What is a Month-to-Month rental agreement?

A month-to-month rental agreement, also known as tenancy-at-will, is a short-term lease arrangement between a landlord and a tenant. It can be terminated with a 30 days’ notice period (refer to required termination period). Tenants under this lease have rights and responsibilities similar to those under a standard lease.

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Understanding Month-to-Month Leases

A month-to-month lease is a flexible rental contract that continues until either party amends or terminates it. Termination notice must comply with State laws (see table below). It’s advisable for either party to send the termination notice via Certified Mail with a return receipt from USPS to ensure proof of receipt.

Process of a Month-to-Month Lease

Step 1 – Tenant Screening (Rental Application)

Before discussing property rental, landlords should conduct a background check via a rental application to assess potential tenants’ credit reports, criminal backgrounds, and references. Landlords typically charge applicants between $18 to $75.

• Use References:
  • Limited Background Check ($18.95) – RentPrep.com
  • Detailed Background Check ($35 per screening) – MySmartMove.com
  • Employment Verification – Validate the applicant’s income to support rent payments.

Step 2 – Negotiation Begins

After assessing the tenant’s creditworthiness, negotiations commence. Tenants with high-paying jobs and good credit often have better negotiating positions. Landlords may seek a security deposit equivalent to one month’s rent or more for higher-risk tenants to cover potential damages or eviction costs.

Step 3 – Drafting the Lease

Upon negotiation completion, both parties should draft a lease agreement. It’s recommended to use State Specific Leases from reputable sources, ensuring all negotiated terms (e.g., rent, deposit, parking, pets) are accurately recorded.

• Disclosure Forms:
  • Lead-Based Paint Disclosure – Mandatory for properties built before 1978.
  • Move-in Checklist – Required to settle Security Deposit issues post-tenancy.

Step 4 – Executing the Lease

After agreeing to lease terms, parties meet to sign the lease. Tenants should bring first month’s rent, security deposit, prorated rent (if moving in before the month starts), parking fees, pet fees, and pre-paid rent (if any). Landlords must provide access to the property and a copy of the executed lease.

Step 5 – Occupancy Begins

Tenants may now occupy the property. They become bound by the lease terms upon occupancy or as agreed, contingent on notice from either party to quit or vacate.

Step 6 – Terminating the Lease

To terminate the month-to-month lease, landlords must send a termination letter stating the notice period and reason for termination.

Guide to Drafting

Declaration for Month-to-Month Lease

• Landlord Identification: The landlord’s full name, intending to lease their property monthly, must be stated in the initial declaration of this agreement.
• Tenant Identification: Every tenant’s complete name, intending to engage in this month-to-month lease agreement, should be included in the introductory section of this document.
• Date: The formal date of this agreement is required, preferably aligning with the intended effective date.

Premises

• Street Address: Specify the property’s location that the landlord intends to lease monthly to the tenant, beginning with the street address, including any unit numbers if applicable for access.
• City:
• State:

Lease Terms

• Commencement Date: Establish the first calendar date when the lease becomes effective, allowing the tenant to occupy the property in exchange for rent.
• Notice of Termination: Although this month-to-month lease offers flexibility in termination, it necessitates a certain number of days’ notice before the end of the month. Ensure compliance with relevant jurisdictional requirements.
• Verification of Notice Period: Specify the number of days before the first of the month that the tenant must provide notice to terminate the lease.

Lease Payments

• Monthly Rent: Document the exact rent amount the tenant must pay monthly.
• Due Date: Establish the calendar day by which the landlord must receive the rent payment.

Late Fees

• Penalty Payment: Detail the final date of the month by which rent can be paid without incurring a late fee.
• Penalty Amount: Specify the additional amount charged as a penalty for late payment.
• Default Due to Nonpayment: Document the final calendar date by which the landlord expects payment before further action is pursued.

Insufficient Funds

• Bounced Check Penalty: Specify the penalty amount charged if the tenant submits a check with insufficient funds.

Security Deposit

• Deposit Amount: Specify the security deposit required by the landlord, refundable upon lease expiration barring any damages, in accordance with state regulations.

Defaults

• Default Period: Document the number of days the landlord will wait for a tenant response before taking further action in case of lease violations.

Occupants

• Property Occupancy: Specify the maximum number of occupants allowed without requiring landlord approval.

Assignment and Sublease

• Subletting: Indicate whether subleasing is permitted and if so, subject to landlord approval.

Utilities and Services

• Landlord Responsibilities: Enumerate the utilities and services the landlord is responsible for maintaining during the lease.
• Additional Obligations: Any utility or service not listed is assumed to be the tenant’s responsibility.

Pets

• Pet Policy: Outline the requirements for keeping pets on the premises, including pet deposits.

Abandonment

• Tenant Absenteeism: Define the minimum duration of tenant absence before the property is considered abandoned.
• Rent Abandonment: Specify the minimum duration of unpaid rent before the lease is considered abandoned.

Governing Law

• State Jurisdiction: Identify the state whose laws govern the legality and enforcement of this agreement.

Display of Signs

• Advertising Period: Document the duration before lease termination when the landlord can advertise the property for rent.

Noise

• Furniture Delivery and Removal: Specify the allowable time frames for furniture delivery and removal.

Parking

• Parking Arrangements: Indicate whether the tenant is permitted to park on the property and, if so, specify the details.
• Assigned Parking: If parking is permitted, document the location and number of vehicles allowed.

Balconies

• Balcony Usage: Specify whether the tenant is allowed to use the balcony for specific activities.

Additional Terms and Conditions

• Additional Agreements: Include any additional provisions agreed upon by the landlord and tenant.

Landlord’s Signature

• Signature: The landlord must sign to finalize the agreement.
• Printed Name:

Tenant’s Signature

• Signature: The tenant’s signature indicates agreement with the outlined conditions.
• Printed Name