Although most people own homes, some of them usually opt to lease different apartments and flats. For instance, if you work far from your home, you can opt to lease an apartment or a house near your workplace so that you can have an easier time accessing your workplace. Although some leases can be long-term, some of them are on a short-term basis. A good example is a month-to-month rental agreement. As the name suggests, this lease is applicable for people who want to lease an apartment or a home for just 30 days. Unlike a long-term lease, this one has to be renewed each and every month. However, if the tenant or landlord provides notice of nonrenewal, it will not be renewed. In this article, we shall take a close look at how you can fill out a month-to-month rental agreement, among other facets.
What Is A Month-to-month Rental Agreement?
Like we mentioned above, the above-mentioned rental agreement lasts for a period of 30 days. Once this period is over, one can choose to renew it or not. Besides this, most month-to-month rental agreements require the tenant to give a 30-day notice whenever he or she wants to terminate the lease. The same applies to landlords. However, this might vary based on the laws that govern a particular region or state.
Unlike other kinds of leases, this one does not have a specified set end date. Therefore, it can go on if the tenant wants to continue leasing the apartment or home for a period beyond 30 days. However, the tenant has to renew the rental agreement after every 30 days.
Most people prefer the above-mentioned kind of lease agreement when they do not want to commit to a long-term or fixed-term lease. As a result, it gives you more flexibility in case you have been transferred from your current workstation to a different one located in a different region. It is, therefore, a lifesaver for people who have to work in different regions at different times of the year.
How It Month To Month Rental Agreement Works?
Since a month-to-month rental agreement lasts for 30 days, one has to renew the rental agreement after this period. For the landlord, it means that he or she has about 30 days before his house or apartment becomes vacant. However, if the tenant wants to extend his stay in the house or apartment, he has to renew the lease. Here is the procedure for getting started:
1. Filling the rental application
When one wants to lease a house or an apartment, the tenant has to fill a rental application first. This document gathers a number of details such as:
- Personal details.
- Financial details
- Employment information, in case the tenant is employed.
- Previous rental history
The document might also ask if the tenant accepts that a background check is done to determine his or her eligibility to become a tenant there. Also, the document might ask the tenant whether he or she has ever committed certain crimes or not.
If you have ever committed a crime, the landlord might be hesitant to allow you to rent his apartment. There is also an application fee that the tenant should pay once he or she submits the rent application form. This fee caters to activities such as background checks and other activities that can help verify whether the tenant gave the right information or not.
2. The rental unit is shown
There are instances where the rental unit is shown to the tenant before signing the rental application form. However, there are other instances where the rental unit is showed after the rental application is completed. It all depends on how you agree with your landlord. Once the tenant has seen the rental unit, the lessee can either choose to carry on with the entire process or to quit altogether.
3. Payment of security deposit
If you are pleased with the unit, you will go ahead and pay the security deposit and the advance rent for that month. Most landlords ask for a security deposit in order to cater for any damages that might take place in the building or apartment during the lease period. Sometimes, this amount is equivalent to a single month’s rent, while in order scenarios, it is equivalent to one and half month’s rent of that premise. It all depends on the apartment you choose to lease. If you have a pet, you might be required to pay a pet deposit. Once you pay the deposits, you will be given a receipt for each deposit that you have paid.
4. Creation of lease and disclosures
The above-mentioned documents are usually created by the landlord once the tenant has paid the necessary deposits. Since the tenant wants to lease the property for one month, the landlord will create a month-to-month lease and then attach some disclosures needed by both federal and state law.
5. Reviewing of the terms of both the lease and disclosure forms
Once the landlord has created these forms, the tenant should now review the terms indicated on the forms. By doing this, you will know your obligation as a tenant. Also, you will know the rights of your landlord. Since different states have different laws, some clauses might not be similar.
6. Execution of the month-to-month lease
At this stage, both parties are now ready to execute the above-mentioned lease agreement. First, both parties will sign to show that they have accepted all the terms and conditions stipulated in the document and then go ahead to implement what is stated in it. It is at this stage that the tenant is given the keys to the rental unit and can now start his or her lease.
If any party wishes to terminate the lease, each of these parties has to do so in accordance with the laws of the land. Also, it should be according to the terms stipulated in the lease contract. Some countries usually require one to give a 90-day notice while others require you to give a 30-day notice. Depending on your state, different laws apply.
