What is Month-to-Month Room Rental?
A month-to-month room rental agreement is simply a rental contract between a landlord and a tenant that has no specific end date. The length of the lease continues to last until the landlord or the tenant gives a formal notice to the other party to terminate the lease or takes some other action to terminate it. When that happens, the rental term ends. By comparison, a fixed-term lease is an agreement that lasts from the date the lease is signed until a specific point in the future. At some point in the future, the rental term ends.
It is important to understand that a month-to-month rental agreement reflects the desire of the landlord and the tenant to enter into a rental agreement for certain number of months "typically" with the intention of entering into a longer-term sometime in the near future. A month-to-month rental agreement is not designed to be short-term and should not be considered a short-term lease alternative.
For example , a tenant with a month-to-month rental agreement may give a notice to vacate as little as 30 days in advance, while the same tenant with a fixed term lease must give proper written notice to the landlord as stated in the lease. A month-to-month rental agreement might be signed for an apartment, room, house, parking space, locker, storage unit, or other spaces.
A landlord cannot evict a tenant just because the landlord wants to make a profit through either re-leasing the apartment or converting it to lose some of the rent control regulations. A landlord must have just cause to evict a tenant with a month-to-month rental agreement, which may include breach of a material term of the rental contract, the non-payment of rent, or repeated late payment of rent.
Benefits of Room Rentals by the Month
Opting for a month-to-month rental or lease agreement offers multiple advantages to landlords. Chief among these is flexibility: both for planning and enforcement. The flexibility offered by a month-to-month rental agreement is particularly useful in the event that you wish to sell the property or otherwise terminate the landlord-tenant relationship. Such agreements are also easier to enforce; in the event that you decide to terminate the relationship with your tenant, only thirty days’ notice is required. This allows vendors handling the sale of your property to work around the schedule of your tenant, for example. Likewise, you are freer to negotiate renewals of such agreements with existing tenants, or choose different tenants as the leases expire and you are free to move to a preferred tenant. It is important to note that any tenant may choose not to renew a month-to-month rental agreement, so landlords should remain flexible. For example, a tenant becomes unable to afford their rent in order to manage a serious illness or life change such as divorce, the tenant may choose to leave the rental. However, if your tenant does leave, you also are free to renegotiate an agreement with a higher rent or different terms and conditions. Ontario law allows you to terminate the agreement with your tenant for a variety of reasons. However, only thirty days’ notice is required. Thus landlords consider the month-to-month arrangement to be advantageous if short and/or variable time frames are expected for the tenant’s occupancy.
Negatives for Tenants and Owners
For both tenants and landlords, month-to-month room rental agreements present certain potential challenges. One of the most common issues for tenants is that if a landlord chooses to increase the rent charged, they may do so as long as tenants are given proper notice pursuant to state laws. While each state’s laws vary, even with the most generous permissible notice periods in some states, one month’s notice of an anticipated increase may not be enough time to allow tenants to make alternate living arrangements as needed.
For landlords, the most common issue with month-to-month agreements involves the need to terminate an agreement when you want the tenants to vacate so you can move someone else in. Again, many states have minimum notice periods. Even with long states’ notice periods even though you may want a tenant to vacate tomorrow, your lease may not allow you to force them to do so before the state-mandated notice period has elapsed.
Main Features of Room Rentals by the Month
In addition to the terms and conditions contained in any standard residential lease, a month-to-month rental agreement requires several other components that are essential to the legal status of the landlord-tenant relationship.
Rent Amount: The size of the monthly rent payment and the date the rent is due is of key importance to both parties so it is important to state these details clearly as part of the rental agreement.
Notice: As the contract typically is written to run on a month-to-month basis, it is important that the amount of notice required to terminate the agreement be included. State law requires a 30-day period for either landlord or tenant to terminate a month-to-month rental agreement, unless the rental agreement establishes a different period.
Maintenance: The agreement should clearly designate the maintenance responsibilities for both parties. Common maintenance responsibilities for the landlord include maintenance of common areas, plumbing and maintenance of major appliances. Specific apartments or complexes may designate additional responsibilities for the landlord.
Common Tenant Responsibilities: Similarly, the agreement should contain conditions specific to a month-to-month tenancy, including but not limited to the requirement that the tenant notify the landlord or complex in writing of any maintenance issues or concerns. Other elements common to month-to-month tenancy that often appear in an agreement include:
Legal Issues and Protections
Month-to-month room rental agreements are subject to both state and local legal requirements. At the state level, Rental of Residential Property is governed by the Landlord-Tenant Act, aka RCW 59.18 (the "Landlord-Tenant Act"). Most local municipalities have adopted additional tenant protections that go above and beyond those granted by the Landlord-Tenant Act. These ordinances are called "just cause" ordinances. Most just cause ordinances apply to virtually all rental agreements in the city, including both residential and commercial rental agreements. A few of our partners assist internet lodging hosts that aren’t aware of the applicability of these laws. Notably, the landlord-tenant laws have been updated in the last few years making it even easier to establish which tenant protections apply, whereas the local rent control ordinances are limited to a handful of cities. Overly summarized: Tenancy Agreements (aka Rental Contracts) The Landlord-Tenant Act allows tenants to only take possession of the leased property by written agreement to do so. (RCW 59.18.060.) However , drafting a written rental agreement between the hotel and the guest is something that a hotel should give serious consideration to under the following circumstances: Local rent control ordinances (both Seattle and King County have such an ordinance) provide additional security for tenants when it comes to preventing arbitrary, retaliatory and discriminatory evictions. A few examples of this include Some "monthly rental agreement" definitions solely apply to the monthly rental amount and not the tenancy itself. Additionally, some limited exceptions apply to certain penalties by landlords and for specific rental situations. Hedge your bets. Getting expositional assistance from a local attorney can help you catch all the legal protections that potentially impact your hotel, bed and breakfast or other small business. These limitations on landlord actions may result in extended vacancies while the owner or management company find alternative housing for impacted guests. Additionally, however, the restrictions may prevent unscrupulous owners or managers from retaliating against complainants in order to keep up the "character" of the lodging business. Generally speaking, we feel that the protections for the guests are a necessity, but tradeoffs are inherent in everyday business.
