Key Takeaways
- Month-to-month leases offer flexibility for both landlords and tenants but also come with risks like higher tenant turnover and less predictable income.
- While tenants in monthly leases are protected under standard landlord-tenant laws, landlords can still evict them for valid reasons and adjust rent with proper notice.
- Understanding and complying with notice periods and rent increase regulations is essential for legally and fairly managing month-to-month tenants.
- For property owners considering short-term leasing, knowing tenant rights is key to avoiding legal missteps and maintaining stable, respectful rental relationships.
What Legal Rights And Protections Do Month-to-Month Tenants Have?
If you’re a landlord or property manager, you’re likely familiar with 12-month leases—the industry standard for lease agreements, signed for an entire year with the possibility of renewal afterwards. You may be less familiar with periodic leases, also known as month to month, leases. How do they work? Why would you choose a month to month lease over a 12-month lease? And most importantly, if you do decide to do this type of leasing, how do month to month tenant rights differ from those of 12-month leases? Follow along as we answer each of these questions to help you understand the basics of monthly leasing and the legal procedures you must follow with month to month renters to ensure you’re compliant.What is a Month-to-Month Lease?
According to a 2022 CPI Housing survey, over 59% of leases are yearly, while 31% are month to month. While monthly leases are less popular, they’re still a common lease type that comes with unique pros and cons as well as specific landlord-tenant laws. So, what is a month to month lease? This type of lease operates very similarly to yearly leases with one major difference: The time commitment on the rental agreement. With yearly leases, tenants are committed to at least 12 months in one unit with penalties for breaking the lease early. With monthly leases, however, the agreement simply states that the rental period is 30 days and automatically renews each month unless the landlord or tenant ends the contract. Often, monthly leases come as an option after an annual lease has expired but a tenant would like to stay in the unit. With this option, the tenant isn’t locked into another full-year commitment but can continue to live on your property for some time. Some landlords choose to only practice short-term renting, though, and there are advantages and disadvantages.Advantages and Disadvantages of Month-to-Month Leasing
Why do some landlords choose a monthly lease over a yearly one? There are many things to consider when deciding which type of lease to use with new tenants, so let’s look more closely at the advantages and disadvantages of month-to-month leasing.Advantages
- Flexibility. Because month to month leases don’t have a set rent period, landlords are offered more flexibility and control over the lease agreement—specifically, when it ends. If you decide a tenant isn’t a good fit for your unit, it’s easy to end the lease at the end of the month and find someone else.
- Competitive income. With short-term leases, you’re offered more room for higher rent prices, allowing you to stay competitive with the annual lease units in your area. And if you choose to, you have more opportunities to raise your rent than you would with a year-long lease.
Disadvantages
- Flexibility. Just as you have the flexibility to end a month to month lease, your tenants do, too. If a tenant chose your unit as a temporary solution while looking for permanent housing, or if a renter stayed in your Florida unit just for the winter months, they could easily terminate the lease at the end of the month with no penalty.
- Unreliable income. The flexibility for tenants to move out more quickly means that you may end up with vacancies from time to time while searching for another month to month renter to fill your unit. Be prepared to occasionally miss out on steady rental income when you experience tenant turnover.
Tenant Rights in a Month-to-Month Lease
When deciding to use a periodic lease for your rental property business, it’s crucial to understand the details of month-to-month lease tenant rights. While many laws and regulations are similar or the same as those of annual leases, some things are different. Here are some tenant rights for month to month leases that you should know before having a monthly tenant move in:1. Tenants are still offered the usual rights under landlord-tenant laws.
While month to month leasing has some differences from fixed-term rental agreements, tenants are still offered protections under landlord-tenant laws. This means you must still follow the same practices you would with a standard lease, like ensuring the unit is habitable, responding to maintenance or repair requests in a timely manner, and doing periodic inspections of the space. This also means that tenants must follow the same landlord-tenant laws, like properly using the property and paying rent on time. Both you and your tenants must still do your part to comply with these laws and help the rental process go smoothly.2. Tenants can still be evicted.
While month to month tenants are still protected by landlord-tenant laws, that doesn’t mean they have free reign over your unit while they’re living in it. If a tenant is refusing to pay rent, involving themselves in illegal activity on the property, or causing excessive damage to your unit, you still have the right to file for eviction and have the tenant removed.3. Either you or your tenant can end the lease with proper notice.
One of the main topics regarding monthly leases is how to end them. Under a month to month lease, both you and your tenant have the right to end the lease for any reason (except for discriminatory or retaliation purposes) with proper notice. The requirement for proper notice is usually at least 30 days; however, be sure to check your state’s laws as some states (like North Carolina, which only has a 7-day requirement, or Delaware, which has a 60-day requirement) have stricter or looser requirements for this.4. Rent can be raised after each month.
In a standard fixed-term lease, the rent rate cannot be changed while a lease is still in effect and is only able to be raised once the lease is up for renewal once each year. In a month to month lease, though, the contract ends and renews every 30 days, allowing you to increase the rent more often to improve the apartment or compete with local rent prices. Keep in mind that rent increase notices should be in writing and must be done in advance (usually 30 days before the new rent price goes into effect). This doesn’t mean you should be raising the rent every month, though. An increasingly more expensive unit, especially with no cause, is a major disadvantage to a tenant and may cause them to move out of your rental property.Conclusion
Whether you’re interested in fixed term leases or month to month, the type of lease you choose to use ultimately depends on you and the needs of your business. If you choose to practice monthly leasing, it’s vital to understand month to month renters rights. With this new knowledge, you can ensure you stay compliant with the law and treat all your tenants fairly.
