If you’re a tenant looking for convenience and flexibility, a month-to-month lease might be a good fit for you. This type of lease commits you to only a month at a time and allows you to cancel the lease at any point. There’s no loss of security deposit and no other penalties for canceling your lease as long as you give your landlord 30 days advance notice of your intent to move. A month-to-month lease can be attractive when you plan to live in an area for less than 12 months, buy a house in the near future, or if your future plans are uncertain. The downside is that rent is typically higher than a longer-term lease. Still considering a month-to-month lease agreement? Here’s what you need to know:
A month-to-month rental agreement is a lease you can terminate at any time with proper notice. Depending on your state, the required notice period could be as short as 30 days or as long as 90 days. Month-to-month leases typically renew automatically at the end of each leasing period. Month-to-month leases don’t necessarily need to be short-term. While they are nice if your situation requires short-term housing, a month-to-month lease can last years. However, because of the monthly renewal, a landlord could also ask you to leave at any time with the proper notice.
A month-to-month lease is sometimes called “estate at will” or an “at-will” agreement.
Something to note: A month-to-month lease is very similar and often confused with a tenancy-at-will agreement, but there is one key difference. A tenancy-at-will is often a verbal agreement instead of a written lease contract. It also continues as a month-to-month agreement until either party gives notice.
Tenancy-at-will is in place when a tenant and landlord have a general verbal agreement about the tenancy but nothing in writing that states the rental period or any required notice for moving out. There may be written terms about rental rates, however.
Just like with a standard rental agreement, both the landlord and tenant need to comply with the landlord/tenant rules within their state. For example, the tenant must keep current with rent payments and take financial responsibility for any damage they cause that is not normal wear and tear. The landlord is obligated to maintain the property in a livable condition and must provide the tenant with a 24-hour notice before entering the property.
A holdover tenant, also referred to as “tenancy at sufferance,” is a month-to-month tenant whose lease has expired and who no longer has the landlord’s permission to remain in the property, but has not yet been evicted.
If a holdover tenant continues to pay rent and the landlord accepts the rent, their rental terms change to tenancy-at-will, and they have the right to remain in the property.
If the landlord doesn’t accept rent payments from the holdover tenant, the situation will be considered trespassing, which means the tenant must move out of the home or face eviction.
You may find an opportunity to rent a room from a private homeowner on a month-to-month basis. Renting a room this way works much the same as renting an apartment month-to-month but usually involves a few additional rules in the lease to ensure household harmony.
You will be asked to sign a lease agreement when renting a room month-to-month. Typical lease terms include:
This protects both the homeowner and you and documents the rights and responsibilities of both parties.
The lease agreement for renting a room will also include what happens when you terminate the tenancy, including how and when the notice must be delivered to the homeowner and vice versa. In addition, most private homeowners will include house rules such as possible curfews and any restrictions on guests, smoking, or drinking alcohol. The house rules may also include areas of the home which are off-limits to the tenant.
As a tenant renting a room on a month-to-month basis, you may have more house rules to follow – but less responsibility, such as overall maintenance and clean-up, than you would in a regular month-to-month rental.
There may be a few situations where renting month-to-month makes sense.
Month-to-month tenancy can also benefit landlords looking to increase rents regularly, complete renovations or improvements at the property, or consider selling your house in the near future.
A month-to-month lease is common among close friends or family members. People are often willing to offer short-term situations to help someone they know well, want to help out, and can trust.
Tenancy at-will might be a logical next step in some situations once the month-to-month lease has expired. Tenancy at-will allows you to leave the spur of the moment, as well as avoid rent increases.
While a month-to-month lease may sound ideal for flexibility and convenience, there are a few drawbacks.
A month-to-month lease works in the same way as a long-term lease, with rental terms that involve:
It is essential to calculate how much rent you can afford in a month-to-month apartment. A month-to-month lease usually includes a clause that outlines the landlord’s right to raise the rent at the next lease renewal.
If either party wishes to terminate the lease, they must, at minimum, provide the other with a 30-day notice, although either party can also ask for more time to terminate the lease if necessary.
However, unlike with a long-term lease, the landlord can change any lease terms with a 30-day notice. Local and state laws will dictate the notice period and how much the rent can be increased.
To end a month-to-month agreement, the tenant or landlord must provide the other with a notice to vacate. This is a written notice with a standard of 30 days to comply.
Exceptions will come into play in certain situations, such as if the renter has damaged the rental property or if they are not following the rules and responsibilities outlined in the lease agreement. In these situations, the landlord has the right to ask the tenant to move as soon as possible without giving additional notice or taking formal steps to evict. However, if the tenant refuses to leave, a landlord must follow the notice process specified in local landlord-tenant regulations and all appropriate steps to initiate eviction.
Unfortunately, if the landlord gives you proper notice, you have no legal recourse. That is the nature of a month-to-month lease.
Unlike the landlord’s ability to make monthly changes, as a tenant, notices don’t work the same way. The lease still states any rights and responsibilities you have as a tenant. However, you could ask your landlord to approve you for a standard lease if your plans solidify and you know you’ll be staying in the area for an extended period of time.
Whether or not a month-to-month rental situation suits your needs will depend on your circumstances, budget, and living preferences. Month-to-month rental agreements offer great flexibility for tenants, but be sure to consider all the factors before signing on the dotted line.
If you are represented by an agent, this is not a solicitation of your business. This article is for informational purposes only, and is not a substitute for professional advice from a medical provider, licensed attorney, financial advisor, or tax professional. Consumers should independently verify any agency or service mentioned will meet their needs. Learn more about our Editorial Guidelines here.
Holly is part of the content marketing team and enjoys writing about home improvement and lifestyle. Her dream home would incorporate both an industrial and biophilic design.
