By definition a month to month agreement means that it can be ended at the end of any month. Are you sure it wasn't a lease rather than M2M?
It is legal to put clauses in about forfeiting part of the deposit for not staying 10 months to a year, not sure about certain times of year.
Josh, a m2m lease is exactly that...m2m. Any language telling tenants that they cannot terminate the agreement in one month's time could make the entire lease null and void and would not be enforceable, UNLESS you state that you require a 60 day notice in writing.
I had a tenant on a m2m give notice December 1st. She called a lawyer to challenge the 60 day notice clause. Her lawyer stated that his client would abide by the agreement and vacate on January 31st, which she did.
If the tenants are on a 12 month lease, you could say that breaking the lease will result in a fee equal to one month's rent, but I would not state that they will forfeit their security deposit or any portion thereof, because by law, these funds are not to be used for any reason other than for damages to the property.
Michele and James, thank you very much for your input! I ended up just doing a M2M lease, and kept it simple.
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