How to Write a Non-Renewal Letter

by Laura Paquette; Updated September 26, 2017
Some employees, especially those hired on a contract basis, may face a non-renewal based on reduced need or budget cuts.

When a certain employee, tenant, or policy holder must be notified that their contract is not being renewed, a non-renewal letter written with tact and professionalism can facilitate an amicable separation, not to mention save time and heartache. This is a somewhat tricky maneuver; the non-renewal letter must be balanced between a firmly stated position and a sensitivity to the recipient's emotions. However, you can adapt a relatively basic form for your individual professional needs.

Step 1

Clearly state your purpose. Any ambiguity can open the door for confusion later on. Your opener should read, "You are receiving this letter because you currently (hold a policy with, work for, etc.)." After stating the name of the business or organization in question, explain that the reader is being non-renewed. For more sensitive matters, such as a work position, the letter should follow a phone call or personal meeting explaining briefly the reasons for non-renewal.

Step 2

Give an honest reason for non-renewal. Your recipient deserves a valid explanation for the decision. In many cases, the reason can be as simple as a change in policy, budget cuts, or regular termination of the position. If the decision was based on poor performance, say so with an example. For instance, "You are being non-renewed because of your performance in the work capacity, particularly in terms of punctuality and commitment to the job." Avoid cattiness or overly accusatory statements; instead, remain calm and professional. Be sure you have specific incident reports to back up any statements of wrongdoing or poor performance should the decision come into question.

Step 3

Explain the options available to the recipient. For a policy change, give alternatives and a specific date of termination. In a workplace or lease non-renewal, it is critical to not only give a time frame, but instructions pertaining to remaining vacation time and responsibilities. This is also an opportunity, should you choose, to inform the recipient about the process for appealing the non-renewal. Provide contact information for the person in charge of that process or a link to the appropriate website for further information.

Step 4

Be courteous. In many cases, a non-renewal comes as a surprise to the recipient, and it can be a tough letter to read as it often represents a major life change. Thank the employee, policy holder, or tenant for their time and contributions to the business and wish them luck in their future endeavors. Do not, however, allude to any misgivings or doubts about the decision, as this may suggest to the recipient that he or she should contest the decision, or even take it to court.

Step 5

Sign the letter with your name and position. Give your title and contact information so that the recipient will understand your authority in the decision and will be able to reach you with questions. If you are simply reporting on a policy change, add that the non-renewal is in accordance to that policy, and attach it for reference.

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