Automatic lease renewal can be costly
Landlords cite convenience, but tenants can overlook fine print
Stephanie Krehbiel is moving into her first home, but her recent rental experience still haunts her.
“The mistakes we made, anybody could make,” the Lawrence resident said.
Krehbiel, 30, is trying to sort out a $1,600 mess related to a controversial clause included in many rental contracts. The clause automatically renews leases if tenants don’t notify landlords of their wishes to move out once the initial lease period lapses.
Unaware of the clause written into her lease, Krehbiel missed the June 2 deadline to notify her landlord. When she called June 6, her pleas to get out of the automatic renewal fell on unsympathetic ears, she said.
“They have really unscrupulous behavior,” Krehbiel said. “They’re just trying to get what money they can out of people.”
Automatic renewals are either a blessing or a curse, depending on what side of the fence people are on. Some say they’re simply an easy way to get things done.
“It’s a convenience for the landlord and the tenant both,” said Bob Ebey, vice president of Landlords of Lawrence Inc. and legislative liaison for Associated Landlords of Kansas. “If there are no changes, it just saves a lot of paperwork for the landlord and the students.”
But others say they’re a way to hook unwitting tenants.
“It may be legal here, but I just find it terribly exploitative,” Krehbiel said.
A bit slippery?
Kansas University’s student government pressed for changes to the Landlord and Tenant Act during the last legislative session. Their proposal included an attempt to address automatic renewals.
The law currently makes no direct mention of automatic renewals. The students wanted to amend the law to state that leases could not be automatically renewed more than 90 days before the end of the existing lease.
They also wanted landlords to give tenants 30 to 60 days notice of the automatic renewal prior to its taking effect. The bill passed the Senate but died in a House committee.
Sen. John Vratil, R-Leawood, said he thought the proposal was a good compromise between landlords and tenants. As for automatic renewals, Vratil said they’re a trap for many people.
“From the landlords’ perspective, it’s a big advantage,” he said. “I think it’s a little bit slippery.”
More about leases
Rep. Donald Dahl, R-Hillsboro and chairman of the House Commerce and Labor Committee, which killed the bill, said he thought it was an ill-conceived idea that didn’t appear to have much backing beyond the students who pressed for it.
He said at some point, college students must grow up.
“How long are you going to coddle these individuals?” he said. “That’s a good lesson in life. Read what you’re signing.”
A new proposal from students may arise next session, said Josh Bender, KU student government’s former legislative director who pressed for the changes.
Ian Staples, the current student legislative director, said the automatic renewals practice needs some standardization.
“Without restriction, this could be an opportunity for abuse in a contract,” Staples said. “All people need that standard in their contracts, and it needs to be part of state law.”
Unenforceable in Urbana
At least one college town has addressed automatic renewals. Urbana, Ill., home to the University of Illinois at Urbana-Champaign, nixed the practice.
Landlords may put the clause on leases, but they are unenforceable in the city.
“It is an unreasonable burden on the consumer that has too serious a consequence,” said Esther Patt, director of The Tenant Union at Urbana-Champaign. “The purpose of the automatic renewal clause is for the landlord to have unfair advantage over the tenant.”
But Tim Stultz, who has 250 rental units in Lawrence, said the clause allows renters to secure their spots for another year at the same rate.
“They know they have a place to live,” he said. “It takes away the stress of having to look for another place.”
He said if you flipped the scenario and dropped renters who didn’t say they wanted to stay by a certain deadline, landlords would be made to look bad, like they’re throwing people out on the street.
Three days to renew!
Krehbiel and her husband bought a townhouse in April. At the time, they considered breaking their lease, but discovered it would be too costly. So they stayed.
Krehbiel’s landlords put multiple signs on her door about renewing her lease. But Krehbiel said she disregarded the notes because they all seemed to be notices about renewing – something she certainly didn’t want to do.
Krehbiel kept one of the notes. At the top, it reads: “We don’t want to lose you! There are only 3 business days left to renew your lease for next year and we want you to stay!!”
Marked by an asterisk and in smaller print at the bottom of the flier, it reads: “Per your lease agreement, if you are vacating, you must give notice in writing by June 1st.”
To break the lease now for an apartment she doesn’t live in will cost about $1,600.
“I should have read the small print,” she said.