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What Is a Month-To-Month Lease and How Does It Work?

By Teri Dormer

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Moving into a new home typically isn’t something you do for a short period of time. Even though most of us tend to move a dozen times (or more) over the course of our adult lives, the idea of home is usually something you think about as a relatively permanent arrangement.

After all, they say home, not a hotel or a vacation rental, is where they say the heart is, right?

And while you might have more familiarity with a renters agreement that extends a full year (or longer), there are instances where you might need to consider the value of a month-to-month rental agreement that gives you the flexibility to terminate your lease without having to pay a fairly sizable fee.

Trying to figure out the ins and outs of a month-to-month lease? Don’t worry, we’ve got the details you need.

What Is a Month-to-Month Lease?

A month-to-month lease, as the name suggests, is a version of the traditional rental agreement that only extends for a month at a time. Not to be confused with a short-term lease, where you agree to rent a property for a set number of weeks or an entire month, a month-to-month rental agreement will automatically renew if you (or your landlord) don’t terminate the lease. 

How Does a Month-to-Month Lease Work?

In most cases, month-to-month leases carry the same terms as a long-term lease, including any necessary deposit and a required amount of time to give notice that you’re planning to vacate the property. Every lease is different, but even a month-to-month lease arrangement may require you to give a 30-day notice if you won’t be renewing for the next month. 

How to End a Month-to-Month Lease

The benefit of a month-to-month lease is that you have the flexibility to terminate the arrangement when you need to. Except in the case of retaliation or discrimination, your landlord doesn’t have to give a reason for deciding to terminate your lease and neither do you.

Just like a fixed-term lease, you need to know how to end a month-to-month lease. If your rental agreement stipulates 30 days’ notice, you should assume this means 30 days from the point after your landlord receives either your written or verbal termination request. 

Do You Have to Give a 30-Day Notice on a Month-to-Month Lease?

In many cases, you may have to give a 30-day notice on a month-to-month lease. It depends on the stipulations in your lease agreement. Month-to-month rental agreements typically roll over every 30 days, which means if neither you or your landlord make an effort to terminate the lease, it can go on for as long as you want. 

Each state has different laws for the amount of time landlords and tenants are required to give each other if they plan to terminate the rental agreement, but 30 days is the standard timeframe, even with a month-to-month lease. 

Check the details of your lease to clarify if you’re required to give notice of termination at the beginning of the month rather than in the middle of the lease period. Some landlords don’t want to be left with partial months with a tenant and thus require you to give notice and vacate at the start of the month.

Month-to-Month vs 12-Month Lease 

So how do you decide which option is right for you between a standard rental agreement or a month-to-month lease? For most people, it’s about choosing whether you value the security of a long-term arrangement or the flexibility to terminate the lease over a shorter period of time. 

It’s important to note that the flexibility of a month-to-month lease won’t necessarily come cheap, either. Because your landlord is also losing out on the security of a long-term tenant, the cost of a month-to-month lease is typically much higher than a standard rental arrangement.

In some cases in month-to-month leases, you could expect to pay 50 to 100 percent over the going rate for a similar property with a 12-month lease. 

If you previously entered into a long-term lease agreement for your apartment or home, your landlord may offer you the option to renew on a month-to-month basis. This can be especially valuable if you’re thinking about moving elsewhere but need a few additional months to make your decision.

Benefits of Fixed-Term Rental Leases 

Fixed-term leases are the most common type of rental agreement, and typically stipulate a year of residence, though some may fluctuate between 11 and 15 months. 

The biggest benefit of long-term leases is that your landlord can’t adjust the details of your lease until it’s time to renew, and even then, there are often state and local laws that dictate how much your lease can change. Landlords are legally barred from raising your rent during the middle of your lease, and they can’t terminate the lease without your consent.

Negotiating Your Rental Agreement 

A lease is a legally binding agreement between you and your landlord, so it’s important to understand all of the fine print. If you aren’t planning on moving again in a short period of time, you might prefer the security and cost savings of a fixed-term lease. 

Of course, if you do end up having to move, you could be responsible for hundreds or even thousands of dollars in fees in order to break your lease early. 

If you need the flexibility of a month-to-month rental agreement, you’ll probably end up paying more in rent each month, but you’ll have the option to renew or cancel every 30 days. Your landlord will have a similar option, so be confident month-to-month makes sense for your needs before opting to sign that kind of lease.

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