How to write a Month-to-Month Rental Agreement

A Month-to-Month Rental Agreement is a written agreement between a landlord and a tenant establishing the rights and responsibilities of each party. The landlord is the owner of real estate who rents that property to a tenant. A "residential" lease applies to real estate used as a place to live, while a "commercial" lease applies to business property.    

A written lease can be prepared and signed whenever property is rented to reduce the likelihood of misunderstandings between the tenant and landlord regarding the rental arrangement. One of the many issues that are defined in a lease is the lease term. Leases often have a set duration, such as one year. However, some leases are month-to-month, and automatically renew each month unless either the landlord or tenant provides notice that they are terminating the lease. 

The details of many lease provisions, such as security deposits and specific disclosures, are tied to state laws, so it’s important to check in with a lawyer to make sure your lease complies with state and local requirements. Here are some terms to watch for when you are preparing your own Month-to-Month Rental Agreement:

Effective Date of the Lease

All parties involved should have a clear understanding of the exact date that the lease comes into effect. This is often the date that the lease is signed, but this is not always the case. The date that the lease comes into effect can influence payment terms and dates and other provisions provided in the lease. 

Access to Premises

A lease should generally allow the landlord to have access to the premises for necessary purposes, like making repairs or showing the premises to prospective tenants. Many states require that the landlord must provide either one or two days, or "reasonable" advance notice to the tenant, unless there is an emergency. 

Amount of Rent

Unless the property is subject to rent control laws, there are no restrictions on the amount of rent charged. Certain cities in California, the District of Columbia, Maryland, New Jersey, and New York, however, do have rent control laws. 

Security Deposit

A security deposit is an amount of money given to the landlord by the tenant that can be used by the landlord for several reasons, including: (a) to make up for a tenant's failure to pay rent, (b) to make up for rent if a tenant leaves the property before the end of the lease term, or (c) for necessary repairs and cleaning. Most states limit the amount that can be collected to one or two months' rent. This cap may differ depending on factors like whether or not the property is furnished or if the tenant will have a pet, etc.  

In addition, some states require that the security deposit be held in a separate account and sometimes in an interest-bearing account. A few states require that the landlord inform the tenant of the name of the banking institution where the funds will be held.  

A landlord may not want to accept a personal check for the security deposit or the first month's rent. The reason is that once the tenant moves in (even if the tenant only moves in a few things), the landlord must go through the expensive and time-consuming eviction process to have the tenant involuntarily removed. If the tenant's security deposit check bounces, the landlord has nothing with which to offset these costs.

Default

State laws vary widely regarding the number of days that a tenant will have to correct (or cure) a default after receiving notice of such default from the Landlord. Furthermore, some states provide different periods to cure depending on the type of default, distinguishing between the failure to pay rent on time and all other defaults. For example, a landlord may be entitled to repossess an apartment seven (7) days after notifying the tenant about missing a rent payment, but may have to wait 30 days if the complaint involves the tenant's failure to keep the premises clean. It is highly advisable that you check with your local housing authority about the length of time that must pass before taking steps to regain possession after serving any notice of default. 

Casualty Insurance

Casualty Insurance is liability coverage against loss of property, damage, or negligent acts or omissions. Either party can be assigned the responsibility to obtain and pay for casualty insurance on the property and its contents. In residential leases where the tenant occupies only one apartment in the building, it is common for the landlord to insure the building and the tenant to insure his or her belongings (if desired). If the tenant occupies an entire building, however, the tenant may be required to maintain the insurance coverage at levels specified by the landlord and to name the landlord as an "additional insured." In any event where the tenant must supply the insurance, the landlord should be provided with proof of insurance and a commitment from the insurance company to notify the landlord prior to any lapse of coverage. 

Disclosure of Lead Paint

Federal regulations require that landlords who lease residential property built prior to 1978 must disclose to the potential tenant any information known to the landlord about lead paint hazards on the property. The landlord must also give the potential tenant the Environmental Protection Agency's (EPA) pamphlet entitled "Protect Your Family From Lead In Your Home." 

