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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 month-to-month lease allows for a more dynamic relationship between the landlord and tenant. It provides a level of flexibility to alter lease terms as long as state regulations for providing notice of these alterations are followed. This type of arrangement is beneficial to landlords because with proper notice, they can change the rent amount on a unit without waiting for a fixed lease term to end. From a tenant’s perspective, a month-to-month lease is an appealing option to those who plan to live in a unit for a short time or are unsure of what their future holds.
The flexibility afforded by a month-to-month lease often comes at a cost for the tenant. The rent for month-to-month residential leases tends to come in at a higher dollar amount than fixed-term, or traditional leases. Prior to terminating a month-to-month lease, the tenant or landlord must give either 30 or 60 days notice, depending on the situation. This relatively short notice may take the landlord or tenant by surprise and leave them rushing to find a new renter or secure a place to live.
In the state of California, a landlord or tenant must provide at least 30 days notice to end a month-to-month lease agreement if the tenant has resided in the unit for less than one year. At least 60 days notice must be given if the tenant has resided in the unit for more than one year.
Month-to-Month Leases Vs. Fixed-Term/Traditional Leases in California
Many landlords question whether they should offer a month-to-month residential lease option or stick with traditional leases. There is no correct answer to this question, as there are pros and cons associated with each type of agreement. Here are some of the main differences between month-to-month and traditional leases:
- In a month-to-month lease, the tenant or landlord may terminate the agreement at any time with proper notice, rather than waiting for the term to be complete as specified in a traditional lease.
- A month-to-month lease might relieve the tenant from steep penalties associated with ending a traditional lease, sparing the relationship between the landlord and tenant and introducing flexibility into the arrangement.
- A month-to-month lease is automatically renewed at the end of each month, while a traditional lease must be renewed consciously at the conclusion of the lease for another term.
- With proper legal notice, the landlord may change the terms of a month-to-month lease at any time, while in most cases, changes to a traditional lease must occur at the renewal of the agreement. This may include the rent amount, pet policy, sublease policy, smoking policy or any other agreement listed in the month-to-month lease.
Creating a Month-to-Month Residential Lease Agreement in California
In many ways, a month-to-month residential lease agreement operates in a similar way to a traditional residential lease agreement. A month-to-month lease will still address certain basics such as the rent amount, security deposit and assigned responsibility for utilities. The main difference between the two types of agreements is that the stipulations of a month-to-month lease will consider the possibility that the tenant may not be a long-term resident of the property.
Here are the specific sections advised to include in a legally-compliant month-to-month residential lease agreement in the state of California:
This section includes the landlord and tenant’s full legal names, along with the date that the lease agreement is written.
This section indicates the street address, city, state, zip code and county of the property to be rented.
This paragraph states the date that the lease will begin and describes it as a month-to-month arrangement. This section also outlines the amount of notice required by the state of California that the landlord or tenant must give in order to terminate the lease. In California, 30 days notice is required if the tenant has resided on the premises for less than one year, while 60 days notice is required if the tenant has resided on the premises for more than one year.
Similar to a traditional residential lease agreement, this section states the following important information:
- Rent amount.
- Day that rent is due each month (the first day of the month is a typical due date).
- Date that the first rent payment is due.
- Who, where and how to remit rent payments.
For clarity, most landlords state the monthly rent due date in this section again. Applicable late fees, usually a daily charge, are also listed here. Lastly, the final day that rent payment and late charges will be accepted prior to further consequences or eviction should be clearly stated.
This section states the amount of money owed by the tenant if their remitted check is returned to the landlord due to not having enough money in their bank account.
This section lists the amount of money due for security deposit at the commencement of the month-to-month lease agreement. This section should also list the conditions in which all or part of the security deposit will be withheld at the termination of the lease. According to California law, a landlord has the right to withhold all or part of the security deposit for the following reasons :
- Nonpayment of rent.
- Damage to the unit exceeding reasonable amounts and caused by the tenant or visitors to the unit.
- Cleaning costs to prepare the unit for the next renter.
- Coverage of future costs related to breach of the month-to-month lease agreement.
- Any other violations of the month-to-month lease agreement which require funds by the tenant.
This section defines a lease default and indicates the amount of time that a tenant has to correct a default on their part before legal action may be taken by the landlord. This section also states a tenant’s potential consequences of failing to correct a default. If the tenant defaults on a month-to-month lease, the consequences may include:
- Financial obligation to correct the default.
- Financial responsibility to pay rent until term is expired if tenancy is abruptly terminated.
- Eviction proceedings, in accordance with California law.
