Not Renewing Lease

In Philadelphia does a landlord have to give a valid reason to a tenant why they are not going to renew the tenant’s lease, when the lease end?

Or can the landlord simply end the lease when it’s done?

A lease is contract, and that contract is good for a duration (a term); but Philadelphia Property Management Company owner, Joe White explains the restrictions the City of Philadelphia puts on landlord property owners.

Read Full Transcript Here:

Our next question comes from Brian McMillan.

“I’ve decided to not renew a tenant’s lease when the year is up. Do I need to give a specific reason if it’s just expiring? The tenant is just a pain in the butt and I’d like to move on.”

Since I’m not an attorney, I can’t give you explicit legal advice, but let me try to offer some perspective. A lot of this will be dependent on the laws in your specific region. I’m based in Philadelphia, so at least according to Philadelphia law, you do need to provide a solid reason when you do not renew a tenant’s lease.

A lease is a contract with a specific duration. When you both sign this contract, the tenant is given the rights to the property for a year, in most cases. When the year is up and you as the landlord wants your property back, you can’t simply say, “Hey, the year’s up! I no longer want you as a tenant, so we’re going to terminate your lease.” This kind of dismissal is actually not legal, which may be a little bit of a surprise. You don’t have unlimited rights to your own property in this situation, so you do have to give them a reason, and it has to be a valid reason. Examples of valid reasons might be that you want to renovate or sell the property-things along those lines.

So let’s say you give the tenant one of these valid reasons not to renew the lease and say something like “Hey, we want to get in there and renovate” or “We want to get into the property and sell it, and we want to sell it without a tenant in place” and then your tenant successfully moves out. At that point, you actually don’t have to sell it or renovate it or just because you stated your intention was to do so. If there comes a situation where you need to explain your change of heart, you could explain that you hadn’t been inside the property recently, as to not intrude on the last tenant, but now that you’re seeing it again you’ve changed your mind. Maybe that unit looks better than you remembered, or maybe now that you’re back in the space you suddenly remember all the reasons why you originally fell in love the property and just can’t bring yourself to sell it. Things change!

In short, my understanding of the law (at least here in Philadelphia) is that you absolutely do have to give the tenant a valid reason to not renew their lease. And unfortunately, them just being a pain in the butt would not hold up! But my hope is that this gives you some ideas for how to navigate that situation. Good luck!


Joe White

Joe White is a Philadelphia Property Manager and Real Estate Broker. He is the owner of Grow Property Management and has been involved in the management, sales and purchases of Philadelphia area rental investment properties since 2008. He is an author and works as a real estate investment consultant and construction manager.

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