Month To Month Lease Transition To 6 Month Lease

[Charles Heistand]

Hello BiggerPockets!

Have a question regarding a transition from a M2M lease to a 6 month lease.

My wife and I inherited several tenants when we purchased our 6 family 8 months ago. One of the units asked us last month if we would be willing to install new carpeting which we said that we would be willing to do but we would have to raise their rent $40 a month and have them sign a 6 month lease to help pay for the carpet as where it was installed would be eventually removed and LVP installed when they finally vacated the unit and we did a full renovation on the unit. With signing a 6 month lease and raising their rent the tenant would essentially pay half and we would pay half unless they stayed past the 6 month lease.

The lease was signed on 2/24/2022 to start on 4/1/2022 because of the 30 day window required to change the M2M lease. The tenants came to us today and have told us that they will be potentially moving out on 3/31/2022 prior to the start of the 6 month lease. What we are wondering is if the 6 month lease is still enforceable because they will be moving prior to it starting but it is already signed and is now a legal document?

What we are trying to determine how to move forward at this point? Do we keep the security deposit? Charge them April's rent? Are we out of luck and shouldn't do these kind of projects again in the future prior to the lease being signed? Anyone else ever run into this situation before?

We are happy that they are leaving because we are going to fully renovate their unit and raise the current rent from $660/mo to $950/mo but are also irritated because we put $750 into carpet that is essentially going to be thrown away because in our area the rents we want to get required LVP to be installed.

We are going to reach out to our attorney tomorrow but wanted to see if anyone else had experience with this. Thanks for any advice that you are able to provide.

[Nathan Gesner]

Quote from @Charles Heistand:

Hello BiggerPockets!

Have a question regarding a transition from a M2M lease to a 6 month lease.

My wife and I inherited several tenants when we purchased our 6 family 8 months ago. One of the units asked us last month if we would be willing to install new carpeting which we said that we would be willing to do but we would have to raise their rent $40 a month and have them sign a 6 month lease to help pay for the carpet as where it was installed would be eventually removed and LVP installed when they finally vacated the unit and we did a full renovation on the unit. With signing a 6 month lease and raising their rent the tenant would essentially pay half and we would pay half unless they stayed past the 6 month lease.

The lease was signed on 2/24/2022 to start on 4/1/2022 because of the 30 day window required to change the M2M lease. The tenants came to us today and have told us that they will be potentially moving out on 3/31/2022 prior to the start of the 6 month lease. What we are wondering is if the 6 month lease is still enforceable because they will be moving prior to it starting but it is already signed and is now a legal document?

What we are trying to determine how to move forward at this point? Do we keep the security deposit? Charge them April's rent? Are we out of luck and shouldn't do these kind of projects again in the future prior to the lease being signed? Anyone else ever run into this situation before?

We are happy that they are leaving because we are going to fully renovate their unit and raise the current rent from $660/mo to $950/mo but are also irritated because we put $750 into carpet that is essentially going to be thrown away because in our area the rents we want to get required LVP to be installed.

We are going to reach out to our attorney tomorrow but wanted to see if anyone else had experience with this. Thanks for any advice that you are able to provide.

Even though they have not started their lease, the carpet will replacement was contingent on them staying for 6 months. Whether a judge would uphold that in court is an entirely different question. I would tell the tenants they are responsible for their half of the carpet or you will take them to court. Try that and see how they respond.

i want to know why you would spend $1500 on carpet you intend to pull out six months later? That was a really bad decision.