Tenants and landlords who want flexibility in renting agreements must first understand what is a month-to-month lease. A month-to-month lease enables renters to rent without a lengthy commitment, unlike fixed-term leases. Proper notice allows landlords to alter conditions or terminate the lease. 

If short-term accommodation is needed, this lease allows tenants to have freedom in the rented area. It also allows landlords to react fast to growth in the market. 

In this article, we will also go over the pros and cons of a month-to-month lease, define what month-to-month tenancy means, and address frequently asked questions like what a monthly rental agreement covers and whether landlords may increase rent with short or no notice. Join us now!

Month-to-month agreements can be verbal, though written forms help clarify rent, deposits, and notice periods.

What Is a Month-to-Month Lease?

Then, what is a month-to-month lease? A month-to-month lease is a rental arrangement broken out one month at a time. It renews every month automatically unless either the tenant or the landlord gives appropriate written notice based on state laws to stop it.

Unlike fixed-term leases, which bind both sides for a certain period (often six or twelve months), a month-to-month lease gives flexibility to amend or terminate the arrangement with short notice. Sometimes, this kind of contract is known as a month-to-month tenancy or a rent arrangement.

Tenants who want to avoid lengthy commitments and landlords who like to change rent or terms depending on market circumstances rapidly find great popularity in this lease.

How Does a Month-to-Month Lease Work?

A month-to-month lease works by renewing automatically each month. Here's how it generally functions:

  • Signing the Lease: Tenants and landlords both sign a monthly rental agreement that includes rent, conditions, and notice periods.
  • Rent Payments: Tenants often pay their rent on the first day of the month.
  • Automatic Renewal: The lease renews every month unless notice is given.
  • Termination: Either side can end the lease by giving written notice or a proper termination letter, usually 30 days before moving out, or calling off the contract.
  • Rent Adjustments: Landlords may increase rent or adjust conditions with sufficient written notice, usually 30 to 60 days.

If a renter wishes to leave on July 1, for instance, they have to tell the landlord before June 1. Likewise, depending on local policies, the landlord has to inform the tenant by June 1 or July 1 if they want to raise rent beginning August 1.

Pros and Cons of a Month-to-Month Lease

For Tenants

Pros

Cons
  • Flexibility: Tenants can move out quickly without penalty, making it ideal for those with uncertain plans.
  • No Long-Term Commitment: Avoids being locked into a lease if life circumstances change.
  • Good for Short-Term Housing: Perfect for people between homes, on temporary work assignments, or testing a new area.
  • Less Stability: The landlord can also end the lease with proper notice, so tenants may face unexpected moves.
  • Rent Increases: Rent can be raised more frequently than in fixed-term leases.
  • Fewer Discounts: Landlords may charge higher rent for month-to-month leases due to the flexibility offered.

For Landlords

Pros

Cons
  • Control Over Terms: Landlords can adjust rent or other lease terms with proper notice.
  • Easier Tenant Removal: Landlords can end the lease with notice if tenants violate terms or if the property needs to be sold or renovated.
  • Attracts More Tenants: Flexible leases appeal to renters who need short-term housing.
  • Higher Turnover: More frequent tenant changes can increase vacancy rates.
  • Unpredictable Income: No long-term guarantee of rental income.
  • More Administrative Work: Frequent lease renewals and notices require more management.

What Is a Month-to-Month Tenancy? Key Differences from Fixed-Term Leases

A month-to-month landlord can raise rent every 30 days, unless local rent-control ordinances cap increases.

A month-to-month tenancy (also called periodic tenancy) runs in monthly cycles. In contrast, a fixed-term lease locks both sides for a set period, like 12 months. Here are some other key differences:

  • End Date: None vs. definite term.
  • Renewal: Automatic monthly vs. new lease.
  • Termination Notice: Often 30 days vs. possible lease-break fees

With a fixed term, you risk penalties for early exit. With a month-to-month, you gain flexibility but sacrifice long-term security. To understand the differences, you can take a quick glance at this table:

Key features

Month-to-Month Lease

Fixed-Term Lease

Duration

Renewals every month

Fixed period (for instance, 12 months)

Termination

30 days' notice usually

Ends at lease expiration

Rent Changes

Allowed with notice

Fixed until lease ends

Flexibility

High

Low

Stability

Less

More

What Is a Month-to-Month Lease and Tenancy Different From?

  • A month-to-month lease is a written agreement that renews on a month-to-month basis. It sets the rules, rent, and notice needed to end the lease.
  • A month-to-month tenancy is the actual rental situation where the tenant lives in the property month-by-month under that lease.

