Month-to-Month Rental Agreement Template

A month-to-month rental (lease) agreement outlines a formal relationship between a property owner and a tenant to rent residential property on a month-to-month basis. It creates a tenancy at will with an undetermined end date.

A month-to-month rental contract usually requires either party to provide 30 days’ notice before terminating. This requirement distinguishes it from a fixed-term lease, which expires at the end of a defined period (such as six months, nine months, one year, etc.). Both parties usually can’t terminate a fixed-term lease early without consequences.

By State

How a Month-to-Month Lease Works

Step 1 – Request Information from the Tenant

Request information from the tenant via a rental application to ensure they’re a good candidate for renting your property. Use an employment verification letter to learn an individual’s current or past employment status before committing to a month-to-month lease with them.

You can also ask them to complete a background check authorization form, allowing you to conduct a background check on them without legal repercussions. You may collect a fee from the tenant to conduct this check. Some websites to use for conducting background checks include the following:

• RentPrep
• MySmartMove
• RentSpree

Step 2 – Negotiate the Terms

Once you confirm the tenant is a suitable candidate, you can start negotiating the terms of the month-to-month lease, such as the following:

• Monthly rent amount
• Services and utilities
• Security deposit
• Rent prepayment terms
• Fees for parking, pets, etc.
• Termination procedures

Step 3 – Write the Lease

Use the verbal negotiations with the tenant to write a formal month-to-month lease. Please abide by all legal requirements, including local housing laws and habitability standards.

Depending on where you live, you may have to include specific disclosures. For example, 42 US Code § 4852d requires landlords in all states to provide a lead-based paint disclosure statement if the housing was built before 1978. Furthermore, the following states require landlords to provide a rental inspection checklist to the tenant upon move-in:

Step 4 – Sign the Lease and Enforce the Terms

Have both parties sign the lease once they’re content with its terms. Allow the tenancy to begin on the date the agreement indicates and enforce all terms. Let the lease renew monthly for an undefined period until either party wishes to terminate.

Step 5 – Navigate Changes

A month-to-month lease continues indefinitely, so you must navigate changes properly to remain in compliance with state and city laws and maintain a good relationship with your tenant.

For example, suppose you have a tenant who’s been on a month-to-month lease with you for longer than anticipated. If you need to raise their rent to keep up with market conditions, you can’t do so randomly without informing them. You must provide proper notice to comply with regulations. Use a notice of rent increase and abide by the notice period requirements in your area.

Step 6 – Terminate the Lease

Unlike a standard fixed-term lease (e.g., a one-year lease), a month-to-month rental agreement automatically renews at the end of each rent payment period unless either party decides to terminate the tenancy.

Notice Requirements

• Both tenants and landlords must provide a specific amount of notice before terminating a month-to-month lease.
• The required notice period may vary based on the laws in your area, typically ranging from 7 to 90 days.
• The standard notice period is usually 30 days.

Example

• If a 30-day notice is given, the month-to-month tenancy will end at the conclusion of the next full monthly term.

Make sure to check the specific legal requirements in your area to ensure compliance with the appropriate notice period.

Step 7 – Prepare the Unit for a New Tenant

After terminating a month-to-month lease, you can prepare the unit for a new tenant. Complete a move-out inspection, checking for signs of damage versus normal wear and tear to determine if you must return the old tenant’s security deposit. Perform a deep cleaning and address any maintenance issues.

Advertise the unit and find a new tenant willing to rent on a month-to-month basis. From here, you can start the process over again.

What If I Want to Convert a Fixed-Term Lease into a Month-to-Month Lease?

A fixed lease may convert into a month-to-month lease under certain circumstances:

• Option 1: The fixed-term lease provides that it will convert to a month-to-month arrangement automatically upon its expiration.
• Option 2: The fixed-term lease provides that it will convert to a month-to-month arrangement if the parties don’t agree upon a new fixed-term lease when the current one ends.
• Option 3: If the tenant remains in the rental unit after the fixed-term lease expires and doesn’t sign a new lease, there may be an implied month-to-month arrangement if the landlord keeps accepting rent payments and lets the tenant continue occupying the property.
• Option 4: The tenant and landlord use a month-to-month lease addendum to mutually convert a fixed-term lease into a month-to-month one.

Pros and Cons of Month-to-Month Lease Agreements

Explore the pros and cons of month-to-month lease agreements for landlords:

Pros for Landlords

• More Flexibility: Landlords can adjust the lease terms or increase the rent if these changes are consistent with state and local laws. Because they only need to provide relatively short notice, they can more easily respond to market conditions.
• Short-Term Commitments: Landlords won’t have to commit to long-term arrangements when they use month-to-month leases, so they can regain possession of the property when necessary.
• Termination without Cause: Since month-to-month tenancy is often considered at will, the landlord can terminate it without cause as long as they provide the proper legal notice. This benefit lets them remove problematic tenants or terminate the lease if they want to perform renovations or sell the property.
• Higher Rent Potential: Landlords might be able to charge higher rent because of the convenience and flexibility that month-to-month leases offer tenants.

Cons for Landlords

• Higher Vacancy Risk: Landlords may face a higher risk of frequent tenant turnover, which can cause more vacancy periods.
• Uncertain Income: Landlords may experience uncertain or inconsistent income when a tenant suddenly departs.
• More Administrative Work: Housing more tenants over a specific period may result in more administrative work, including reviewing tenant applications and writing leases.
• Higher Fees: Landlords may have to pay fees to clean the rental unit and advertise it every time a tenant moves out. These costs may add up over time.

How to Write a Month-to-Month Rental Agreement

Step 1 – Fill in Landlord and Tenant Information

1. Landlord. Provide the landlord’s full name or company name, depending on whether the landlord is an individual or an entity.

