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Read further to learn more about month-to-month residential lease agreements in Alabama, such as what disclosures are required and what else should be included.
What is a Month-to-Month Residential Lease Agreement?
The month-to-month residential lease is an agreement between a landlord and a tenant for one month of residency. This type of lease is automatically renewed each month unless terminated by the landlord or tenant in accordance with state regulations. While it is not legally advised, if there is no verbal or written residential lease agreement, it is implied to operate on a month-to-month basis.
The Alabama Code called the Uniform Landlord and Tenant Act Section 35-9A is the governing law for all month-to-month rental agreements for properties located in the state of Alabama. All of the Alabama law may be included in a rental agreement by simple reference to Section 35-9A of the Alabama Code. This law applies whether or not a reference is included in any agreement.
To avoid misunderstandings with tenants, Alabama landlords typically include the specific language from the Alabama Code in any rental agreements.
In addition to following Alabama state laws, landlords must also follow federal laws in regards to discrimination under the Fair Housing Act. Under these laws, discrimination is illegal when it is based on race, color, nationality, religion, sex, family status, or disability.
For properties that were built before 1978, under the requirements of the Environmental Protection Agency (EPA), landlords must give prospective tenants a disclosure notification about the potential hazard of lead-based paints.
Basic Legal Requirements for Alabama Month-to-Month Rental Agreements
Here are the important basic legal requirements required by Alabama law:
30 Days’ Notice to Vacate
Under a month-to-month rental agreement, either party, the tenant or the landlord, may give the other party, a notice to vacate the rental unit. Under Section 35-9A-441, the notice to vacate must allow at least 30 calendar days from the date of the next periodic rental payment date that is also written in the notice.
As a practical matter, this means that if the rent is due on the first of each month, a notice to vacate or terminate the month-to-month agreement that is given on the second day of the month must use the date to vacate as 30 days from the next rental payment. This would be 30 days from the following first of the next month.
One way that landlords deal with this 30-days notice requirement is to make rent due on the first of each month and have in the rental agreement that the tenant may only terminate the rental agreement on the last day of a month. If the tenant wants to terminate the agreement, the tenant must give the landlord 30 calendar days notice prior to the last day of a month.
If the tenant plans to vacate the rental unit on any day from the first day of the month or thereafter, the tenant is responsible for that full month’s rent.
If a tenant moves in on a day that is not the first day of a month, then the first rent payment is prorated for the partial month. This proration is charged at a rental rate that is a daily rate for the number of days until the next first of the month. The calculation of rent per day is made by taking the monthly rent, times 12, and then dividing that amount by 365 days.
Under Alabama law, Section 35-9A-201, the security deposit for a rental unit may not exceed one month’s rent, except for a pet deposit or if the tenant’s use of the rental unit creates extraordinary additional risks for the landlord.
A landlord may deduct from the security deposit any unpaid, accrued rent and/or the actual costs of repairing damages to the rental unit. If there is no unpaid rent due or damage, the landlord must give the tenant a full refund of the security deposit within 35 days after the date in the notice to vacate. If there is unpaid rent due and/or damage, an itemized list of the items deducted from the security deposit is given to the tenant and the balance of the security deposit (if any) is then refunded.
It is the tenant’s responsibility to give the landlord a new mailing address for the security deposit refund. The landlord is in compliance if a check is mailed within 35 days. If the refund check remains uncashed or the security deposit remains unclaimed for 180 days after the notice to vacate, it is forfeited by the tenant.
If the unpaid rent or the costs of repairing the damages exceed the security deposit, the landlord has the right to sue the tenant to recover the actual damages and reasonable attorney fees.
Creating an Alabama Month-to-Month Rental Agreement
Here is a step-by-step guide to help landlords create a month-to-month residential rental agreement.
Terms and Conditions
The month-to-month residential rental agreement should contain the following:
- The name of the landlord and contact information.
- The name of any property manager and contact information.
- The name of the tenant(s) and contact information.
- The description of the rental property.
- The amount of the monthly rental payment.
