Month-to-Month Rental Agreement Template
A month to month rental agreement (or lease agreement) is a legally binding contract between a landlord and a tenant. The landlord is the rightful owner of the property and leases their property to a tenant (renter). The rental agreement sets forth the terms and conditions of the lease, including the duration of the lease, rent, security deposit, and a description of each party’s responsibilities while under the lease.
The month-to-month rental agreement is somewhat different than a standard rental agreement. A month-to-month arrangement does not have a scheduled end date. A landlord or tenant has the option to end the residential lease agreement “at-will” given proper notice under the contract. A month-to-month agreement can be more accommodating for both the landlord and the renter, depending on their individual needs. Typically renters favor this to have flexibility in where they live and for how long, whereas landlords typically prefer the security that a fixed-term rental agreement can provide them. Really it comes down to preference and comfort on both sides.
These contracts are typically the middle ground between a Tenancy At Will (a contract-less and timeframe-free arrangement) and a Year Long Rental Agreement, or whatever specific timeframe is noted in the agreement.
What is in the Month-to-Month Rental Agreement Template?
- Description of Rental Property and Real Estate Address
- Rental Term (move-in date) and month-to-month terms
- Monthly Rent Amount and Late Fee Provisions
- Security Deposit and Pet Deposit Requirements, if applicable
- Responsibilities of Landlord and Renter for Utilities, Maintenance, and Repairs
- Legal Recourse in the Event of Default or Breach
The Basics of a Month-to-Month Rental Agreement – Flexibility
A month-to-month rental agreement differs from a standard lease of one year or more. A month-to-month lease will include some of the same provisions as a traditional lease. However, it contrasts with respect to the duration and conditions for termination. Generally, with a month-to-month rental agreement, the notice of one party’s intent to terminate requires a 30-days notice before vacating the leased premises.
Termination of the Lease Goes Both Ways
The landlord or renter can provide notice of their intent to terminate the lease. Therefore, both parties must understand that at any given time, the landlord can provide the tenant with notice of their intent to end the lease leaving the tenant with 30 days to vacate the premises and vice versa.
Why do I need a Rental Agreement for a Month-to-Month Arrangement?
It may not seem necessary to have an agreement for a month-to-month arrangement. Sometimes family members lease their property to friends or family. However, having a rental agreement in place for both a traditional and month-to-month lease is critical. An oral agreement is not likely to be considered legally binding.
It is vital to have all terms in writing to prove what the parties agreed to. Certain terms include the rent due per month, the rent due date, penalties if late on a payment, security deposit procedures and refund information, pet policies, utilities, repairs, and much more.
It is a little too easy for things to become messy without a formal contract in place. For example, say two parties had an oral agreement about the monthly rent. They verbally agreed that the renter would pay $500 per month on the first of the month. However, the tenant does not pay the landlord for three months.
If the landlord tries to evict the tenant, he probably would not have much legal standing to do so. Therefore, it is crucial to have a written agreement in place. There are also other caveats that require certain documents to be in writing; that is the fancy, somewhat convoluted “statute of frauds.” It is best to have an agreement in place, even if the parties are friends or family members.
A yearly lease agreement usually has a provision providing that after the end date of the lease, the parties can agree to sign a new long-term lease or be offered the option stay on the property on a month-to-month basis.
Month-to-Month versus Yearly Rental Agreements
The magic word is flexibility. Whether or not a month-to-month (M2M) is best for a landlord or tenant depends on the circumstances. The landlord may prefer the month-to-month arrangement because he or she does not wish to be locked into a fixed-term agreement. That is the same rationale where a tenant may prefer a month-to-month lease because they do not want to be bound by an agreement for a year or more.
The landlord and tenant should evaluate their individual needs before imposing/agreeing to a month-to-month rental agreement. Some landlords prefer a yearly lease because it provides stability. Similarly, a tenant may prefer an annual lease because it is more secure, and they are protected from rent increases during the duration of the lease.
With a month-to-month rental agreement, then either party can provide notice and leave the property within 30 days. The tenant must consider that 30 days is not a lot of time to a) find another place and b) pack-up and move all of their belongings. Likewise, the landlord must accept that since the tenant can legally provide a 30-day notice, the landlord will also have to find new tenants on short notice.
