month to month leases
What is everyone's opinion of month to month leases? I have a property under conract and one of the tenants, in the most expensive unit, does not want to sign a lease. He has lived there for 5 years on a month to month, and would like to keep it this way.
In the origional contract, I wrote in that the seller had to get this guy under a lease for the deal to work. Since that has not happened, I can walk away if I want. What is everyones opinion on this? I live in Chicago, which has a pretty tough rental market right now and this unit's rent is just under half the mortgage payment.
Thanks for your help!
Ted
Hi Ted,
This certainly would be a judgement call on your part. In my rentals, if a tenant is with me for a couple of years and request that they would like to go on a month-to-month, I usually allow it, because I know their past rental history with me and I feel comfortable with the situation.
If I were buying a property in this situation, I would either make certain that the tenant sign a 1 year lease, or that he be compeletly evicted before I would close on the property. For all that you know, this renter could be late every other month, and the owner may have conveniently forgot to tell you that.
If the owner wants to sell, he should understand you situation, and complete your request to make the transactions go through. If it is a tough rental market where you live right now, it would be a pretty bad deal if you were to buy the property, and your month-to-month tenant move out in 30 days wouldn't it?
If it were me, I would tell the owner that I am still interested in the property, and that I would re-extend my offer, but requirements in the offer must be COMPLETED in 30 days, or my offer would be terminated!
Hope this helps!
BAMZ
in houston, its pretty common that if you are month to month....you pay substantially higher rent than 6/12 lease tenants. if he is paying the same rent as someone on a 6/12 month lease......i would require the current owner to inform the tenant that his rent on month to month would be going up unless he signs a 6/12 month lease. i've seen 100 dollar increases for month to month and heard of 150 dollar increases for month to month. that will discourage month to month renters.
obviously there are legitamate reasons for some month to month....like people buying houses and you could offer alternatives like one time only 3 month lease for home-buyers.
I would say the same on the $100-$150 increase. But if you want to somehow take the middle road in this situation -- make the tenant sign a month to month lease with a 60 or 90 days notice to terminate (for the tenant only -- keep your notice at 30 days). This way he is not extended out for an unreasonable amount of time and you have some additional time to find a renter. If you can't rent it in 90 days -- its not in a very good rental area.
Hi dciolek,
Just curious about your suggestion above. In my state (by law), on a month to month, a tenant only legally has to give me a 30 day notice. I think if I was trying to enforce something that was not legal (to tenants rights), I may get the short end of the stick.
Just out of curiosity, have you successfully completed a month to month lease, with a 60-90 day termincation clause in there for the tenant? If so, let me know how that worked out for you?
Best of Success!
BAMZ
I must admit, I've not checked the "rules" heavily on this -- but I have had leases go month to month with a 60 day notice clause. I've not tried 90 days. I have not had the need (or desire) yet to sign a month to month lease. I will see what the statues say on the legality of the notice term if the lease is currently month to month in Ohio.
Here's the quick check -- accordingly, if a lease goes month to month, the tenant or landlord can terminate with 30 days notice regardless of the lease document. So accordingly, the advice I gave is faulty (at least in Ohio).
Maybe you can talk the tenant into taking a bi-monthly agreement -- or into signing a yearly agreement with a 60-90 day walkaway? Or is this against the rules too?
5321.17 Termination of periodic tenancies; inapplicability where termination based on breach of condition or duty
(A) Except as provided in division (C) of this section, the landlord or the tenant may terminate or fail to renew a week-to-week tenancy by notice given the other at least seven days prior to the termination date specified in the notice.
(B) Except as provided in division (C) of this section, the landlord or the tenant may terminate or fail to renew a month-to-month tenancy by notice given the other at least thirty days before prior to the periodic rental date.
(C) If a tenant violates division (A)(9) of section 5321.05 of the Revised Code and if the landlord has actual knowledge of or has reasonable cause to believe that the tenant, any person in the tenant's household, or any person on the premises with the consent of the tenant previously has or presently is engaged in a violation as described in division (A)(6)(a)(i) of section 1923.02 of the Revised Code, the landlord shall terminate the week-to-week tenancy, month-to-month tenancy, or other rental agreement with the tenant by giving a notice of termination to the tenant in accordance with this division. The notice shall specify that the tenancy or other rental agreement is terminated three days after the giving of the notice, and the landlord may give the notice whether or not the tenant or other person has been charged with, has pleaded guilty to or been convicted of, or has been determined to be a delinquent child for an act that, if committed by an adult, would be a violation as described in that division, then the landlord promptly shall give the notice required by division (C) of section 5321.17 of the Revised Code. If the tenant fails to vacate the premises within three days after the giving of that notice, then the landlord promptly shall comply with division of (A)(9) of section 5321.04 of the Revised Code. For purposes of this division, actual knowledge or reasonable cause to believe as described in this division shall be determined in accordance with division (A)(6)(a)(i) of section 1923.02 of the Revised Code.
(D) This section does not apply to a termination based on the breach of a condition of a rental agreement or the breach of a duty and obligation imposed on him by law, except that it does apply to a breach of the obligation imposed upon a tenant by division (A)(9) of section 5321.05 of the Revised Code.