ABA Family Legal Guide

Renting Residential Property

Renting Basics

Leases

What is the difference between a month-by-month lease and a fixed-term lease?

A month-by-month lease can be written or oral. Rent is payable monthly, and the lease can be changed or ended by either the landlord or the tenant after giving some notice. Usually, notice must be given thirty days in advance. In the notice, the landlord could ask the tenant to leave or pay more rent, or the tenant could inform the landlord of a move. The advantage of a month-by-month lease to tenants is that they can give notice, move, and stop paying rent. Since about 20 percent of all tenants move each year, the ease of mobility can be important. The disadvantage to tenants is that the landlord can raise the rent or otherwise change the rental conditions, such as refusing to allow pets in the future, on short notice. The landlord does not usually have to state any reason for the decision to end the lease or to make changes.

When the lease is for a fixed term, neither the landlord nor the tenant can end or modify the lease before the end of the term without the permission of the other. Fixed-term leases protect landlords from the vagaries of tenants' decisions to move (so long as the lease is supplemented by adequate security deposits) and protect tenants from rent increases during the term of the lease. But month-to-month agreements are better for parties who want flexibility.