It is ideal for a tenant that may have a temporary job, or that is not planning to stay in one place for the traditional term of a lease (12 to 18 months). If a landlord does not propose a month-to-month lease agreement, a tenant may propose the idea. The tenant could explain their situation, and the landlord may agree to a month-to-month arrangement, given the circumstances.
Is a Month-to-Month Rental Agreement the Right Choice for a Landlord?
A landlord can benefit significantly from having a month-to-month rental agreement in place. Nevertheless, it is not a “one-size-fits-all” agreement. Some landlords will rely on a yearly lease term instead of a month-to-month agreement to secure a long-term commitment and steady income.
A landlord may choose a month-to-month rental agreement for the following reasons:
- Time to see if the tenant is the “right fit” and reliable
- Financial flexibility and freedom to terminate the lease with short notice
- No penalty for terminating the lease
- Charge higher rent and right to increase the monthly rent with proper notice
Landlords can also get rid of an unruly or problem tenant at a much faster rate that a yearly commitment. Problem tenants may exhibit destructive behavior, non-payment of rent, or just ignore the terms of the lease, costing the landlord money. Under a yearly lease, if a tenant does not pay rent, the landlord cannot simply kick the tenant off the property. By law, they have to follow specific steps to properly evict a tenant if they are in breach of the lease. An eviction process is costly and time-consuming. A month-to-month rental agreement alleviates the headache of a potential eviction situation.
Pros and Cons of Month-to-Month Rentals for Renters
Renters may prefer a month-to-month rental agreement for some of the same reasons as the landlord. There are some benefits for tenants who are considering a month-to-month lease:
- Option to move on short notice
- No time period commitment and no end date
- Ability to look for a home to buy while not being locked-in to a yearly lease
- A place to stay while a house is being built or remodeled
- Short-term alternative housing while on a temporary job assignment
There are also some drawbacks of entering into a monthly rental agreement. The cons include:
- Short-term notice to pack it up and find a new place (your landlord may opt to not renew your monthly lease, leaving you 30 days to find a new residence)
- Typically a lack of ability to sublease
- Instability and uncertainty
- Higher rent
Common Mistakes to Avoid when Drafting a Month-to-Month Rental Agreement
A rental agreement can be as detailed as you need it to be. However, you do not want to leave it too ambiguous. The terms should be clear so that both the landlord and tenant are clear on what they will be responsible for.
- Parties to the Lease: The landlord should confirm how many tenants will be subject to the lease. The landlord should not only provide their contact information but also obtain it from the tenant(s). The information should be verified so that each party can readily contact the other. The lease should also specify who is permitted to live on the premises and if pets are allowed.
- Start Date: Even though the agreement is month-to-month and does not have a specific end date, the agreement should list the start date when the tenants take possession of the property.
- Notice to Terminate: This is the most important element of a month-to-month rental agreement. The written notice specifies how long before the landlord or renter plans to and can under the agreement, end the month-to-month tenancy. Not including a notice period is detrimental. Another typical mistake is not allowing enough time for termination of the agreement. Sufficient notice is typically 30 days. It is wise to consult with your attorney because some state laws may require a more extended notice period of 60 to 90 days.
- Deposits: The rental agreement should list the required security deposit. Each state has different laws on how much a landlord is allowed to charge for a security deposit. You should consult an attorney to confirm your state’s cap on security deposits along with other special rules or provisions.
- Pet-Friendly: A month-to-month lease should indicate whether or not pets are allowed on the premises. If so, the pet should be documented on the lease along with a security deposit, if applicable.
- Monthly Amount of Rent and Late Fee Penalties: The rent should always be listed in a lease agreement. Along with the rent amount, how the tenant should make the month’s rent payment should also be identified. The due date for the rental payments should be clearly listed along with any penalties for unpaid rent. If it is not explicitly in the agreement, the tenant may not be bound by it or any outside oral agreement made.
- Relying on a Verbal Agreement: When leasing property, this is never wise. An oral agreement is rarely enforceable, and without proof in writing, it is hard for either party to be bound by it.
