A month-to-month rental agreement is a form of agreement between an owner and a tenant, when the property is taken up on rent for a short span of time. Unlike a fixed rent agreement, this one is quite flexible, for both, the owner and the tenant.
A month-to-month rental agreement is ideal for, both the owner and the tenant, when the said property is being let out for a short period of time.
Normally, whenever a property is taken on rent, the most likely lease agreement that is signed is that of a year. But, there are scenarios where one has to take the property on rent for a shorter period of time. If you are in the city for just a few months for a job assignment, or there is a likelihood that you might be transferred in the next coming months, a month to month agreement should be the preferred choice. If you are a tenant and have signed such an agreement, you have to keep in mind that your tenancy is valid for just a month, and you or the owner have the right to issue a ‘notice to vacate letter’ at any given point of time.
Benefits of a Month-to-Month Rental Agreement
- It is easier to get problematic tenants out of your rental property with a month-to-month rental agreement in place. If you feel that the tenant indulges in unacceptable social behavior, is disturbing the neighbors, or is damaging your property, you can cancel the agreement within 30 days.
- You are in a better position to market your property, as you know that if someone offers you a better price for it, you are free to issue a notice to the tenant to vacate the property. As this deal is temporary in nature, it will take you lesser time to make the tenant leave the property. It gives you an opportunity to increase the rent, as, in a six-month or one-year rent agreement you cannot raise the rent until the specified period is over. Also, it has been seen that people do not mind paying higher rent when signing such an agreement, as they are aware that this is just a stop-gap solution, and they would not be sticking around for too long.
- If your property is at a location which has lots of travelers, foreign students, short-term renters, etc., you can benefit immensely, and can rest assured that you wouldn’t have to do a great deal in finding new tenants. This will give a boost to your turn-over rate, and make sure that your property is sought after.
- One of the most important benefits for tenants is that they are not tied up in a long contract, and can vacate as soon as they need to. This is beneficial if one is always on the move, and does not have the time to wait for legal procedures.
- For people who are constructing their home and are sure that they are going to shift to their new house in a couple of months or so, this kind of agreement proves to really beneficial. It gives them the flexibility of moving out as soon as their house is ready.
- If you are struggling to keep jobs, a month-to-month rental agreement ensures that you can vacate the property as soon as you find it difficult to afford the premise.
- Young students also benefit from a monthly agreement, as they often live with their roommates who can move if they find a better option. They can place a 30-day notice to the landlord and vacate the property.
Month-to-Month Rental Agreement Template
Receipt is acknowledged by ________________ from _______________ for the sum of $_______ for the first month’s rent of the premises owned by ________________ located at __________________. The owner agrees to rent to _________________ on a month-to-month basis, and the rent is fixed at $_________ per month, which has to be paid in advance on ___________ every month.
The resident agrees with the following terms and conditions:
1. That the premises is in a clean and orderly manner, and free from any material that is detriment to its appearance.
2. That the property is not altered in any way without the permission of the owner.
3. That the property is not damaged in any way, and to pay the cost of repairs in case it is damaged inadvertently.
4. That no pets are kept in the premises without the permission of the owner, and the owner has the right to withdraw any permission if the pets create noise and disturbance.
5. That the number of people staying in the premises should not exceed the number specified in the agreement, and the premises is not to be shared with anybody.
6. That the owner is informed 30 days in advance about any plans of vacating the property.
7. That the premises is cleaned up and repaired (if necessary) upon vacating, or paying up the damages in case the tenant is unable to do so.
8. That violation of any of the terms and conditions of this agreement, or the nonpayment of any rent due may result in eviction from the property.
9. The rent shall be paid to _________________ or any other place designated by the owner.
Owner’s Name & Signature ___________________________
Tenant’s Name & Signature ___________________________
You can download this lease template and modify it to suit your own requirements.
As obvious by now, one should go for a month-to-month rental agreement only when planning for a short-term stay. Often, owners and tenants ignore these monthly agreements, and verbally decide the terms and conditions. While this practice is common, one should always have a legal agreement in place, as it proves to be a useful document in case of any ambiguity.