Month to Month Lease?

Question

I have a tenant who's been renting for 2 years and usually pays on time, but her lease is expiring at the of end November 2020. I have contacted her asking if she would be renewing her lease for another year. She replied and said "I would like to do a month to month, if not I will be moving.". Note that this is not the first time that this has been discussed with tenant upon renewal of lease. And as explained before, we (landlord) don't do month to month and can only give her either a 6 month or 12 month lease. For the record, we have given her 6 month leases for the last year and a half.

Now my question is, I don't do month to month (too much paper work and uncertainty) but considering COVID times we're living in should I accept the month to month or find another tenant (which isn't guaranteed)?

Thank you in advance.

Now my question is, I don't do month to month (too much paper work and uncertainty) but considering COVID times we're living in should I accept the month to month or find another tenant (which isn't guaranteed)?

Thank you in advance.

Zeke Liston · Answer

I think month-to-month leases have pros and cons for both the tenant and the landlord. I mostly prefer long term leases but also don't mind month-to-month leases. If you're in a good rental market and you're not satisfied with a month-to-month lease, I would tell the tenant you're only interested in 6-12 month lease options if she leaves she leaves but I wouldn't be surprised if she stays @Regina Bailey

Kyle J. · Answer

@Regina Bailey Well your tenant has made her position clear (either she goes MTM or she’s going to move). So I guess the choice is up to you. Personally, if it were up to me, I’d keep her as a tenant and let her go MTM.

Tenant turnover and vacancy kill landlord’s profits, so I wouldn’t want to force those things before you have to.

I actually don’t have a problem with MTM tenancies. There’s a lot of benefits for landlords with them (you can change the terms and raise the rents whenever you want, with proper notice, for example).

Some people think longer leases avoid vacancies. However, the reality is tenants can and do move whenever they want (lease or no lease).

Now, you don’t mention where you’re at, and in some areas there’s some benefit to using a lease if you’re going to time them to not end during winter if you have harsh winters and it’s hard to find tenants during that time where you’re at. However, being in California where I’m at, I don’t have that problem, and you don’t seem to have timed yours in such a way (since your lease is ending at the end of November).

So, if I were in your shoes, I’d just let her go MTM and keep this tenant who pays on time and avoid the vacancy. Just my two cents.

Regina Bailey · Answer

Thank you all for your advice. This was truly needed before making our decision.

David Schlatter · Answer

I only do a year lease upon move in. Then all of our leases switch automatically to month to month. I always give them the option to sign a renewal, None have. We have had very little trouble and very little vacancy. I would rather keep the tenantif she has been a good one!

Michele Fischer · Answer

You are hearing from a lot of fans of M2M, and that is also all that we offer.

In this huge period of uncertaintly, I can understand why people want a M2M, and she may stay another year and a half or more.  If you aren't under a COVID moratorium you could consider raising rent a little to provide that option since you aren't thrilled with the prospect.

You mentioned more paperwork, but a M2M is easy.  It is different agreement language, but doesn't even need to be renewed.  Depending on how your current lease is worded and local landlord laws read, your current lease may just roll into M2M with no changes.

Bjorn Ahlblad · Answer

I is a fallacy to think the length of the lease has something to do with how long a tenant stays. For the past 5 years we have only offered MTM leases we like it, it really favors the LL. You can raise rents whenever or issue a 30 day notice of termination.

Adam Martin · Answer

Locally late November is right between holidays and about the worst time to get a new renter even in non covid times.  I would probably just let them go month to month since they most likely won't pick a worse time to move anyway.  If they haven't moved yet it is unlikely they will anytime soon anyway and this keeps you from having this conversation every 6 months.  It may also make it easier to evict if moratoriums continue and they get behind you will most likely have better luck for overstaying the lease than you would if they get behind on rent.  I don''t like month to month easier but prefer it in these uncertain times.

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