What is a Month-to-Month Lease?

The most common type of lease you’ll see offered as a renter is a one-year lease, but this isn’t the only option. If you’re looking for a short-term rental, you may be more interested in a month-to-month lease, which would give you greater flexibility in terms of your move-out date than a 12-month lease.

In this article, we break down what exactly a month-to-month lease is, how it works, and to know if it’s the right option for you.

A month-to-month lease is a rental agreement where a tenant signs on to live in a rental unit for an indefinite amount of time. This is slightly different from a one-month lease, which includes a specified end date. Similar to a standard lease, the tenant pays rent monthly and must follow all of the terms of their lease.

Month-to-month rental agreements automatically renew with the same terms each month, unless either the tenant or landlord seeks to change the contract or gives notice to end the contract. Either party will need to give at least 30 days’ notice before ending the lease agreement.

This will depend on your landlord or property management company. If the terms of your month-to-month lease haven’t changed between months, then you will not need to resign the lease. It will automatically renew until either party decides to give notice to vacate. However, with a month-to-month lease, your landlord reserves the right to change the terms of the lease — which includes changing the rent price — every month. If your landlord changes the terms of the lease, then you will need to resign the new lease.

You can end your month-to-month lease by sending your landlord your notice to vacate. Typically, you will need to give at least 30 days’ notice before ending the lease agreement. However, as always, you will need to check the terms of your lease; there may be a clause that requires you to give as much as 60 or 90 days’ notice. Your landlord also reserves the right to end your lease agreement at any time (typically with 30 days’ notice provided to you).

Yes — if your landlord agrees. If you’d like to change your lease from an annual to a month-to-month, then you’ll need to outline to your landlord why it would be beneficial for them to allow you to do so. Because one-year leases provide more stability (and require tenants to pay a lease-breaking fee if they end it early), your landlord may be hesitant to allow you to switch to a month-to-month lease, which would allow you to end your tenancy at any time without paying any penalties. However, if you are a good tenant, your landlord may be amenable to this change.

Keep in mind: One of the major benefits of allowing a tenant to switch from a one-year lease to a month-to-month lease is that it gives the landlord the ability to raise rent on a month-to-month basis. This may be one consequence of a tenant switching to a month-to-month lease.   

Some landlords will also allow you to sign a month-to-month lease after the conclusion of your yearlong lease in the case that you are not looking to sign on for the full next year. This can be helpful for tenants looking to move soon after their one-year lease ends. 

There are many reasons why you may want to pursue a month-to-month lease, despite it being a less stable option. We outline the benefits of a month-to-month lease, as well as the downsides.

Ability to Rent Short-Term

Month-to-month agreements are ideal for renters looking for a short-term lease. If you are looking to rent for under a year, it would be easier to sign a month-to-month lease rather than to sign a lease with a long-term commitment — since, in the latter case, you would need to find a subletter or complete a lease transfer to get out of paying rent for the full year. However, not all month-to-month leases are short term. You can rent on a month-to-month lease over a long period of time if your landlord allows. The flexibility this kind of lease offers is one of its major benefits.

No Lease-Breaking Fees

With a month-to-month lease, you can end the your tenancy whenever you’d like (as long as you give proper notice) — without paying any lease-breaking fees. This is a major difference between month-to-month leases and annual leases, as the latter typically includes terms that would require tenants who vacate early to pay a fee or lose their security deposit.

Less Stable

While the flexibility of a month-to-month lease works in favor of tenants, it also puts them (and their landlords) in a less stable agreement. Because either party can give notice to vacate at any time, the fluid nature of month-to-month leases can also be a drawback. A tenant may have to move out on short notice if their landlord decides not to renew the lease or finds new tenants who they’d like to rent to instead.

Chance of More Rent Increases

A month-to-month lease gives a landlord the opportunity to change lease terms much more frequently than a fixed-term lease. If your lease renews monthly, your landlord can theoretically raise your rent monthly, as well. While this won’t be the case for many month-to-month leases, it’s always an option. Meanwhile, with an annual lease, a tenant’s rent can only be raised once a year.

A month-to-month lease is a rental agreement that renews automatically on a monthly basis, unless either the tenant or landlord gives notice to vacate or wants to change the terms of the lease. It can be a good option for those seeking a flexible living situation, where they won’t be charged for breaking the lease. However, it provides less stability than a long-term lease, as the landlord or tenant can give notice to vacate at any time.