- Designation of Responsibilities: To eliminate any confusion, the rental agreement should identify who is responsible for what. This can include which party is responsible for utilities and which party is responsible for repairs to the premises and to what cost. These are essential elements ensuring each party’s responsibilities are clear and adequately agreed upon.
- Signatures: This may seem basic, but it is essential. The responsible tenants listed on the agreement (i.e., the ones responsible for paying the rent) should be listed and should each sign the lease. The landlord should also sign and date the contract. Without signatures, the agreement may not be enforceable.
Let’s Get Moving – Electronic Signatures
Electronic signatures are incredibly convenient for landlords and tenants. It speeds up the process so the tenants can review and sign the agreement faster than the alternative. E-signatures are legally binding, so once the document is signed, the agreement is in place and ready to go. ApproveMe.com simplifies the signing process for you. All parties to the month-to-month lease agreement will receive a copy in their inbox for their records. A lease is one of the most important documents for both the landlord and renter; it should be easily accessible at any time. ApproveMe.com ensures all parties to the agreement get a copy to the email address provided, so the agreement is less likely to get misplaced or lost.
Landlords owning a great deal of rental property will need to keep their income steady and maintain occupancy in as many of their properties as possible. Streamline your property management with E-signatures. They are just one small but productive way to eliminate the hassle of waiting for an extended amount of time for the parties to sign the lease. Tenants will also find this electronic mode of signature and delivery easily accessible and efficient.
Landlords are always on the move. They have property to lease, which leaves little time for much else. Here are some links that may be worth looking into that focus on property management to help review potential tenants, collect rent, and organize your properties.
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MONTH-TO MONTH RENTAL AGREEMENT
This Month-to-Month Rental Agreement (“Agreement”) is entered into on this ______ day of ____________, 20__, by and between __________________________, with an address of ___________________________________ (“Landlord”) and _______________________, (“Tenant”) with an address of ________________________________.
Landlord hereby agrees to lease the Tenant the property (“Property”) located at
This rental term shall commence on ________________, 20___ and continue on a month-to-month basis until terminated by either party given thirty (30) day prior written notice to the other party.
Tenant agrees to pay Landlord $ _________ per month as the rent for the leased premises, payable, without demand, in advance on the _________ of each month. Tenant shall remit monthly rental payments via e-check, check, cash, cashier’s check, money order, or other accepted payment option. Monthly rental payments shall be sent to the following mailing address or hand-delivered in person to:
If monthly rental payment is more than five (5) days late, the Landlord shall be entitled, but not limited to payment of a late fee of $________ or of ______% and/or pursuant of any eviction proceeding.
On execution of this Agreement, Tenant will deposit the additional sum of $_____________with Landlord, receipt of which will be acknowledged by Landlord, as security for the full and faithful performance by Tenant of this agreement. The Security Deposit shall be held in an interest-bearing account as required by the State where the Property is located.
Tenant shall be entitled to reimbursement of the Security Deposit if the leased premises is in the same condition as the Tenant receives it, minus normal wear and tear. Landlord agrees to provide Tenant an itemized list of charges of any amount that is not reimbursed to the Tenant. Landlord shall return the Security Deposit within thirty (30) days of the Tenant’s return of keys or within the limits as required by law.
Tenant will not keep or be permitted to keep on the premises any animal, bird, or other pet without Lessor’s prior, express, and written consent.
Tenant shall be permitted to keep the following pet(s) on the premises:
Tenant shall pay an additional Pet Security Deposit of $___________.
This deposit is: [ ] Refundable
[ ] Non-Refundable
If Tenant has a pet on the property without the Landlord’s written consent, the Tenant shall pay a penalty of $______ for everyday the unauthorized animal is on the property without the Landlord’s consent.
Other Restrictions include: _____________________________________________________________
Tenant agrees that the leased premises will be occupied by no more than _______ persons, consisting of ________adults and _________children without the written permission of the Landlord. Only the below individuals will be permitted and known to live on the leased premises:
Name(s) and Age:
Tenant understands that no other persons shall live on the Property without prior written consent of the Landlord. Further, any persons remaining at the Property for more than ten (10) consecutive days or fifteen (15) or more calendar days in a month shall be deemed as living on the premises.
