Tenant Wants to Change 1 Year Term Lease to Month to Month

[Alisa Clairet]

My tenants are currently on a one year fixed term lease. We are located in LA, California. He and his wife earn upwards of $300,000. They have just had their first child and would like to buy a home in LA. Upon sending them the new lease for the upcoming year, they requested that I modify the term of the lease to a b a 6 month term lease that would automatically turn into a month to month so they would have the flexibility they want to purchase a home and move out without paying any penalty for breaking the lease early. I like my tenant but this seems like I would be giving up the security of having a fixed 1 year lease. Is this a common thing that landlords do for their tenants or am I too new at this business? I'm not sure how to respond to them. Any advice would be greatly appreciated.

[Kyle Hipp]

Alisa, if a tenant is planning on purchasing a home, this is the best path you can have happen. The tenant has made this request and informed you well in advance. I would grant their request with a slight bump in rent, maybe 5%. This 6 month lease will then be up at the end of March or April. Spring is the start of buying season and moving season as well. Just ask that they keep you up to date when they do find a home to purchase so you can be prepared to rerent. You might want to talk about the possibility of them going back to a fixed lease come next september/october, or word it in such a way to encourage them to not move when it is inconvenient for you such as in the winter months. This should not be too big of an issue because many people do not want to move themselves in the winter months.

Always look for ways to find a win win and that gives you the best footing going forward. Good luck