What Is a Month-to-Month Lease on an Apartment?

When you rent an apartment, most residential lease terms last for a period of 12 months. But if you’re in a situation where a standard 12-month lease agreement doesn’t suit your housing needs, you might be interested in searching for a month-to-month apartment lease instead.

A month-to-month lease offers more flexibility than a traditional rental agreement. Yet that perk can often come at a high cost. Before you move forward with this type of living arrangement, it’s important to understand how a month-to-month lease works along with its potential benefits and drawbacks.

How does a month-to-month apartment lease work?

A month-to-month apartment lease is a special type of rental agreement between a landlord or property manager and a tenant. Rather than requiring a tenant to sign a contract with a standard 12-month rental term, a month-to-month lease allows a tenant to rent an apartment with no specific end date.

With this type of rental agreement, the lease will renew each month until the landlord or tenant decides to terminate the agreement. This arrangement typically continues indefinitely until either party—the landlord or tenant—gives sufficient notice to end the contract.

Additional details you may need to know about month-to-month leases are as follows.

• A landlord might be able to increase your rent at any time during a month-to-month lease agreement, though advance notice may be required in some states.
• Whether the landlord or tenant wishes to end a month-to-month lease, some states may require a 30-day (or more) written notice to do so.^[1]
• If you fall behind on your rent or violate your lease agreement, your landlord may be allowed to provide a shorter notice period to end your lease.
• If you live in a city or state with rent control laws, the landlord may need to give a legal reason to end a month-to-month tenancy.^[2]

The difference between month-to-month and fixed-term leases

If you’re trying to decide which type of rental agreement makes the most sense for your living situation, it may be helpful to take a closer look at the differences between month-to-month and fixed term leases. Below is a side-by-side comparison of these two common types of apartment leases so you can narrow down which option may be the best fit for you.

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Pros and cons of month-to-month leases

Another exercise you should complete before you enter into a month-to-month lease agreement is to evaluate the pros and cons of these types of rental arrangements. For some people, a flexible rental agreement might be a great fit. Yet for others, the drawbacks could overshadow the perks.

Pros of month-to-month apartment leases

Here are some reasons you might want to consider a month-to-month rental agreement.

• More control: As a tenant, you typically have more control over your move out date with a month-to-month lease. Instead of having to commit to a 12-month or longer rental term, you may be able to vacate an apartment without penalty as long as you give the landlord sufficient notice (often 30 days).
• May be furnished: Some short-term rentals include furniture. Depending on your situation, it could be a big plus if you don’t have to worry about moving heavy belongings in and out of an apartment with you at the beginning and end of a short-term rental.
• May be able to convert to a long-term lease: If you lease an apartment and wind up liking the location, some landlords may be willing to let you convert to a long-term lease with more attractive terms. But if you’re interested in potentially upgrading your rental agreement at some point, you should confirm that doing so is an option upfront.
• Bad credit may be acceptable: Renting an apartment with bad credit could be difficult if you’re interested in a traditional lease. (You might find it challenging to rent an apartment with no credit history as well.) But month-to-month leases are sometimes easier to negotiate despite credit problems. After all, if you fail to pay the rent as agreed, the landlord could ask you to vacate the property if you’re not locked into a long-term lease agreement.^[5]

Cons of month-to-month apartment leases

Below are some of the negative details about month-to-month leases you should consider before signing one.

• Landlord could end lease: Month-to-month leases offer you the flexibility to end your rental agreement at virtually any time (with proper notice). Yet depending on rent control laws in your state and city, your landlord might have the option to terminate your lease with a short notice as well—sometimes as little as 30 days or less.
• Higher payments: Often you’ll pay more money for a short-term rental agreement than you would pay to lease the same apartment on a long-term basis.
• Lease terms can change: With a month-to-month lease, your landlord may have the ability to adjust the terms of your lease with little to no notice required. As a result, your payment might increase, you might have to pay more for included utility costs (if applicable), and access to amenities could change as well.
• More wear and tear: In many cases, apartments that host short-term tenants may feature more wear and tear than those that house long-term residents. When there are more people moving in and out of an apartment, there’s more potential for damage.

