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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.
When it comes to advantageous lease arrangements, it’s the month-to-month lease that many consider to be the least restricting for both the landlord and his or her tenant. This is due to the fact that these are considered to be at-will leases, and both parties can exit the tenancy much more easily than either would with a fixed-term lease. Unlike a fixed-term lease, which usually has a period of six months or one year, a month-to-month has no preset time frame.
In fact, all that’s needed to end an at-will lease is the state-prescribed warning period, which in Indiana is 30 days for both lessee and lessor. With a lease like this, the end term is the end of the current month, and unless the aforementioned document is provided, the lease will automatically renew into the next month. This happens into perpetuity.
For the lessee, this can be very useful because it allows the renter to have a place to stay while maintenance is being done or their main dwelling or while they are waiting for an ideal property to become available. This way, they won’t have to enter into a restricting fixed-term lease and worry about ending the lease early, which can bring with it several disadvantages and repercussions. Additionally, this is also a great way to live on a property without having to renew every six-month or one-year period; since the contract renews automatically, there’s little maintenance.
For the lessor, this is also a very beneficial arrangement, especially for those properties that a landlord only wishes to rent out during certain times of the year. When the landlord wants the property vacant, he or she can simply tender a 30-day notice, and the tenant will be expected to leave. This is also great for landlords that are considering moving into the premises themselves or want to sell the property at a later date.
Creating a Month to Month Lease Agreement in Indiana
While these types of leases may be very useful for both parties, it’s still critical that these are all-inclusive so that there are no problems down the line. A lease agreement of this type serves as a legal framework that covers aspects of the lease like maintenance, security deposits, and of course, the policy of providing notices. It also will establish the monthly rent value and the rent due date. Here are the sections that will need to be provided so that there’s an ironclad framework for this type of arrangement:
Tenant and Landlord Information
Since this is a legally-binding document that will be recognized by the courts, it must contain information about any parties that are affected by the document. In the case of a month-to-month lease, this will typically be both the landlord and the renter. Include the full names of both of these parties. In addition to this, the pertinent information about the property will need to be provided. This means that the street location, unit number, the number of the building, the county, any cross streets, and anything else that might make identifying the property easier will need to be included.
Also, in regards to the property, the amount of the monthly rent should be included near the top of the document. After this has been recorded, for the sake of the records and the edification of the renter, the due date of the rent should be included. One of the most essential parts of the payments section of the month-to-month lease is the section that expressly states that the lease will automatically renew each month until canceled by either the tenant or the landlord.
After this information has been provided, how the rent must be paid must be included. This means that the location where rent is to be paid needs to be provided as well as how payments will need to be submitted will need to be explicitly explained. Finally, the precise dollar amount of rent will need to be noted in this section as well as the amount of the security deposit so that the tenant will understand his or her financial responsibilities for the tenancy.
Details about the Security Deposit
In Indiana, a month-to-month tenancy is subject to state laws regarding how security deposits are tabulated and handled. It’s important to understand that Indiana sets no upward cap on how much a landlord can charge for a security deposit. Also, a landlord has up to 45 days to provide the security deposit to the tenant after the tenancy has ended. It’s also noteworthy that a landlord can legally use the security deposit to repair any damages caused by the tenant during the lease period.
While not every property allows pets, it’s still common practice for a pet-friendly property to include provisions for those renters that have dogs or cats. First, when writing up one of these documents, it’s not uncommon for landlords to include a “pet fee,” which is similar to a security deposit in that it’s designed to help provide a fund to help repair any pet-related damage to the unit. If there is to be a fee of this type, the document needs to explicitly state the dollar amount. In addition, if the property allows only some types of pets or certain breeds, then this should also be stated here.
Unassigned and assigned parking spaces can sweeten the deal for those tenants that have vehicles, and if there is parking available on the property, then a section outlining tenant rights will need to be included. In this section, any assigned parking space numbers will need to be included as well as the location of these dedicated spaces. If there is any associated fee, then the amount should also be clearly marked in this section. Finally, a few blank spaces that the tenant can use to provide information about their vehicle can be included so that the landlord knows which cars are not to be towed.
Notice to Vacate
If there is a situation where a tenant is in serious violation of the rules of the month-to-month lease, these tenants can still be evicted in a similar manner to a fixed-term lease. To do so, the landlord can provide the tenant with a Notice to Quit document, which will have a duration of 30 days.
As with a standard lease, a month-to-month lease can also outline the expectations for the lessee. Here are a few policies that can be established in this part:
- Policies on Noise: It’s crucial for all tenants to feel comfortable and not be disturbed during their day-to-day. For this reason, most properties have some form of noise policy that typically established quiet times. During quiet times, tenants may not move furniture, have unruly and loud guests, or engage in any lively conversation that might disturb their neighbors.
- What Stays: It’s common for month-to-month units to have preexisting furnishings due to the sometimes temporary nature of these leases. If there are furnishings and fixtures that come with the property, then each item should be cataloged on the lease. This way, the tenant knows which items to leave behind when it’s time to leave.
- Policies on Common Area Upkeep: Keeping the common areas neat and clean is absolutely critical for a landlord since attractive properties draw new tenants. For this reason, policies on the upkeep of common areas, garbage removal, and keeping personal items within the unit must be explicitly stated. Additionally, the lease should also point out the frequency of garbage removal on the property and where to take refuse.
- Abandonment: When it comes to tenant churn, a month-to-month property can see a lot of individuals within a year. For this reason, the landlord will need a means of quickly determining if the property has been abandoned. To facilitate the process, the number of days, without rent, that a landlord must wait before putting the property back up for rent should be stated in the month-to-month document.
- Signage Display: If a tenant is opting to soon end a tenancy, a set of terms should be created that will help the landlord to determine when it is allowable to post signage about upcoming vacancies. This is explicitly designed to help the landlord avoid vacant properties. This section can be called the “Display of Signs” portion of the additional terms section. The placement of these signs must only be used after the state-mandated notice period has been observed.
Finally, the last part of the month-to-month lease will require that all of the involved parties sign off on the details of the lease. Not only will this require that the lessee and lessor provide their signature, but they will also need to print their name and date the document as well. Once this part is completed, the document will be legally binding for all involved parties, and the document will officially serve as a legal record.