Whether you’re a new landlord setting up your first rental agreement ever or you’re a more experienced landlord that needs a refresher on putting together a month-to-month rental agreement, it’s important that you get a full understanding of what to include and why.
Tenancy at will situations, also known as a month-to-month lease agreement, may at first seem to be a bit confusing in how they differ from standard lease agreements. The simple fact is that the only real differences are the time limitations set up by the agreement.
Do you know what to include in this type of rental agreement, the month-to-month clause and all? It’s important that you know what to include ‒ and why ‒ when setting up your agreement, or you could be creating a liability for your business.
Let’s examine our free month-to-month lease template together so that you can get a better understanding of what you should do with this type of agreement and how to do it.
A Table of Contents For Month-To-Month Rental Agreement Forms
- What is a Month-to-Month Rental Agreement Form?
- How to Use a Month-to-Month Lease
- The Month-to-Month Lease Template
- Month-to-Month Rental Lease Breakdown
- Final Tips & Notes
A lease or rental agreement is a contract between a landlord and tenant, which details the nature of the tenancy that will occur. This agreement contains all of the necessary information that should be settled between both parties before the tenancy begins. Some of the details are decided by the state while others must be detailed in the agreement.
A month-to-month rental lease is one that does not have a year-long clause for tenancy. Instead, the rental agreement is automatically renewed each month until either party follows the proper protocol to end the contract.
Benefits of Month-to-Month Leases
There are a number of reasons that landlords might prefer to use a month-to-month lease for a property instead of a standard, year-long lease. These are some of the most popular reasons:
- Greater flexibility
- Easy to implement policy and rent changes
- Can stop renting a property quickly if necessary
- Freedom to sell property quickly if needed
Drawbacks of Month-to-Month Leases
On the flip side, there are a few reasons why some landlords find this type of agreement to be a waste of time for their management priorities. These reasons include:
- Less security
- Harder to plan long-term
- Less notice when its ending
- More to manage month to month
Before you can prepare your month-to-month lease, you need to decide on the specific details about parts of the agreement. As the landlord, you can decide these on your own or you can negotiate them with your tenant if you prefer to do so.
Once you have decided the following information, you will have the majority of what you need to write the lease:
- Disclosures required by state and local governments
- Federally required disclosures (lead-based paint and asbestos)
- Security deposit amount
- Time-period for ending the lease
- Move-in checklist
- Payment date and amount
- Late fee
- Bounced check fee
- Pet fees
As mentioned, these are the main pieces of information that you need to prepare before you draft up a month-to-month lease. We will go through each of these sections in detail below so that you can understand why this information will help you have a better written lease.
Now that you have an idea of what kind of information should go into your lease, let’s talk about the specifics.
Your month-to-month lease should include all of the following sections:
- Location of property, parking, etc. affected by the lease
- Security deposit
- Terms of lease
- Tenant agreements
- General provisions
- Agreement signatures
We have a pdf of this form available here. Here’s what it looks like:
|Month to Month Lease Agreement|
As you can see in the lease example form above, every section conveys a large amount of information that you need to have the tenant agree to in order to ensure a secure, protected tenancy agreement between both parties.
While adjusting and fixing terms can happen as early as the second month of tenancy in this type of rental agreement, it’s always better to have a strong agreement from the very beginning.
Let’s break down each section of the lease template so that you can get a grasp of what you are asking for and why. With this information, you’ll be able to adjust the lease for any situations with ease.
The lease needs to include basic information such as the date, name, and address of the landlord, name and address of the tenant, property locations, and signatures. All of this information is relatively self-explanatory and will not be further expanded on today.
The deposit section of your lease should include the following information:
- How much money is received as a deposit
- What the deposit will be used for
- Where it will be kept, if required by law
- How interests will be paid, if required by law
- When it will be returned
The most important things to pay attention to here is that the security deposit section details how long you have to return the deposit to the tenant and what type of damages can be withheld from the deposit.
Many tenants will expect to get their deposit back in full and may be surprised when they do not receive the full amount back due to damages outside of normal wear-and-tear. For that reason, it’s important to include things that can be considered as damages when signing the agreement. This informs the tenant while also providing you with extra security.
Additionally, you should include a clear period of when the deposit will be returned by. In this example, 21 days is recommended. Most states allow for up to one month to return the deposit, but you will want to confirm your state requirements.