Converting a Lease to a Month-to-Month Rental
If your tenant’s lease is coming to an end, you have the option to either renew it for another fixed term or simply allow it to continue on a month-to-month basis. The later is referred to as a month-to-month rental agreement.
Obviously, you can transition from a fixed-term lease to a month-to-month agreement (or vice versa) by including specific terms in the original lease itself – but that’s not always possible. What if the original lease was a standard template lease without specific terms regarding the matter? Or what if you did not include this information in your lease agreement by accident? In that case, you will need to renegotiate the terms of the lease with your tenant so that they agree to remain in your property as a month-to-month renter.
Of course, you also have the option to include a clause about transitioning to a month-to-month agreement in the original lease and begin renting your home out on a month-to-month basis, even if your tenant doesn’t want to stay. In this case, your tenant does not have a right to stay in your home until the end of the term outlined on the lease. However, there are legal issues to consider. For instance, your tenant may be entitled to a rent reduction if they are being forced to leave before the term ends.
Negotiating a Customized Room Rental by the Month
A month-to-month rental agreement doesn’t have to be a piecemeal concoction that you throw together as needed. With a little planning, you can write a month-to-month rental contract tailored to the specific needs of the tenant and landlord that satisfies all the necessary legal requirements. Consider including these elements: Modify provisions to incorporate terms required by state law. Just because most of the provisions in standard lease agreements are also appropriate for use in month-to-month rental agreements, doesn’t mean that every provision will be. State law may require that you include certain specific provisions—or wording in your agreement—concerning topics like security deposits, rent collection, termination, and notice requirements. Make sure to look up the state regulations for these areas, and be sure to include any required provisions in your month-to-month rental agreement. Consider including additional, personalized clauses or terms. In addition to the standard terms required for these rental agreements, you can also add any additional, customized clauses that address the specific needs of the tenant and landlord. For example, you may want to include a clause that allows you to increase the rent at the end of the first 30 days if you are unhappy with the way the tenant cares for the property. You may want to include a clause that protects you in the event the tenant is away for long periods, such as the following: "Tenant shall promptly notify Owner of any intention to be absent from the premises for one week or longer. Upon such absence, Tenant shall make arrangements for someone to care for the property by watering plants, etc." This gives you the right to access the premises or terminate the agreement as soon as you find out the tenant may be vacating the property. Be sure to communicate clearly, both in language and in notifications. Because the month-to-month rental agreement is not a fixed-term arrangement, you’ll need to include a few special provisions that will help both parties understand how to properly follow this arrangement. Include a provision explaining the notice requirements for terminating the agreement on the landlord’s or tenant’s behalf, and a term requiring at least 14 days’ notice (or longer, if state law requires) for either party to make any changes in rent, utility services, or any other provisions of the agreement. The idea behind writing an effective month-to-month rental agreement is to provide both parties with a document that preserves the flexibility of a month-to-month rental—but balances the flexibility with terms and conditions that protect the rights and needs of both parties.
Common Scenarios and Illustrative Cases
One common scenario is when a tenant occupies the unit for an extended period of time under a month-to-month agreement, and then in the middle of a long-term repair or renovations, decides that he or she does not want to live there because of the noise, dust, or other disruptions. Many landlords think that tenants cannot simply vacate the premises and that they do not have to refund any rents. However, they are often wrong. Increasingly, most courts hold that tenants do not have to stay in an uninhabitable unit and that they should not have to pay rent during this period.
Another common situation occurs when a landlord issues a notice of eviction. Generally, the landlord will be required to continue to provide the tenant with the benefits of the rental agreement until the tenant vacates the unit, or the lease is terminated with full notice. Thus, if the tenant has another 5 months left on a one-year lease, the landlord may not evict the tenant until 5 months later . On the other hand, if the tenant pays on a month-to-month basis, the landlord need only give the tenant a full month to leave the unit, or a new month’s rent, whichever comes first. If the tenant does not move out after that notice, the landlord can change the locks, restore his or her rights to come onto the unit, and recommence collection activities against the tenant.
One important issue when dealing with month-to-month agreements is rent increases. Historically, landlords were not allowed to raise rents periodically. However, starting in the late 1980’s, the trend changed and a growing number of courts and legislatures began to allow them. Now, even when judges and lawmakers well underway towards accepting rent increases, some tenants still fight against them, arguing that rent increases are not consistent with the month-to-month scheme because of their inherently transient nature. Thus, in some months to month contracts courts have upheld banning rent increases, but in others have not.
No Responses