You may need to include a sentence that reads, “Your payment of rent for the next month or term indicates your acceptance to this change or changes to the rental agreement.” You should also state, “If you do not agree to these changes, please vacate the premises and consider the lease terminated by [the date stated in your notice].”
You don’t want to chase away business by telling tenants their rental agreements will be terminated if they don’t agree to a change. However, if you feel the change is important enough to make—and be retroactive—it must be significant enough to ask all tenants to agree.
Conversely, if the change isn’t that important to you, consider adding it only to future rental agreements, leaving established agreements untouched. This allows attrition to rid your facility of pre-existing rental agreements while filling it up under agreements with the new term.
Later, you can address the small group of tenants who remain with old agreements that need to be changed. Eventually, this subset becomes a small and manageable number, affording you more individual communication and explanation with customers as to why the change is being made.
Addendums and New Agreements
If you’re making a substantial change to the rental agreement (such as the tiered value limits mentioned earlier), create an addendum or new rental agreement and ask all tenants to sign it. This will prove you have their acceptance of the change.
Do not send the kind of letter discussed above to tenants if, for example, you’re going to completely rewrite your negligence liability and add six new provisions to your rental agreement. This will require a signed addendum or completely new contract. You should get as many of those signed in person or notarized to prove tenants acknowledged and accepted an important and substantial change to the agreement.
Don’t let any of this scare you from changing and updating your rental agreement. Contracts can become stale and outdated. With case law being produced all the time, we all have to react; and with statutes in various states changing, it’s important that you keep your agreement up-to-date.
Jeffrey J. Greenberger is a partner with the law firm of Katz Greenberger & Norton LLP in Cincinnati and is licensed to practice in Kentucky and Ohio. Mr. Greenberger primarily represents the owners and operators of commercial real estate, including self-storage owners and operators. To reach him, call 513.721.5151; visit www.selfstoragelegal.com.