Terms of Lease
This section of the lease is dedicated to giving the clear state date to the tenancy. Depending on the circumstances of your lease, it may have a clear end date as well. The key is that the lease clearly shows the expected tenancy period.
In the case of a month-to-month lease, you only truly need to include a start date. Additionally, a clause that states the lease can end at any time with proper termination notice is sufficient. The required termination notice (usually 30 days) should also be disclosed in this section. This ensures that all parties are aware of the required notice period.
If the landlord or tenant does not want to renew the lease after a 30-day period, they must give at least 30 days notice.
Next, you’ll want to make sure the agreement states how much the rent will be and under what conditions it can be increased. Since you are working with a month-to-month lease, the rent can be changed at any time with one month’s notice. This information must be provided to the tenant upfront so that they do not refuse to agree to an increase.
The late fee that will be charged for late rent or bounced checks and when it will be enforced should also be included in this section.
Another important part of the rent section of the lease agreement is the information about where to pay the rent and by what method. For example, you can see in our example lease that there are options for paying by cash, check, or money order. With the tenant, you should determine which payment type is appropriate.
By deciding information about when and how the tenant will pay rent each month, it is more likely that you will be able to collect rent in a timely manner.
The possession section of the lease covers basic information about the possession of the property and what that entails according to your month-to-month lease agreement.
This section must include the following:
- When the tenant can move in
- Whether or not subletting is allowed
- How long guests may stay on the property per year
- Who is responsible for repairs
It is especially important to clearly state your policy on subletting and guests. There will be cases when a tenant tries to rent out their property to subletters without you knowing or invites a family member to move in.
While you might be amenable to these things with negotiation, it is your tenants’ responsibility to alert you to these changes, so clearly outlining your policy in the lease will help clear up potential miscommunications.
Repairs are one of those make-or-break items when it comes to renting. While you as a landlord are responsible for keeping the property in proper and livable condition, it is up to the tenant to repair any damages they cause to the property beyond normal wear and tear. Many tenants may disagree with that, so it should be included in the agreement.
The tenant agreement section of the lease is where you can cover any other areas that have not yet been addressed in the lease. For example, if you do not allow pets on the property, this section should include a clear statement that the tenant agrees to not keep pets on the property.
Other things that you should address in this section include:
- Utility distribution
- Pet disclosures
- Damages and noise rules
- Property rules
- Trash disposal rules
- Lock change rules
- Repair and improvement guidelines
This section is like a large security blanket. Any details that have been negotiated between your tenant and you in terms of pets, utilities, parking, noise, or other areas must be put in writing. This protects you in case the tenant breaks the lease or disagrees with you about the terms in the future.
If you do not have these terms in writing, you would find it difficult to argue your case in a court if necessary to evict the tenant or charge them for damages.
Finally, this section should mention how long a tenant has to resolve a lease breach before you will move to evict them from your property. This information is essential so that you can send out the proper notices to the tenant in accordance with your lease if there is a breach of contract at any point.
This final section of the lease is a more general contract section that seeks to protect you, the landlord, and your property from any insurance claims or other issues that may occur. Any issues related to liability should be outlined here.
If there is anything that you have not yet covered in the lease or that applies to every other section as well, this is where you would want to include it.
Everything in this section is referring to the overall state of the agreement and the tenancy between you and your tenant. It’s important to include these types of more generalized provisions so that this contract does not accidentally hold you liable for damages or claims that were caused by your tenant, not your property.
The last thing that you need to have on this lease agreement are signatures from you and your tenants. The signatures should always be accompanied by a phone number, printed name, date, and address of the signee.
It is required to have all of this information in order to make the contract legally binding. Without the proper signatures, the lease could be considered null and void, so this is something that you absolutely do not want to skip!
Once signed, a copy of the complete and signed lease should be given to the tenants and then kept on file by the landlord. Ensuring that both parties have a copy of the complete lease is just good business.
By using the template we have provided for a month-to-month agreement, you should find that putting together this type of rental doesn’t have to be overwhelming. Still, you want to understand what type of information you are gathering in each section to ensure that you do not leave any major gaps in the agreement.
One final note that we want to remind all landlords of is that there may be state or local restrictions on what you can and cannot include in a lease agreement. There may also be rules about how much security deposit you can collect, how rent must be paid, and more. As a landlord, it is your responsibility to be in-the-know about your local lease laws.
Even if you’re still learning the ins and outs of how to write a great month-to-month lease, don’t let yourself worry too much. You now have the tools that you need to create a strong lease that works for all of your properties.