Lease vs. Month-to-Month Rental? Smoking?

[Kendall Miller]

Hello again,

I am managing a rental apartment property in California. The property is somewhat run-down i.e. In need of paint and landscaping. The landlord has been charging  approximately a much lower rent than that of comparable properties in the area. The property will be put on the market soon. The landlord is thinking of charging about $150 per month for less than the market value for a newly renovated unit. There is no rent control in our area. Should we have the new tenant sign a lease for this amount or just do a month-to-month contract? My thought is that if there is a lease in effect, the new owner would not be able to raise the rent until the lease ends. I wonder if this would reduce the price that the landlord could expect to receive for the property. Are there any disadvantages to not having a lease in effect?

If the prospective tenants are smokers, the landlord does not want to allow any smoking in the apartment. I don't think it is realistic to expect a tenant to smoke outside, even if they sign a contract stating that they agree to do so. In California, is it legal to disqualify prospective tenants because they smoke?