2. Tenant. Write the tenant’s full name or company name, depending on whether the tenant is an individual or an entity. If there is more than one tenant, enter the name of each additional tenant.

Step 2 – Enter Premises Details

3. Premises. Describe the rental. Specify the type of residential property being rented, such as an apartment or a house. You can write one in if none of the options provided describe the property type.

Please provide the number of bedrooms, bathrooms, and parking spaces (if parking is included with the property). Also, please provide the property’s street (physical) address, including the apartment/unit number (if applicable), city, state, and zip code.

4. Storage. Specify whether the rental property includes any storage space. If yes, describe the storage space.

5. Furnishings. State whether the rental property will include any furnishings. If yes, provide a list of the furnishings included with the rental.

6. Additional Description. If any additional information would help describe the property, include it here.

Step 3 – Write Term Date

7. Term. Provide the start date of the lease.

Step 4 – Fill in Rent Information

8. Rent. Specify the dollar amount of the monthly rent payment, the day it is due (e.g., the 5th day of the month), and the payment method.

9. Proration. State whether the rent for less than one month will be prorated.

10. Bounced Check. Write the amount the landlord will charge for any bounced checks.

Step 5 – Check Guaranty Option

11. Guaranty. Specify whether a guarantor is required for the tenant under this lease. If yes, provide the guarantor’s full name and address.

Step 6 – Note Late Fee Option

12. Late Fee. State whether a late fee will be charged if the rent is not paid on time. If yes, specify the day of the month the rent will be considered delinquent and the number of days for any grace period.

If a late fee is assessed, select whether it will be a set dollar amount (including the amount) or a percentage amount.

Step 7 – Check Utilities

13. Utilities. Note if the landlord will be responsible for any utilities and indicate which. (Typically, the tenant is responsible for all utilities.)

Step 8 – Write Security Deposit Details

14. Security Deposit. Provide the dollar amount of the security deposit to be paid by the tenant to the landlord.

Enter the number of days after the end of this agreement that the landlord will return the security deposit (less any amounts under this section) to the tenant.

Specify whether the security deposit will be held in an interest-bearing account.

*Note that most states have laws regarding security deposits, the amount, where they’re saved, how they can be used, and when they must be returned to the tenant.

Step 9 – Fill in Use of Premises Information

15. Use. The tenant and the tenant’s immediate family will use the property for residential purposes. In addition, the tenant is responsible for any damage caused to the property by their guests. Write any additional guest or visitor policy.

Step 10 – Write Conditions of the Premises

16. Condition. The tenant agrees to the current condition of the appliances, fixtures, and furnishings (if applicable) other than any exceptions to be added here.

Step 11 – Note Maintenance and Repair Policies

17. Maintenance and Repairs. The tenant agrees to maintain the property and not remove any appliances, fixtures, and furnishings (if applicable). If the property has an outside area or grounds, the tenant also agrees to maintain those.

Step 12 – Check Rules and Regulations Option

18. Rules and Regulations. Specify whether there are separate rules and regulations for the rental property. If there are, a sample “Exhibit A – Rules and Regulations” is included at the end of this agreement for your reference.

Step 13 – Choose the Military Clause Option

19. Military Clause. State whether the tenant may terminate the lease agreement early for activity duty in the US Armed Forces.

Step 14 – Check the Smoking Option

20. Smoking. Note whether smoking is permitted on the property.

Step 15 – Choose the Pet Option

21. Pets. Explain whether tenants are allowed to keep pets on the property. If yes, specify the type of pet(s) and the amount of any pet deposit.

Step 16 – Check Inspection Checklist Option

22. Inspection Checklist. Specify whether the tenant must complete an Inspection Checklist at the time of move-in.

If yes, a sample “Exhibit B – Rental Inspection Checklist” is included at the end of this agreement.

Step 17 – Note Renter’s Insurance Option

23. Renter’s Insurance. State whether the tenant is required to obtain a renter’s insurance policy.

If yes, the policy must have at least $100,000 of personal liability coverage, and the landlord must be named as an interested party or additional insured.

Step 18 – Choose the Assignment and Subletting Option

24. Assignment and Subletting. Write whether the tenant can assign or sublease any part of the property.

If allowed, specify whether the tenant must obtain the landlord’s written consent to assign or sublease.

Step 19 – Fill in Default Details

25. Default. In the event of default (other than failure to pay rent), the landlord may give the tenant notice and the opportunity to correct the default.

Provide the number of days the tenant has to correct the default. If the default is the tenant’s failure to pay rent, specify the number of days after receipt of the landlord’s notice that the landlord can terminate this agreement.

*Note that most states have laws regarding the amount of notice a landlord must give a tenant for failure to pay rent or other violations of lease terms.

Step 20 – Check Lead Disclosure Option

26. Lead Disclosure. If the property was built before 1978, the landlord must disclose whether it contains known lead-based paint or lead-based paint hazards.

A “Disclosure of Information on Lead-Based Paint or Lead-Based Paint Hazards” is included at the end of this agreement for your reference.

Step 21 – Write Notice Information

27. Notices. All notices must be in writing. Enter the address where the notices should be sent to the landlord and tenant.

Step 22 – Enter Governing Law State

28. State Law. Fill in the state’s laws that will govern the construction of this agreement.

Step 23 – Choose Disputes Option

29. Disputes. If there is a dispute, specify whether the dispute will be resolved through court litigation, binding arbitration, mediation, or mediation then arbitration.

Step 24 – Note Miscellaneous Details

30. Miscellaneous. Provide for any other provisions not already included in this agreement.

Month-to-Month Rental Agreement Sample

Below, you can see what a month-to-month rental lease agreement typically looks like:

Download: PDF / Word