In short, the lease is the contract, and the tenancy is the ongoing rental. Both offer flexibility but less stability than fixed-term leases.

Minimum Term for a Month-to-Month Lease: Is There a Set Duration?

A month-to-month rent agreement usually has no minimum term. It starts when both parties sign and continues until either gives notice to end it. Some fixed-term leases automatically convert to month-to-month leases after the term ends unless renewed. Therefore, always check local or state legislation since it may influence minimum stays or notice times.

Monthly Rental Contract: What’s Included in a Month-to-Month Lease?

A monthly rental contract should clearly state:

  • Rent amount and due date.
  • Security deposit details.
  • Notice period required to end the lease.
  • Rules about pets, guests, and smoking.
  • Maintenance responsibilities.
  • How rent increases will be handled.

Both the landlord and the tenant should sign the contract to make it legally binding.

Rent Increases in Month-to-Month Leases: What You Need to Know

Tenant’s failure to pay rent allows landlords to issue a three-day “pay or quit” notice, even in month-to-month setups.

Landlords may increase rent on a month-to-month agreement, although they have several restrictions: 

  • Usually, they have to let tenants know in writing before increasing the rent. Where you live will determine how long this notice period typically runs, around 30 to 60 days.
  • Rent increases have to be fair and comply with local laws. Rent control policies in certain states or cities restrict the amount or frequency with which landlords may increase rent. For instance, in certain areas, rent may only rise by a small proportion annually.

Tenants are able to walk out with suitable notice or accept the higher rent, depending on how unexpected or too significant the rent increase is. Understanding these rules enables renters and landlords to prevent disputes or misinterpretations.

When Should You Consider a Month-to-Month Lease?

Under some circumstances, both tenants and landlords might find a good option in a month-to-month lease.

  • For renters: If you want to move soon, for a job or school, it's fantastic as it lets you live in a new area before making a long-term commitment. For individuals in temporary circumstances, like students or those prepared to purchase a house, this lease type is also great.
  • For landlords: A month-to-month lease allows landlords to modify fees or lease terms more regularly, therefore helping them to keep current with the market. If you plan to sell or modify your property soon, it might be advantageous even if you can end the lease with short notice. 

Keep in mind that tenants may face rent increases or need to move quickly, while landlords might have more tenant turnover and less stable income. 

How to Transition from a Fixed-Term Lease to a Month-to-Month Lease

Knowing what a month-to-month lease is will help you to understand the fundamentals of this kind of lease and its main advantages or drawbacks. Next, here are some advised actions you might review if you are thinking about switching from a fixed-term lease to a month-to-month lease:  

  • Step 1: Review your current lease for renewal or conversion clauses.
  • Step 2: Discuss the change with your landlord or tenant.
  • Step 3: Sign a new month-to-month rent agreement or add an essential lease addendum.
  • Step 4: Adjust rent or rules as needed with proper notice.

Final Thoughts

Knowing "What is a month-to-month lease?" deeply, for tenants as much as for landlords, is really important. Although a month-to-month lease gives freedom and flexibility, it comes with trade-offs like less stability and maybe rent hikes. It fits owners seeking control over rental arrangements and renters seeking temporary accommodation. LeaseRunner can accommodate both month-to-month leases and fixed-term leases. 

All in all, you must understand your rights and responsibilities before signing. Clear, documented monthly rentals and open communication help to prevent misunderstandings. Visit our LeaseRunner blog anytime if you like additional information on this topic.

FAQs

Q1. What notice is required to end a month-to-month lease?

Most states provide for a 30-day written notice before ending a month-to-month lease. The tenant or landlord has to let the other side know 30 days before leaving or ending the lease. Some other states, especially if the tenant has lived there for a significant length of time, call for a 60-day notice.

Q2. Can rent be increased on a month-to-month lease?

The answer is indeed yes. Rent may be raised by landlords on a month-to-month lease; however, they have to first provide written notice. Local guidelines can call for a 30 to 60-day notice period. Rent rises have to be fair and comply with local rent control policies.

Q3. What is the rental agreement minimum term?

The minimum term depends on the lease type and local laws. Usually lasting six or twelve months, fixed-term leases contain a minimum length during which renters must remain or pay penalties. Month-to-month leases run monthly until notice is provided; they have no set minimum duration.

Q4. Can I switch from a fixed-term lease to month-to-month?

Yes, it is feasible to swap if both the renter and the landlord agree. In many cases, if no new lease is signed, fixed leases automatically transform to month-to-month once the term finishes. Alternatively, both sides can decide to add an addendum or sign a month-to-month agreement instead of agreeing to terminate the fixed lease early.