The Texas month-to-month rental agreement allows a person (“tenant”) to pay a fee (“rent”) to a property owner (“landlord”) in exchange for the use of their rental property. These agreements are legally binding and last for one month at a time with no end date.
Not all Texas leases are for standard periods of time such as six months or one year. Some properties are rented on a “month-to-month” basis instead. A month-to-month lease could be used whenever you want to have more flexibility with your rental property. For example, if there’s a chance you may want to sell the property or move in yourself, having a month-to-month lease would make it easier for you to do so.
You may also use a month-to-month lease whenever your original one has expired and either you or your tenants would rather not sign a new one. In that case, a month-to-month lease would provide you with greater protection than having no lease at all.
Month-to-month leases do provide you with greater flexibility; however, they provide that same benefit to your tenants. Accordingly, it’s important for you to draft a month-to-month lease very carefully in order to reduce the potential for loss. When creating a month-to-month lease, here are a few things you should keep in mind.
Creating a Month-to-Month Residential Lease Agreement in Texas
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 Texas:
Provide the physical address of your property as well as the unit number if applicable. According to Section 92.201 of the Texas Property Code, you must also disclose the ownership of your property. Underneath the address, list the name of the property owner as listed in your county clerk’s office. If you allow someone else to manage your property, provide the name and address of the property management firm as well as a point of contact.
List each adult who will be allowed to reside in the dwelling. Include a clause that states no other persons will be authorized to live there without your permission. To prevent visitors from inadvertently taking up residence, you may wish to place a time limit on houseguests. For a month-to-month lease, this should be a shorter time than with a regular lease-typically no more than one week.
In this section, state that the lease is being conducted on a month-to-month basis and list the start date. State that the lease will continue to be renewed on a month-to-month basis so long as all the conditions are met. Provide a few lines that talk about the ability of either party to terminate the lease at any time by providing at least three day’s written notice to the other.
Rent and Security Deposit
State how much the rent is and how often it is due (weekly, monthly, etc.). Give a particular date such as the first of each month when rent should be due. Discuss what late fees will apply if the rent is not paid on this date.
List the amount of the security deposit on a separate line. Let your renters know that you may withhold a portion of the security deposit to cover late rent payments, damages, or any fee related to a breach of the lease. You may also require tenants to provide you with an advanced notice in order to receive their security deposit back. If you wish to do so, place this clause in bold or underlined font.
Month-to-month leases sometimes go on for several months or even years. Accordingly, you may wish to include an escalation clause for future rent increases. An escalation clause would let your renters know that if they continue to occupy the property within a certain timeframe (six months, one year, etc.) that the rent will automatically increase by (x). If you include this clause, leave a line for your tenants to initial.
Utilities and Penalties for Disconnect
List each utility associated with the property as well as who is responsible for each. Discuss what will happen if your tenants allow certain utilities to become disconnected. For example, if there is no heat for an extended period of time will you have the electricity or gas reconnected and then try to collect from your tenant? Ensure your renters know what the consequences are for not paying utilities by listing each penalty on a separate line and then having them initial.
Pets and Pet Fees
In this section, talk about whether or not pets are allowed. If you do allow pets, what type? Do you have specific restrictions on breeds? What about a weight limit or restriction on the number of animals?
If you do allow pets, what type of deposit will you require? Will there be an additional monthly charge for having a pet? When the tenant leaves, will he or she be responsible for flea treatment? These are all things you should spell out very clearly so that there is no confusion.
According to Section 92.258 of the Texas Property Code, landlords must test all smoke alarms at the beginning of a lease period. Accordingly, you should test them before signing a month-to-month lease, even if you are in essence carrying over from a longer term lease. List the dates on which the smoke alarms were tested as well as their location and type.
Include a clause stating that tenants may be liable for civil damages and attorney’s fees if they intentionally disable a smoke detector. Place this statement in bold or underlined font.
Notice to Vacate
When signing a month-to-month lease, many tenants believe landlords have no grounds to evict them. Your month-to-month lease agreement is a good place to clear up any misunderstandings concerning this issue. Let your tenants know that you may provide them with a three-day Notice to Vacate if they fail to pay rent or otherwise violate one of the provisions in your lease. Advise them of the possibility of legal action and the possible effects an eviction could have on their ability to rent property in the future.
According to Section 92.052 of the Texas Property Code, tenants have the right to repair and deduct certain items whenever landlords fail to keep the property in good order. This section of the property code also requires you to inform your tenants as to that right. Statements must be underlined or in bold font and include the following:
- A repair and deduct may only be used for situations in which you had a duty to provide a remedy. These situations are spelled out in Section 92.052.
- The fact that tenants must notify you in writing of their intent to repair and deduct.
- Repairs may not exceed $500 or the sum of one month’s rent, whichever amount is greater.
Who will be responsible for things such as cutting the grass or snow removal? Make sure your tenants know if they will be required to do these things. You should also let them know that they will be responsible for any expenses associated with performing their required maintenance.
Aside from specific maintenance tasks, your renters should also know that it is their responsibility to keep the dwelling reasonably clean and sanitary. In particular, you should ensure that your renters know they are not to let trash accumulate or keep the dwelling in a manner that would attract pests.
Alterations and Improvements
Include a few lines that state your tenants are not authorized to make any alterations or improvements to the property. This include painting, landscaping, hanging wallpaper, or any other cosmetic improvement that’s designed primarily for the tenant’s enjoyment. If they do make such improvements, they will be required to return the dwelling to its original condition at their own expense. Let them know that a failure to do so will result in you making the necessary deductions from their security deposit.
Peaceful Enjoyment of Property
The Texas Attorney General has proclaimed that tenants are afforded the right to peaceful enjoyment of their property. This means that you should provide written notice before accessing the property whenever possible.
In the event this is not possible, you will want to have some method of notifying your tenants that you have been there. It is a good idea to let them know what that method will be by including it in your lease. Write a line or two that tells how you will notify tenants such as a note on the door or through email.
Landlords often wish to show their properties during the last 30 days of a lease period. With a month-to-month lease, that could actually be at any time. Let your tenants know that you may exercise this right to show the property to others, provided you have given written notice that you intend to terminate the month-to-month lease.
Lead-Based Paint Disclosure
When renting a dwelling constructed prior to 1978, the Environmental Protection Agency requires you to provide tenants with a lead-based paint disclosure. This is a separate addendum from your month-to-month lease, which can be found on the EPA’s official website.
Complete the required signature blocks and initial where appropriate. Attach one copy to your month-to-month lease and ensure each of your tenants receive a copy. You might also wish to include a line having your tenants acknowledge that they have received a copy of this form on the actual lease itself.