Why not do the right thing?

  Rommel Anacan
This comment was minimized by the moderator on the site

We require a 60 day notice to vacate and we send out our renewal notices 90 days prior to the expiration. We offer an incentive if they return the renewal notice to us within 10 days. After the 10 days they can still renew but they will not get the incentive. If someone is planning to renew they usually get it in within the 10 days.

  Candee
This comment was minimized by the moderator on the site

That is a great approach!

  Brent Williams
This comment was minimized by the moderator on the site

That would definitely be an unprofessional practice and in thelong run will hurt your business. This is the type of practice that leads to a negative stereotype of landlord practice. We need to rise above that.

  Nicholas Frey
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Bad business practice... period. Then we complain when we start getting regulated... Infuriated tenants make persistent complainers to legislators.

  Juan Carlos
This comment was minimized by the moderator on the site

I agree with you it IS insane. Especially if your goal is retention. Over the years, I have seen all too many times managers, management companies, and owners who thought it was a good idea to wait until the last minute. I always made my offer at least two months in advance of the date they were required to give notice. I believe most residents know when their lease is up and as they get closer to the end of their lease, they begin having an internal conversation with themselves. The closer they get, the more likely they will make the decision to stay or go. The longer you wait to make the offer, the less influence you have in that decision and now you put yourself in a place of trying to change their mind. And we all know how reasy that is.

  Gene Harris
This comment was minimized by the moderator on the site

I am with Julies response and we do exactly the same thing (60 day notice with renewals sent around the 15th prior to the notice period). I am not sure if it is even possible for us to send a renewal that is possible/legal for us to send a renewal notice that doesn't follow the notice period stated on the lease.

  Mike T

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