Month-to-month lease: Overview, definition, and example
What is a month-to-month lease?
A month-to-month lease is a type of rental agreement where the tenant rents the property on a monthly basis, without a fixed term. This means the lease automatically renews each month unless either the landlord or tenant gives proper notice to terminate the agreement. A month-to-month lease provides flexibility for both parties, as it doesn't lock the tenant into a long-term commitment, and either party can end the lease with short notice, typically 30 days.
This type of lease is often used for residential rental properties, but it can also apply to commercial leases in certain circumstances.
Why is a month-to-month lease important?
A month-to-month lease is important because it offers flexibility for both the tenant and the landlord. For tenants, it allows the ability to move out with minimal commitment, which can be beneficial if they are unsure about how long they will need the rental property or if they anticipate changes in their living situation. For landlords, it provides the ability to change rental terms or regain possession of the property relatively quickly if needed.
While a month-to-month lease is more flexible, it can also lead to instability, as the landlord or tenant can terminate the lease with little notice. This can result in uncertainty, particularly for tenants who are looking for more long-term housing stability.
Understanding a month-to-month lease through an example
Imagine Jane rents an apartment under a month-to-month lease. After several months, she finds a new job in a different city and decides to move. She only needs to give the landlord 30 days' notice before vacating the property, and she is free to move out without facing penalties for breaking a fixed-term lease. Similarly, the landlord could decide to raise the rent or end the lease at any time, as long as they provide the required notice.
In another example, a small business owner rents office space under a month-to-month lease. The flexibility of the lease allows the business owner to adjust to changing needs without being tied to a long-term commitment. If the business expands and requires more space, they can move out at the end of the month with proper notice.
An example of a month-to-month lease clause
Here’s how a clause about a month-to-month lease might appear in a rental agreement:
“This Lease Agreement shall continue on a month-to-month basis after the initial term ends, unless terminated by either party with at least 30 days' written notice. Either the Tenant or Landlord may terminate this Agreement at any time during the term of the lease by providing the required notice.”
Conclusion
A month-to-month lease offers flexibility, allowing tenants to rent a property on a short-term basis with the ability to end the agreement relatively easily. While this type of lease provides benefits for tenants who need flexibility, it can also create instability as either party can terminate the lease with short notice. Understanding the terms and conditions of a month-to-month lease is important for both tenants and landlords to ensure clear expectations and prevent disputes.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.