Exercising The Auto-Renewal Clause in the BPOA Lease

Including an auto-renewal clause in a Berkeley lease is legal, but only if you follow very specific requirements under both California Civil Code Section 1945.5 and Berkeley Municipal Code Chapter 13.79. Many landlords do not realize that improper use of an auto-renewal clause can make the provision unenforceable and expose them to civil penalties.

The BPOA lease includes an optional auto-renewal clause that members may elect to exercise. This clause provides that the lease will automatically renew for another fixed term (typically 12 months) unless the tenant gives written notice of their intent not to renew. The BPOA lease is compliant with all state and local formatting and disclosure requirements.

In Practice, This Means:

• If the tenant gives no notice, the lease renews for another full term.

• If the tenant opts out but does not plan to move, the tenancy transitions to month-to-month.

If the tenant gives proper notice to vacate (as required by the lease), the tenancy ends at the end of the term.

Why Use Auto-Renewal? Landlords may choose to exercise this clause to:

• Lock in another fixed term without re-signing a new lease

• Reduce turnover and vacancy risk

• Discourage informal or mid-year move-outs

• Establish clear expectations: "Speak up or the lease continues under the same terms"

Legal Requirements

Under California Civil Code Section 1945.5: If the lease auto-renews for longer than one month, then:

• The auto-renewal clause must appear in at least 8-point boldface type in the body of the lease, and

• A recital of the clause must also appear in at least 8-point boldface immediately before the tenant signature line.

The BPOA lease meets both of these requirements. No additional reminder notice is required before each renewal under state law. However, failure to meet the formatting rules renders the clause voidable by the tenant.

Under Berkeley Municipal Code Chapter 13.79: Berkeley imposes additional local requirements that apply to all covered units, including partially covered units that are subject to registration.

Landlords must:

1. Provide the opt-out form at lease signing
   Required under BMC Section 13.79.010
   A written "Notice of Resident’s Intent Not to Renew" must be provided at the time the lease is signed. The tenant may use this form or provide written notice in an alternative manner.

2. Honor the 30-day opt-out deadline
   Required under BMC Section 13.79.020
   Tenants may opt out of automatic renewal any time up to 30 days before the lease expires.

3. Notify the Rent Board that the lease includes an auto-renewal clause
   Required for all units subject to registration (BMC Section 13.79.030)
   If the Rent Stabilization Ordinance fully or partially covers the unit, the landlord must disclose the auto-renewal clause when submitting the Vacancy Registration Form at the start of the tenancy. No communication with the Rent Board is required for fully exempt units.

Not Explicitly Required by Law, but Worth Consideration:

Reissue the opt-out form before each automatic renewal. While BMC Chapter 13.79 does not explicitly require the landlord to provide the form again before each new term, failing to do so undermines the tenant’s ability to exercise their right to opt out. Reissuing the form ensures the provision remains enforceable and minimizes the risk of legal challenge.

It is recommended to provide the form 45 to 60 days before lease expiration to give the tenant ample time to consider their plans.

But Should You Reissue the Form? While it may seem like good practice to reissue the opt-out form before each term, doing so can work against the property owner’s interests. When the tenant says nothing and the lease automatically renews, they become legally bound to another fixed term. If they later decide to move out early, it would constitute a lease break, and the landlord would be entitled to continue charging rent while making reasonable efforts to re-rent the unit. Proactively prompting tenants to consider their plans may increase the chance that they opt out or vacate early.

Owners should weigh the legal conservatism of reissuing the form against the operational benefits of allowing the lease to renew silently unless the tenant initiates communication.

Not the Same as Notice to Vacate: It is important to understand that opting out of renewal is not the same as giving notice to vacate. A lease may include a clause requiring the tenant to provide, for example,  60 days’ written notice if they intend to terminate the tenancy at the end of the lease term. This is separate from the auto-renewal provision. Opting out simply prevents the lease from renewing automatically. If the tenant does not also give notice to vacate, and the landlord is not eligible to terminate the tenancy under Berkeley’s Just Cause Ordinance, the tenancy continues on a month-to-month basis.

Consequences of Non-Compliance (BMC Section 13.79.040):

• The auto-renewal clause may be deemed unenforceable

• The tenancy defaults to month-to-month

• The tenant or the City may seek civil penalties, damages, attorney’s fees, and other costs of enforcement

Post Measure BB Reminder: As of December 2024, Berkeley’s Rent Ordinance (as amended by Measure BB) no longer allows eviction for refusal to sign a new lease. Therefore, if a tenant opts out of renewal and remains in place, the tenancy continues on a month-to-month basis, and you cannot evict them for failing to renew.

Key Takeaway: If you use the BPOA lease and choose to activate the auto-renewal clause:

• Ensure the clause meets state formatting requirements

• Deliver the opt-out form at lease signing (and consider whether you want to provide it again before each renewal)

• Comply with Berkeley’s notice and reporting rules

When used correctly, auto-renewal can simplify lease management and reduce vacancy. When used incorrectly, it can result in unenforceable terms and legal exposure.