We currently lease our house to tenants. It is a yearly lease.
The tenants now ask our real estate agent (who help manage our property) to see if we would allow them to change the yearly lease agreement to a month-to-month lease agreement. But the original lease will not be up half a year from now. They seeem to request to change the lease to month-by-month almost immediately, starting the beginning of next month.
The reason for this request is that they said they want to find and buy their own house.
We think this request is odd, especially when they request the change of the leasing term starting early next month, while the original lease term will not be up for half a year.
We think we could give them some break in the last 3 or 4 months of the original lease term, but not now.
Do you think we are reasonable? We are aware that they may want to move during the summer break so we think we will do them a favor if we allow them to leave a few months earlier. But it is unreasonable to change the lease term immediately like this in the middle of the yearly lease, I think.
They have been relatively good tenants. So we are willing to reach a compromise that is acceptable to both them and us.
So, they are only 6 months into 1 year lease and they want to back out? You can’t blame them for asking but the request is pretty presumptuous. Right now, all you get out of the new deal is monthly worry about when you have to find new tenants.
Personally, I would ask for a rent increase if they want to change to month to month.
Is this their first lease year, or have they renewed the lease multiple times? If my tenant was in their 4th year, that might be a different situation,
I was on the tenant side of this one time. Wanted to have the ability to give 30 days notice if I found another place to live. What the landlord proposed in return was quite fair. Gave me two choices - increase rent by 25% to offset the early termination or be willing to pay rent until a new tenant is in place. At the time, good rental single family houses were hard to find in our area, so I took the chance on a new tenant and someone moved in a few days after I moved out.
Lots of good suggestions. Agree that if they have been longtime tenants, you can consider a counter proposal like the one DecideSomehow suggested. ITs hard to get someone to pay once they have moved out, so unless you really trust these tenants, that would be risky. And month to month leases are commonly at a higher rent amount than annual, since you are taking all the risk. Have they already started looking for a place to buy? If so, their timeframes may be shorter. If not, it could take them a few months to find and close on a house anyway. So you could offer to start a month to month in, say April, with a 30% increase in rent at that time. You likely already have their last month’s rent as part of their deposit, and you don’t want them to trash the place when they leave, so considering a compromise is reasonable-- if they have been tenants for more than a year. If this is their first year in the property, I’d not be flexible.
One of my kids has a rental. If he rents month by month…the rent is 25% higher. Propose that to your tenants…with an increased deposit as well. And I would ask for 60 days notice.
Would they be interested in buying your house…since you don’t know if you wil ever move back there?
All excellent thoughts. Bottom line, you are in the driver’s seat. They have a signed lease. Any compromise you make is out of your kindness, sine they are asking to be let out of their lease.
No, I don’t think their request is unreasonable. If it were a demand, then yes, I’d say so, but not a request. Laws in my state permit 2 parties in a contract to re-negotiate at any time, but do not require them to do so.
Agree that IF you are willing to amend this lease down to a month-to-month, then you are giving up what should be a year’s promise of income. You should receive something in return for giving that up, usually a higher rent per month.
And you do know a month-to-month does not mean exactly 30 days, right?
As a landlord, I would say absolutely not (in a nice way), unless they were long term tenants that I liked a lot, because I’m a sucker. It sounds like they’ve only been there for six months? You would not have rented to them under these terms, and now they want to change it. I would suspect that they have something in mind, and are going to give you notice as soon as you agree to it, so you’d only get a higher rent for one month (if you asked for that in return).
I would say that after the year is up, I’m willing to go month to month, but before that…we follow Washington State law. That is, if they break the lease, they continue to pay, however, I must make a good faith effort to get a new tenant, and when I do, they don’t have to pay. That way, you aren’t stuck, but if the house rents easily, neither are they. We broke a lease in Washington, and agreed to continue paying for the next 8 months till they found a tenant. We were concerned about paying so much, but we cleaned the house well and told them to please show it any time. They rented it the day we moved out, and we didn’t pay one extra dollar. Neither party was at a loss.
In my state, for LL 's it is recommended we use the phrase a month’s notice, rather than saying 30 days notice.
If rents are due on the first(usually are) then giving notice the tenth of a month to the tenth of the next month might be 30 days, but it is NOT a month’s notice.
Many people get confused on this. I must disagree w thumper, you do not want to specify 30 days notice. There can be a difference between a “month” and “30 days”. A landlord gets more protection saying a month’s notice than by saying 30 days notice, and after all, we are discussing a m2m lease.
Look on any yearly calendar. Look at the month of Jan, or Feb, or March, etc. Does a month begin on the 5th? the 10th? No. It begins on the first, and ends (usually) the 30th or 31st. The 10th to the 10th might be 30 days, but it isn’t a month. I can post the legal explanation of the difference if anybody wants to see it.
Another variable that might impact your decision is whether or not you paid the real state agent a commission to rent the home. Paying a one month fee in a year’s lease is one thing, but paying the same amount on a shorter lease is quite another.
Maybe you propose that they pay the cost of securing a new tenant.
In my state, if they break a lease, they are required to pay the cost of securing a new tenant. It is very uncomplicated to just follow the law. Though actually, since all of our tenants are fairly long term and we rent for way under market, we would probably let them out immediately since it would be of benefit to us. At this point, most are in month to month anyways. We could then rent to new tenants at $400-500 more, with little time empty. However, it’s effort to clean, advertise and show the places.
A new tenant, however, trying to change the deal, I would not have much sympathy for. The landlord shouldn’t get stuck with the hassle and additional costs, especially if the leasing agent charges extra.
I don’t see why asking this is “unreasonable.” They want to buy a place, they asked. You are well within your rights to say “no” or any suggested variation on the above.
Going month to month benefits the tenant both if they find a house before the lease is up, and after (it is not impossible to think that it may take them more than 6 months to find a house, get financing and close on it). If you decide to amend it to month to month, I think raising the rent makes sense, because it can be likely that if in fact they leave early, it might take you a while to find another tenant, so the extra rent is to help cover that. You also if you think it would be easy to rent it,modify the lease that they have to give you 2 months notice once they found a house to give you time to find a new tenant.
Firstly, a month to month tenancy (also known as a periodic tenancy) is an agreement between a landlord and a tenant to rent an apartment from one month to the next, rather than for a set period of time. Month to month tenancies can arise from the start of the relationship between the landlord and tenant, or they can also arise when the lease between the parties expires and the tenant remains in the property and the landlord continues to accept rent.
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 prior to the periodic rental date.
This means that 30 days notice must be given from the periodic rental date, which is the date upon which you must pay your rent. Usually this is the first of the month. So if the landlord gives the tenant notice of termination on July 15, then the thirty days does not begin to be counted until August 1, and the tenant may remain in the apartment (and must pay rent for the apartment) until August 30.
Similarly, if a tenant wishes to terminate a month to month tenancy, then the tenant must give 30 days written notice from the periodic rental date. If rent is paid on the first of the month and the tenant wishes to end the tenancy on the last day of September, then the tenant must give written notice to the landlord on or before August 31 (the tenant should make sure the written notice is in the hands of the landlord on or before Aug. 31). If the tenant gives written notice on September 14 then the tenancy ends on the last day of October and the tenant owes rent for the months of October and September.