Updated October 1, 2020: 

A not renewing contract letter is a letter sent when a landlord decides not to renew a lease with a tenant. This is legal after a lease expires. Laws vary by state as to notice requirements and what must be included in the document.

When to Use a Not Renewing Contract Letter

You use a not renewing contract letter when you need to notify someone, such as an employee, policyholder, or tenant, that you are discontinuing your contract. When written professionally and tactfully, this is a way to make a separation go more smoothly, saving time and effort.

It's important to strike a balance between being firm in your decision not to renew and considering the other party's feelings. Most letters should include:

  • A clearly stated purpose without ambiguity to cause confusion later.
  • An opening that tells the recipient why they are receiving the letter, i.e. because of an existing relationship with the sender.
  • A statement that the contract between the recipient's business or organization and the sender is not being renewed.
  • A description of any options available to the recipient. Include timeframes, any alternative possibilities, and, in the case of employment contracts, instructions as to benefits such as vacation time. Also, explain the recipients' responsibilities through the end of the contract if the termination is not effective immediately.
  • An explanation of the appeals process if one is available. Include the contact information for the person in charge of that process or a link to an online source where the recipient can find more information.
  • A signature that includes your name and title along with contact information so the recipient can ask any follow-up questions.
  • A copy of the policy change, if the decision not to renew is for that reason.

If the situation involves a sensitive topic, such as an employment contract, you should not send the letter until after you've talked with the person by phone or in person to explain your decision not to renew.

Be Honest and Courteous

It's best to tell the full truth about why you decided not to renew a contract. The recipient deserves that courtesy. Often, the reason has nothing to do with the recipient. Instead, it may be the result of a policy change, budget revision, or elimination of a position or function.

If you do terminate a contract due to a performance issue, be specific about what the issues were and give examples. Avoid language that is catty or too accusatory. Choose words that are calm and professional. Be ready to support any statements related to misbehavior or poor performance.

Even when delivering bad news, you should remain professional and courteous. The recipient may be surprised and upset to receive the notice of non-renewal, especially if it represents a major change in his or her life. Always thank the recipient for his or her service and wish them the best for the future. Don't say anything that would make the recipient think you are not confident in your decision. That can lead the recipient to think he or she should fight against the decision, possibly even in court.

Example of a Non-Renewal of Lease Letter

These paragraphs are examples from some non-renewal of lease letters.

Please accept this letter as notice that the lease currently in effect will expire at midnight on (the appropriate date) and will not be renewed. Options for month-to-month tenancy are not available. (If you live in a state that requires such a disclosure, include a statement similar to this.) The lease agreement will not be renewed because: (list the reasons briefly, such as a business decision). This is not the place to accuse the tenant of doing anything wrong.

By law, you must surrender the premises and return all keys to the landlord or another agent at the lease expiration. The premises must be in the same state as when you moved in excepting normal wear and tear.

The records indicate that you paid a security deposit of (dollar amount). If you are due a refund after any repairs, cleaning and outstanding rent are deducted, it will be mailed to your new address within (the number of days required by your state, usually 30 days at the most) after the premises are surrendered. If we do not have a new address on file, the refund will be sent to your last known residence.

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