Frequently Asked Questions (FAQ)
What happens when a lease goes month to month?
If this happens, the tenant has to renew the lease in case he or she prefers to extend his stay at the leased home or apartment. Better still, he can choose to move from the apartment and consider looking for a better one and sign a new lease. If the landlord and the tenant sign a new lease, there might be a few terms of the lease that might change, and rent might be increased. It all depends on what the tenant and the landlord agree on.
Are month to month leases bad?
No. The good news is that this kind of lease agreement gives the tenant more flexibility and also allows him or her to save a few bucks. However, if you fail to give the landlord a notice of 30 days, you might face penalties which can hurt your budget in the long run. As long as you abide by the lease agreement, you will not have issues like those mentioned above.
On the other hand, landlords who rent on a month-to-month basis hardly invest more time in maintaining their properties. As a result, such properties might incur more damages, in the long run, thereby affecting the comfort of the lessee. However, since the tenant has more flexibility, it might be convenient for him or her, at least for the short term.
How Do I Make A Month To Month Contract?
If you want to make a month-to-month contract, there are several steps that you should follow. They include:
1. Fill in the details of the landlord, tenant, and the rental property
The first step in creating a month-to-month contract is to fill in the details of the landlord, tenant, and the address of the rental property. Some properties are usually manned or managed by agents. If this is the case, the name of the agent should be included in the document.
Besides this, everyone who lives in the rental unit should be listed. As far as the rental unit’s address is concerned, some of the vital details that should be included include the zip code, city, state, and even county.
2. Include the Terms of the lease
Since you want to lease the rental unit for one month, the landlord should provide the lease date and when it all begins. It is essential to indicate that it is a month-to-month lease. Apart from this, the landlord should include the amount of notice needed for one to terminate the lease agreement.
3. Include the monthly payments
Here, you should include the amount of money the tenant ought to buy on a monthly basis. The due date for the rent should also be included. Besides this, you should include how the rent should be paid. If you intend to charge a fee for late payment of rent, you should include that clause as well. This way, the tenant will know what happens and how much he will be charged in case he pays the rent later than the agreed date.
4. Include information about the security deposit
Besides the information mentioned above, you should also include details about the security deposit that was paid by the tenant. Apart from including details of the security deposit, the landlord should include the reason for the security deposit. One of those reasons could be to cover certain damages.
5. What happens in case the tenant defaults on his monthly rent payment
There are instances when the tenant can fail to pay his or her monthly rent. If this happens, the consequences of such actions should be well stipulated in the month-to-month agreement. Ideally, it should indicate how much notice the landlord should provide to the tenant in order to cure the default.
6. The utilities that the tenant should pay
There are certain utilities and services that the tenant should pay. A good example includes water, electricity and so forth. Also, those utilities that the landlord should pay are well stipulated in the document.
7. Whether pets are allowed or not
There should be a clause that says whether pets are allowed or not. In case pets are allowed, there should be more information about the kind of pets that are allowed here and if there are any weight restrictions. Also, details about pet deposits should be included here as well.
8. A clause explaining other terms and conditions
Besides the details mentioned above, there are other terms and conditions that might be included here. A good example is a clause about parking. This is because some properties usually have assigned parking. If the tenant has assigned parking, this clause will explain more about it. Besides parking, the clause can include something about noise pollution. For instance, it can indicate the hours the tenant is not allowed to make excessive noise while in his or her rental unit.
9. Dated signature from both the tenant and the landlord
Finally, the document should include the dated signature from both parties. Here, they should include their signatures and the date when the month-to-month lease has commenced.
What is the difference between month to month and lease?
The main difference between a month-to-month and a lease is the duration of the tenancy. In most cases, the month-to-month rental agreement is basically for a period of 30 days. Such agreements can be renewed after 30 days are over. On the other hand, a lease can be long-term as it can be 6 months or even 12 months.
If you do not intend to lease a home or a rental unit for long, you can lease it for only one month. After 30 days are over, you can opt to renew your lease or better still, move out. As you do this, you should fill in a month-to-month agreement form for formality reasons. Note all the ideas we have mentioned above, and you will enjoy your month-to-month tenancy.