This section clearly states the maximum number of people that may live in the rental unit without the landlord’s consent.
This section indicates which utilities and services are included in the lease agreement and rent payment. Possible utilities and services may include, but are not limited to:
- Trash pick-up.
- Snow removal/grounds maintenance.
This section outlines the landlord’s pet policy. It should include the following points regarding pets on the premises:
- Number of pets allowed, if any.
- Type(s) of pets allowed.
- Maximum size of pets allowed.
- Pet deposit amount.
- Pet rent amount.
This paragraph defines the length of time before the rental is considered abandoned by the tenant, giving the landlord legal permission to enter the property, remove the tenant’s belongings and/or terminate the lease. This section should include these two critical pieces of information:
- The number of consecutive days that a tenant is absent from the unit before the landlord may assume that it is abandoned.
- The number of days that a tenant is absent from the unit with rent overdue before the landlord may assume that they have abandoned the property and take legal action.
This section also states that if the unit is considered abandoned, the landlord may remove the tenant’s personal property left behind in accordance with California law.
Additional Terms and Conditions
This section addresses miscellaneous issues pertaining to the month-to-month residential lease agreement. It may include, but is not limited to, the following subsections:
- Display of signs.
- Noise/quiet hours.
- Sublease policy.
- Dangerous materials clause.
- Acceptable use of premises.
- Acceptable use of balcony space.
- Bicycle storage.
- Locking of main/entrance doors.
- Alterations to the unit.
- Report of water leaks.
- Extended absences.
- Insurance responsibility.
A month-to-month residential lease agreement in the state of California should include the following legal statements:
- Binding effect statement.
- Governing law statement for California.
- Megan’s Law statement regarding registered sex offenders required by California law.
- Entire agreement clause, stating that no additional written or verbal terms of the lease exist.
- Cumulative rights clause.
- Waiver statement.
- Indemnification clause, waiving the landlord of liability for unfortunate circumstances including loss, injury or death on premises.
- Legal fee responsibility.
Without the signatures of the landlord and tenant(s), a month-to-month residential lease agreement in the state of California is not a legally-binding document. The end of the lease must have space for the printed name and signatures of the landlord and tenant(s). Full legal names should be used in this section for legal clarity.
California-Specific Regulations for Month to Month Rental Agreements
The state of California has specific regulations governing month-to-month residential lease agreements that must be observed by the landlord and tenant. The following sections describe the applicable California laws to be aware of prior to entering into a month-to-month lease.
In a month-to-month residential lease agreement, the landlord has more opportunities to raise the monthly rent amount on their unit. In most jurisdictions, the landlord is at liberty to raise the rent as much as they feel is appropriate. In rent-controlled areas, there is a legal limit to the amount of a rent increase, which varies by unit, year and municipality. Prior to raising the rent on a month-to-month lease, the landlord must give at least 30 days notice to the tenant. This differs from a traditional lease, because traditional leases do not allow rent increases until the conclusion of the term, which could be more than a year. This means that in a traditional lease, the tenant is locked into their monthly rent payment until the lease expires.
In most situations, a month-to-month residential lease agreement does not require the landlord to provide a reason for terminating the lease in California, although a written reason is often recommended as eviction based on discrimination or retaliation is prohibited. If a tenant has lived in a unit on a month-to-month basis for less than one year, the landlord is required to provide at least 30 days notice by California law. If a tenant has lived in a unit for greater than one year, at least 60 days notice is required by the landlord. A landlord may be within their rights to provide less notice if the tenant fails to pay rent, uses the premises illegally or otherwise conducts a breach of the month-to-month residential lease agreement.
If a tenant wishes to end their month-to-month arrangement, the same notice is required. If the tenant has lived on the premises less than one year, they must give at least 30 days notice prior to vacating the unit, whereas if they have lived on the premises for greater than one year, they must give at least 60 days notice. If the landlord breaches the lease agreement, or it is a matter of health and safety, the tenant may be able to legally provide less notice than what is generally required.
California law requires all landlords to promptly fix issues within the unit that may render it inhabitable. This law applies to traditional and month-to-month leases. Habitability issues may include, but are not limited to, the following:
- Broken front door locks or handles.
- Gas leaks.
- Sewage leaks.
- Peeling paint suspected to contain lead.
- Mold growth.
- Illness-causing bacteria.
- Pest infestation.
- Poor ventilation.
- Unsanitary living conditions.
- Broken heater.
In a month-to-month lease, if the landlord does not provide a habitable residence for the tenant, the tenant may take legal action, or may have legal grounds to be relieved of the lease without the required notice.