- The day of the month that the rent payment is due.
- The address of the authorized party that can receive the rent and the acceptable way(s) the rent can be paid.
- The penalty that is charged per day for late payment of the rent.
- The number of calendar days after the rent is due before the late payment penalty applies.
- The number of calendar days, after rent remains unpaid, which will cause eviction proceedings to begin.
- The fee for a check that is returned by the bank for insufficient funds.
- The amount of the security deposit (limited to a maximum of one month’s rent).
- A statement that the tenant cannot use the security deposit to pay the last month’s rent.
- A statement that the tenant cannot withhold all or part of the rent to pay for repairs of the rental unit.
- The security deposit refund policy (by law the refund is due within 35 days of vacating the unit.)
- A statement that says the landlord can use all or part of the security deposit to pay for the repairs of damages to the rental unit caused by the tenant.
- The default policy with the number of calendar days after receiving a written notice of default allowed to cure a default depending on the type of default as permitted under Alabama law Section 35-9A-421.
- A statement that says the security deposit is forfeited for failure to cure a notice of default within the required period.
- A statement that says the premises can only be used as a residence and not for any commercial purpose.
- A statement that says the tenant inspected the premises and found it in good order and that the tenant shall notify the landlord immediately if repairs are needed.
- A statement that the tenant is either allowed or not allowed to sublease the rental unit.
- A statement that says the tenant will not store dangerous, extremely flammable, or explosive items in the rental unit.
- A list of the utilities paid for by the tenant and those paid for by the landlord (if any).
- An inventory list of anything included in the rental unit, such as appliances, furniture, and fixtures.
- The full legal name(s) of tenant(s) responsible for the rent payments.
- If there is more than one responsible tenant, include a statement saying that the tenants are jointly and severally liable for the terms of the rental agreement.
- The number of allowed occupants.
- The guest policy that states the time limit that guests may stay in the rental unit.
- The number of days that the tenant can leave the rental unit unoccupied, which will thereafter be considered abandonment.
- Additional terms that may be needed according to municipal codes and restrictions.
- Special rules for the rental property, such as allowed hours for move-in/move-out, noise restrictions, smoking, and other rules.
- Rules and restrictions about the tenant making alterations to the rental unit. Alterations usually require the written approval of the landlord. and that the alterations are removed (with the rental unit put back in the same condition found upon moving in). An alternative is that the landlord becomes the owner of the alterations when the tenant moves out.
- A statement about the tenant’s responsibilities and the landlord’s responsibilities for regular maintenance and repairs as required.
- A statement about the tenant’s responsibilities and the landlord’s responsibilities for maintaining insurance of the premises and its contents.
- A statement about the landlord’s right to enter the premises for emergencies and the two day’s advance written notice needed for other legitimate reasons, such as making repairs.
- A statement about rent not being charged during the time when repairs are made if the premises are damaged by something not caused by the tenant. If the landlord cannot or chooses not to repair the rental unit, then any unearned rent along with the full security deposit is refunded to the tenant.
- Optional terms, such as putting up “for rent” signs and any additional pet deposit with the pet policy.
- Special considerations, such as rules for the use of common areas, swimming pools, gyms, balconies, parking, bicycles, etc.
- The method(s), contact information, and form used for legal notices between the parties.
- Reference to Alabama landlord/tenant law and a statement of the Alabama county, where the rental unit is located, as being the legal jurisdiction.
- A statement that says the written agreement including a copy of any rental application, which is attached, is the full and complete agreement of the parties and any modifications need to be in writing.
- Place for the signatures of the parties.
Month-to-Month Agreement Signing, Payments, and Moving In
A month-to-month agreement is signed by all parties. A copy of the signed agreement is given to all parties. The tenant pays the first month’s rent and the security deposit to the landlord. The tenant must be allowed to move in on the date that the month-to-month agreement is effective.
2009 Alabama Code Title 35 — PROPERTY.
Chapter 9A — UNIFORM RESIDENTIAL LANDLORD AND TENANT ACT