Rental Property Investor · Urbandale, IA · Member since 2015 · 32 posts · 5 votes
I have a tenant that has lived in my rental for over a year now and the year lease has expired. I don't feel comfortable offering another year lease to this tenant do to the individual has committed to other financial obligations that most likely strand their budget.
I think that it would be wise to offer a month to month lease option for this tenant. My current lease term duration states it shall start from XXX to and including XXX.
Should I have my attorney draw up a month to month rental agreement? My current lease has start and including language. Do most landlords have two sets of rental agreements one that is month to month option and one that has a year duration option?
Cincinnati, OH · Member since 2013 · 1k+ posts · 1k+ votes
10y
@Rob BrownWhile most leases default to a month to month when they expire, you should still try to get the tenants to sign a month-to-month lease or revise the language as @Marcia Maynard suggested.
I just went through financing for a personal home and the bank insisted on seeing all current leases o our properties and refused to give me credit for the tenants with expired leases even though they were paying M2M. @Rob Brown
Chicago, IL · Member since 2016 · 18 posts · 18 votes
10y
From my understanding in Chicago, when a tenant that was on an annual lease still remains in the residence after the inital lease term has expired, they are automatically under a month-to-month agreement. Our law for terminating a month-to-month agreement is that either party has to provide the other party with a 30-day written notice ending the agreement where the 30 days should coincide with the rental period. This should be done at least 30 days before the next rental payment is due.
As a practice, I have my tenants sign an explicit month-to-month lease which is the same as my annual lease with only a few updates to the appropriate rental period clauses. (I typically make these edits myself as the only changes are the time period and verbiage relating to the duration of the lease.) I feel that having an updated month-to-month agreement protects both parties a bit more as it explicitly states agreements (expectations). Also, having a formal lease allows you the opportunity to make other updates/changes as needed, such as an increase in rent or a change to a pet clause, for example.
At the very least and depending on your local laws, send the tenants a formal letter that explains that until a formal lease agreement has been executed the tenants are automatically entered into a month-to-month lease with the same terms as the prior annual lease agreement.
I have a tenant that has lived in my rental for over a year now and the year lease has expired. I don't feel comfortable offering another year lease to this tenant do to the individual has committed to other financial obligations that most likely strand their budget.
I think that it would be wise to offer a month to month lease option for this tenant. My current lease term duration states it shall start from XXX to and including XXX.
Should I have my attorney draw up a month to month rental agreement? My current lease has start and including language. Do most landlords have two sets of rental agreements one that is month to month option and one that has a year duration option?
Thanks
When a lease expires, and the tenant keeps paying rent and the landlord keeps accepting it, what you get is the same lease terms - except that it's now month to month. There's no need to write up anything new. Although, in some states - I think WA? - when a lease expires, the old terms disappear, and the tenant automatically goes month to month and is covered by the M2M state laws. So, check to see if there's anything like that where your property is. That's an unusual law, though.
But, either way, with a M2M agreement, you can just change any of the terms with 30 days notice and the tenant doesn't have to sign off on them. So, in other words, you give 30 days notice that smoking is no longer allowed on the property, or that pets will no longer be allowed, etc.
Some things require more notice, depending on where you are. In CA, even if the tenant is M2M, after they've been there for over 1 year, the LL must give them 60 days notice to terminate. And 60 days notice if the rent will be raised more than 10%.
Point being, learn the laws if you don't already know them. But, know that even if you don't get a formal new M2M agreement signed by the tenant, they are already automatically on a M2M agreement. And that would normally be the same lease terms - except that the term is now M2M, with everything else staying the same.
Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
10y
We prefer month-to-month agreements, but sometimes allow for an initial lease period of more than a month. We use one contract that allows this flexibility. Here is an excerpt from our rental agreement that covers this:
WITNESSETH: That for and in consideration of the payment of rents and the performance of the terms of tenant’s covenants herein contained, landlord hereby rents to tenant, and tenant rents from landlord, for use as a residence, those certain premises located at _____________________
_____________________________________________________________________________ for an initial lease period of ____________________ to ____________________ and converting to a month-to-month tenancy thereafter.
Cincinnati, OH · Member since 2013 · 1k+ posts · 1k+ votes
10y
@Rob BrownWhile most leases default to a month to month when they expire, you should still try to get the tenants to sign a month-to-month lease or revise the language as @Marcia Maynard suggested.
I just went through financing for a personal home and the bank insisted on seeing all current leases o our properties and refused to give me credit for the tenants with expired leases even though they were paying M2M. @Rob Brown