The Tenant and Landlord shall be responsible for the following utilities/services as marked below:
UTILITY TENANT LANDLORD
Additional responsibilities of the Tenant include: ____________________________________________
Additional responsibilities of the Landlord include: __________________________________________
RIGHT OF ENTRY
Landlord reserves the right to enter the leased premises at all reasonable hours for the purpose of inspection and whenever necessary to make repairs and alterations to the leased premises. Tenant grants permission to Landlord to show the leased premises to new rental applicants at reasonable hours of the day, within ________ days of the expiration of the tenancy.
ASSIGNMENT AND SUBLETTING
Tenant will not sublet the leased premises, or any part of the leased premises, or assign this lease agreement without Landlord’s prior, express, and written consent.
Any failure by Tenant to pay rent or other charges promptly when due or to comply with any other term or condition of this lease agreement will, at the option of Landlord, promptly terminate this tenancy and forfeit all rights of Tenant under this lease agreement.
MAINTENANCE AND REPAIRS
Tenant will keep and maintain the leased premises in a clean and sanitary condition at all times, and on the expiration or earlier termination of the tenancy will surrender the premises to the Landlord in as good condition as when received, ordinary wear and tear and damage by the elements excepted.
DUTY TO REPAIR
Landlord will put the leased premises into a condition fit for their occupation by the commencement of the tenancy, and will repair all subsequent conditions of the leased premises that may render them unhabitable, except that Tenant will repair all deteriorations or injuries to the leased premises occasioned by [his/her] want of ordinary care or greater degree of culpability.
No duty on the part of the Landlord will arise with respect to repairs for habitability under this section, however, if Tenant is in substantial violation of any one or more of the following affirmative obligations:
(1) to keep the leased premises as clean and sanitary as their condition permits;
(2) to remove from the dwelling unit all rubbish, garbage, and other waste, in a clean and sanitary manner;
(3) to use and operate all electrical, gas, and plumbing fixtures properly and keep them as clean and sanitary as their condition permits;
(4) not to allow any person on the premises with Tenant’s permission to willfully or wantonly destroy, deface, damage, impair, or remove any part of the structure or dwelling unit or the facilities, equipment,
(5) to occupy the premises as an abode, utilizing the portions of the premises for living, sleeping, cooking, or dining purposes only which were respectively designed or intended to be used for such purposes.
If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.
If suit is brought by Landlord for an unlawful detainer of the leased premises, for the recovery of any rent due under the provisions of this agreement, or for any obligation of Tenant arising under this agreement or by law, then Tenant agrees to pay Lessor all the costs in connection with the same, including, but not limited to, reasonable attorney’s fees, whether or not the action or actions proceed to judgment.
It is agreed that this lease agreement will be governed by, construed, and enforced in accordance with the laws
Waiver by Landlord of any breach of any covenant or duty of Tenant under this lease is not a waiver of a breach of any other covenant or duty of Tenant, or of any subsequent breach of the same covenant or duty.
This Agreement contains the entire understanding between the Parties herein and supersedes and cancels any and all prior agreements between the Parties whether oral or written, with respect to such subject matter. This Agreement may be amended or modified only by express written consent signed the Landlord.
The titles to the paragraphs of this lease agreement are solely for the convenience of the parties and will not be used to explain, modify, simplify, or aid in the interpretation of the provisions of this lease agreement.
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile. email, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
This Agreement and related documents entered into in connection with this Agreement are signed when a Party’s signature is delivered electronically, and these signatures must be treated in all respects as having the same force and effect as original signatures.
IN WITNESS WHEREOF, the Parties agree to meet the terms of the provisions above and have executed this
Agreement the day and year first above written.
Landlord’s Printed Name
Landlord’s Contact Information:
Phone Number: ________________________
Email Address: _________________________
Tenant’s Printed Name
Tenant’s Contact Information:
Phone Number: ________________________
Email Address: _________________________
Additional Tenant to this Agreement:
Tenant’s Printed Name
Tenant’s Contact Information:
Phone Number: _________________________
Email Address: _________________________
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