What is a Month-to-Month Lease?
A month-to-month lease is a rental agreement between a landlord and a tenant that continues for an indefinite period of time and renews on a monthly basis. Such an agreement is automatically extended unless the landlord or tenant provides advance written notice to the other party that it intends to terminate the lease. The amount of notice required is typically set forth in the lease, but if nothing is expressly stated , Florida law requires the tenant to provide at least 15 days’ notice and the landlord to provide at least 45 days’ notice to terminate a month-to-month lease. A month-to-month lease does not obligate the tenant to stay for any particular length of time, but it creates a tenancy that allows either party to terminate the tenancy given appropriate notice. Such leases are very common in Florida. In fact, Florida law requires a 12 month lease to be converted into a month-to-month lease if the tenant continues to occupy residential rental property after the lease term expires and either the landlord or tenant (or both) accepts rental payments.
Advantages for Tenants
One of the major benefits of a month-to-month lease is the flexibility it affords Cherokee tenants. Because this type of lease does not bind tenants to lengthy terms, they can leave a rental situation if they need to for whatever reason without being penalized. Just as tenants can leave, so can landlords. Since the lease can be terminated by either party at any time, tenants may face situations where they need to move when they do not want to. Or, if the rental property is sold or defaults on its mortgage, the lease is terminated.
The obvious downside to these types of leases is that, since they are not binding long-term contracts, a landlord is free to change the lease terms at any time regardless of whether the tenant wishes for the changes to be made. In fact, all a landlord has to do is give a 30 days’ notice. Because a tenant cannot do anything about this, many landlords decide to raise the rent on their properties every year once the lease has terminated. This means that a tenant risks having to pay more for the same rental property they are already occupying if the landlord decides to raise the rent each year.
Advantages for Landlords
A month-to-month lease agreement is considered a short-term lease under Florida law. From a landlord’s perspective, the benefits of a short-term lease are as follows:
1. Flexibility. Since the lease expires at the end of each month, neither party is bound to each other beyond one month. Either party may decide, with proper notice, not to renew the lease for the next month.
2. No Long-Term Commitment. If the landlord is uncertain about the location of the property or the quality of the tenants, a short-term lease provides an opportunity to assess the property and the tenants. If the tenant is not performing or living up to the landlord’s expectation, the landlord may decide not to renew the lease. Conversely, if the property requires significant rehabilitation, the landlord may decide to perform the work and then rent it to the tenant on a monthly basis, without entering into a one year lease.
Although a short-term lease has many benefits, the frequent turnover of tenants may be challenging. The landlord may incur significant expenses reletting the property. A tenant may not take good care of the property, especially if there is no long-term commitment. The short-term lease may also increase the length of time that the property stands vacant.
Requirements Under Florida Law
Under Florida state law, the tenant or landlord must provide at least 15 days’ notice prior to termination of the tenancy. However, this provision can be modified in the written lease. Carlandia, Inc. v. Kelsey, 623 So.2d 1227 (Fla. 1st DCA 1993). The notice period can be increased if both parties to the lease agreement agree to a longer timeframe. Non-compliance with these notice requirements creates license issues for the landlord. Stowe v. Rorabeck, 153 So.2d 32 (Fla. 2d DCA 1963). In Stowe, the landlord (Rorabeck) sent a notice of termination to his tenants via certified mail. However, the tenants denied receiving the notice. The trial court ruled in favor of the tenants, finding that the landlord incorrectly served them with the notice of termination. On appeal, the second district upheld the trial court’s decision finding that "the method used by the landlord to serve the termination notice was insufficient and did not comply with the terms of the tenancy." Id at 33. Custodian Services v. Hadley, 387 So.2d 988, 992 (Fla. 1st DCA 1980) (holding that a landlord’s failure to provide 15 days’ written notice prior to termination of the tenancy created a license issue). In circumstances where the lease requirement for notice is inconsistent with the nonresidential land sales and landlord tenant laws, the latter govern. Real Property, Probate and Trust Law Section of the Florida Bar Landlord-Tenant-Purchaser Relations in Florida (May 3, 2005).
How to Prepare a Month-to-Month Lease in Florida
When drafting a Florida month-to-month lease agreement, it is important to include the following key components:
Parties – This section identifies the lessor and lessee (tenant) to the lease. Ensure that both parties’ names are spelled correctly, are not missing from the document, and that spelling matches government issued identification.
Subject Property – This section describes the rental space being leased, so the reader will know exactly what is being rented and avoid a battle over what is or is not included in the rental. It is also a good practice to attach a blueprint of the subject property and make sure the parties initial every change in the lease. The "Rambo" approach of crossing out everything and writing in what the parties want creates ambiguity and sometimes an unwritten modification to the writing.
Time Period – The time period can be broken down into weekly, bi-weekly, semi-monthly and monthly . The parties should agree to the time period of the lease prior to drafting the lease (no amendments after the fact), as this element is very important.
Rent Due Date – The parties should decide if rent is due by the first of the month, the 15th of the month or at some other time. Many landlords require rent to be paid via a check in the mail, while others do not mind cash. It is important to get this information up front and to have the language in the lease, as there are many scams out there involving fake checks, wire transfers or cash. Over the last five years, some Florida landlords have lost thousands of dollars from thieves using these methods.
Term Renewal – The parties should either include in the lease how many months the lease will renew or how the renewal will occur. For example, the renewal can occur on a month-to-month basis or after an election period. Having it spelled out in advance will protect both the landlord and tenant.
Terminate a Month-to-Month Lease
Whether a lease is month-to-month or for a fixed term, either party may wish to end the lease at some point. Even if the lease agreement does not include a termination provision, a month-to-month lease may be terminated in compliance with Florida law.
A month-to-month lease may be terminated by the landlord by giving the tenant 15 days’ notice prior to the end of any monthly rental period. Should the tenant desire to terminate the lease, the tenant may give the landlord 15 days’ notice prior to the end of any monthly rental period. The notice must be in writing, and the same method of delivery applies as does for providing the initial notice. A tenant’s notice to terminate need not be in writing if the tenant has paid the next month’s rent and neither party wishes for the lease to continue. Again, the law requires specific methods of delivery of proper notice or a proper waiver of notice, to terminate a lease. Florida’s controlled and clear system helps prevent abusive termination of leases or situations where an unknowing tenant is forced to vacate their home.
Common Mistakes and How to Avoid Them
Many landlords and tenants in Florida make a few common mistakes and, unfortunately, they often end up costing the party that’s making the mistake.
Failure to Document the Terms Properly: The issue of how a month-to-month lease is agreed upon, either in writing or verbally, is fairly common. A verbal agreement, for example, may be difficult to enforce in the event it becomes necessary to enforce the landlord’s right to possession of the rental unit or if the tenancy needs to be converted to a fixed-term lease.
It is essential that landlords and tenants carefully note the terms of the lease. Important details include the following:
Lack of Signatures: This may seem like a small detail that might be overlooked , but many landlords and tenants have found that they have major issues when it comes to the enforcement of certain terms of their written lease because they didn’t get the lease signed by both parties. It’s critical to have both parties sign on the dotted line, including both spouses of a married couple who will reside in the unit.
No Termination Procedure: The lease should also include the steps that need to be taken by the landlord and tenant to terminate the agreement or convert the agreement from a month-to-month to a fixed-term lease. Failure to do so can create liability for either party, and confusion for both parties.