Some types of rental property are exempt from this rule. These include short-term leases (less than 100 days), renewals of leases for which disclosure has already occurred, and leases of housing previously inspected and found to be free from lead-based paint. Because the purpose of the rule is to protect children from exposure to lead, the rule also does not apply to leases of housing for the elderly (unless children under six are expected to reside there), or properties in which the living area is not separated from the sleeping area (for example, efficiencies, lofts and dormitories).  

It is important to note that this regulation does not require the landlord to have the property inspected, but only to disclose any information already known.  

Our lease provides the required disclosure form at the end of this document regarding the landlord's knowledge of lead paint hazards on the property. In addition to this disclosure form, the landlord must provide the potential tenant with the EPA pamphlet described above. This pamphlet may be obtained by contacting the National Lead Information Clearinghouse (NLIC) using any of the following methods: 

• PHONE: 1-(800)-424-LEAD  
• FAX: 1-(301)-585-7976  
• WEBSITE: www.epa.gov 

Bulk copies of the pamphlet may be ordered from the Government Printing Office by phoning 1-(202)-512-1800.  The stock number is 055-000-00507-9 for pamphlets printed in English and 055-000-00537-1 for pamphlets printed in Spanish. In addition, the pamphlets may be photocopied for distribution, as long as the text and graphics are not altered in any way.  

The disclosure statement and EPA pamphlet must be provided to each potential tenant and each renewing tenant, but not to existing tenants. In fact, these obligations also apply to tenants who are subletting part of the property to others. Landlords (and qualifying tenants) who fail to comply with this regulation can face civil and criminal penalties including, potentially, triple damages.   

The landlord, tenant and any agent involved in the lease are required to sign the acknowledgment at the end of the disclosure form. The Federal regulations require that the landlord must keep the signed acknowledgment form for at least three (3) years as proof of compliance with the rules. 

Note that other disclosures may be required under applicable state laws. Landlords may consult with a Rocket Lawyer network attorney to confirm which disclosures apply to their specific properties. 

Guests on the Premises

Some jurisdictions may have regulations on the maximum number of people that can stay in the unit and limit how many days that guests (people who are not named on the lease, overnight guests, etc.) can stay on the premises. Be sure to check if your state and local housing laws have provisions and definitions for guests on the premises.    

Pet Policy

A Pet Policy should clearly state whether no pets are allowed or if the property is pet-friendly.

List of Furnishings

It is important for both parties to inventory any furnishings that are already on the premises and have a mutual understanding about their existing condition. This is done to avoid any potential discrepancies and arguments between the tenant and the landlord.

Utilities and Other Services

It is important to specify which party will be responsible for each utility and/or service that benefits the property. The lease should also address how and when the utilities will be paid and provide specific instructions if necessary. For example, "the tenant is responsible for two-thirds of the electric bill, payable to the landlord within five days after receipt of the statement from the utility company."  

Some services must be supplied by the landlord, at the landlord's expense, by state law. For example, some states require that the landlord make available receptacles for garbage and other waste. Check with an attorney or a local housing authority if you have questions about what utilities or services the landlord must provide. 

Maintenance

In nearly every state, the landlord is responsible for providing the tenant with a safe and livable residence and thus the landlord has certain duties to maintain and care for the premises. For example, it is the landlord's obligation to make sure that the electrical wiring in an apartment complex is sound and is not a fire hazard. In order to assure that these responsibilities are met, most states prohibit the landlord from delegating these responsibilities to the tenant, even if the tenant is willing to assume them.

As another example, it would be inappropriate for the landlord to shift the obligation for roof maintenance to the tenant. The tenant may be unable to pay for necessary repairs, and the landlord is ultimately responsible anyway because of the landlord's duty to provide a livable residence. On the other hand, it is not uncommon for the landlord to delegate minor repair responsibilities to the tenant, especially for a single-family dwelling. 

Subordination of Lease

A "subordination of lease" is consent from the tenant that its rights to enjoy possession of the property are lower ("subordinate") in priority than the rights of a bank holding a mortgage on the leased property. The landlord's bank usually requires this arrangement for the bank's protection.  Without it, the bank might be limited in enforcing its mortgage (upon the landlord's default) because of the tenant's superior right of possession. 

Who to Contact for Issues

Even though it is generally the responsibility of the landlord to address issues or concerns, sometimes the landlord may request someone who is more qualified to address a specific issue to be the initial point of contact. This can be done to expedite the process of getting issues resolved. 

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