How to end a month-to-month tenancy lease

Unlike a traditional rental agreement, a month-to-month lease automatically rolls over at the beginning of each new month. As a result, either you or your landlord must typically take action if one of you wishes to terminate the rental arrangement.

As a tenant, the rules are fairly simple. In general, you must give notice according to state law and the terms of your lease agreement to end your lease. Many states require a 30-day notice , but some may let you cancel your rental agreement with more or less notice.^[1]

However, it is important to submit your notice in writing (preferably via certified mail with a return receipt). A written notice may help protect you in case anything goes wrong, such as the landlord trying to withhold your security deposit.

For landlords, ending a month-to-month lease could be more complicated. State and city laws dictate how much notice a landlord is required to give a tenant when terminating a rental agreement. In areas with strict renter protections, you might need a reason to end a lease such as:

• Nonpayment of rent by tenant
• Violation of lease agreement
• Landlord wishes to sell the property
• Landlord or family member wishes to occupy the property^[6]

Next steps

Some landlords may offer you a month-to-month renewal option when your current lease term ends. Or you might be able to find these types of short-term rental agreements on your own if you’re looking for flexible housing options. Yet it’s important to make sure that the downsides of month-to-month leases don’t outweigh their benefits before you commit to this type of tenancy arrangement.

Whichever lease option you choose, keep in mind that rent is likely one of your biggest expenses each month. As such, you may want to consider using this monthly payment obligation to help build a positive credit history if you’re not already doing so.

Rent reporting to one or more of the three major credit bureaus could be especially helpful if you have little to no credit history. Plus, with products like Self’s Lookback* feature, you could get credit for up to two years of past rental history for a one-time fee of $49.95.

No matter how you decide to secure housing, a good credit score has the potential to work in your favor. So, it’s wise to do everything in your power to earn and keep your credit in good shape both now and in the future.

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Disclaimer: This article does not constitute legal advice and is not intended as a substitute for an attorney or law firm.

Sources

1. Nolo.com. “State Rules on Notice Required to Change or Terminate a Month-to-Month Tenancy.” https://www.nolo.com/legal-encyclopedia/state-rules-on-notice-required-to-change-or-terminate-a-month-to-month-tenancy.html
2. Nolo.com. “How Month-to-Month Tenancies End.” https://www.nolo.com/legal-encyclopedia/free-books/renters-rights-book/chapter9-3.html
3. MySmartMove.com. “How Does a Month to Month Lease Work? A Guide for Landlords.” https://www.mysmartmove.com/blog/how-manage-month-to-month-rental-agreement
4. Experian.com. “Can I Break a Lease Early?” https://www.experian.com/blogs/ask-experian/break-lease-early/
5. Avail.co. “How to Pass a Rental Credit Check (+ Tips to Improve Your Credit Score).” https://www.avail.co/education/articles/how-to-pass-a-rental-credit-check
6. RocketLawyer.com. “Ending a Month-to-Month Rental Agreement: How Much Notice Is Required?” https://www.rocketlawyer.com/real-estate/tenants/communicate-with-your-landlord/legal-guide/ending-a-month-to-month-rental-agreement-notice-required

About the author

Michelle Lambright Black is a nationally recognized credit expert with two decades of experience. She is the founder of CreditWriter.com, an online credit education resource and community that helps busy moms learn how to build good credit and a strong financial plan that they can leverage to their advantage. Michelle's work has been published thousands of times by FICO, Experian, Forbes, Bankrate, MarketWatch, Parents, U.S. News & World Report, and many other outlets. You can connect with Michelle on Twitter (@MichelleLBlack) and Instagram (@CreditWriter).

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