What Is a Month-to-Month Tenancy?
A month-to-month tenancy is a periodic tenancy created when the renter is granted possession of the property with no definite expiration date and pays the owner on a monthly basis. This tenancy is most commonly found in residential leases. In situations where there is no written agreement, tenancy is also considered to be on a month-to-month basis.
- Month-to-month tenancy is a periodic tenancy wherein the tenant rents from the owner on a monthly basis.
- This type of tenancy is most commonly found in residential leases.
- Other variations of tenancies found in lease contracts include tenancy for years, tenancy at will, and tenancy at sufferance.
How a Month-to-Month Tenancy Works
Tenancy falls under the real estate laws that cover leases. In legal real estate terminology, a lease is a contract between the owner of a property, also known as the landlord, and a tenant, who rents the property. The lease transfers the owner’s rights to the exclusive possession and use of the property to the tenant for an agreed-upon period.
As anyone who has rented an apartment knows, the lease sets forth the period of time for which the contract is to run and the amount of rent the tenant is contracted to pay. The renter gains access to the property and uses it in whatever manner was agreed upon in the lease. The landlord receives rent for a specified period of time, and after the lease period is up their ownership rights are returned.
Control over the end date of the tenancy
Peace of mind
Moving out or replacing a tenant on short notice
Higher rents/less predictable income
Pros and Cons of a Month-to-Month Tenancy
Whether a month-to-month tenancy is advantageous or disadvantageous depends, in part, on a renter's or landlord's desire for flexibility and ability to respond quickly to changing circumstances.
- Control over the end date—Renters are not tied down to a long-term lease and can choose to leave with relative impunity, with a maximum of 30 days' notice. Landlords can choose to end the arrangement with the same impunity, giving them greater control of their property.
- Financial fluidity—Landlords can change the rental amount every month if they wish. Renters can take advantage of a better offer elsewhere in quick fashion.
- Peace of mind—Renters are not stuck having to break a lease or find a sublessee in the event they want to move, either of which could happen if they leave before a long-term lease expires. Landlords can get rid of bad tenants much more easily than with a long-term lease.
- Moving out or replacing a tenant on short notice—Landlords can be stuck with an empty property on short notice. Renters can be forced to find new lodgings on the same short notice.
- Higher rents/less predictable income—Renters generally pay higher rents than with long-term leases, because of the possibility of sudden vacancies that can’t be immediately filled. Landlords can suffer from less predictable income than they would be afforded by a long-term lease.
- Uncertainty—Renters cannot be sure of their tenancy beyond the span of one month and so must have a quick move plan always in place. Landlords cannot be sure of a steady supply of tenants willing to live with the instability of a month-to-month tenancy.
Month-to-month tenancy falls under the real estate laws that cover leases.
Different Types of Tenancy
Within the lease contract, the tenant’s legal right to possess the property is deemed the leasehold estate—or tenancy. Depending upon the contract’s language, the following four different tenancies can be established:
Tenancy for years (aka tenancy for term)
This establishes a possession for the tenant that will last for a fixed time period, which could range from days to years. It has a specific starting and ending date, with the latter signifying the expiration of the renter’s tenancy.
This is established when the renter’s possession is contracted for an indefinite period, with no agreed-upon expiration date. The tenancy is originally created for a specific period, but the renter’s tenancy can continue until there is some notification of the lease’s termination. Under the terms of the lease, the contract is automatically renewable until the owner or renter gives a notice to terminate.
Tenancy at will
A tenancy at will gives the renter the right to use the property for an unspecified period. The tenancy continues until the owner or renter gives notice of termination. In the event of either party’s death, the tenancy is terminated.
Tenancy at sufferance
A tenancy at sufferance occurs when the renter, who at one time had established a contractual tenancy, continues to remain in the property without the owner’s consent. This can occur when the renter does not surrender the property after the initial expiration date written into the lease. It usually leads to eviction proceedings being instituted by the owner. If, however, the landlord accepts a rent payment after the lease expiration date, the property is considered to be leased again, but now on a month-to-month basis.