Month-to-Month Lease Addendum

A Month-to-Month Lease Addendum is a legal contract that amends a Lease Agreement to either extend or change the lease term to a monthly lease agreement that renews automatically at the end of each month until amended or terminated. Once both parties sign the Addendum, it becomes a legally binding part of the original lease agreement.

Why Use a Month-to-Month Lease Addendum?

• The Tenant is unsure about Their Long-Term Plans – A tenant may request a month-to-month lease agreement because they are uncertain about their future plans. It could be that they may be thinking of moving to another area or putting a down payment on a property and do not want to be locked into another long-term rental agreement.
• Landlord Plans on Selling the Property – The landlord may have plans to sell the rental property soon. Having a month-to-month agreement allows the landlord to continue to collect rental income while having the ability to terminate the agreement in a timely manner when they are ready to finalize the sale of the property.
• Unable to Secure a Long-Term Tenant – The Landlord may have not yet secured a long-term tenant. Signing a Month-to-Month Lease Addendum gives the landlord income while they continue to screen applicants.
• Flexibility for Both Parties – In general, a month-to-month lease agreement gives both parties the flexibility to quickly end a lease agreement for any reason. Whatever the reason, some individuals appreciate the flexibility that is provided by having a month-to-month lease agreement.
• Landlords can Charge Higher Rent – Often, landlords can charge a higher rent for a month-to-month lease agreement. While they don’t have the security of a long-term agreement, some landlords may be happy to agree to a month-to-month lease agreement if it results in higher rental income.

While there are some benefits to a month-to-month lease agreement, a landlord must be aware that they will also have to deal with certain issues. This can include: (1) an uncertain end date; (2) unstable rental income; (3) short notice to find a new tenant; and (4) potential vacancies.

When both parties agree to extend the lease to a month-to-month agreement a landlord should prepare a formal addendum. In addition, all tenants party to the original agreement should sign this addendum. Doing so will help avoid potential legal disputes over the lease term, monthly rent, or any other specific details that were agreed upon between the landlord and tenant.

What to Include in a Month-to-Month Lease Addendum

A Month-to-Month Lease Addendum should include the following:

1. Type of addendum: the opening should indicate that this is an addendum to extend the current lease term to a month-to-month agreement (an addendum can also be issued to change the type of lease term before it expires)
2. Date of the addendum
3. Landlord’s name
4. Landlord’s business address
5. Tenant’s name
6. Tenant’s rental property address
7. Date of the original lease agreement
8. Acknowledgment that this addendum modifies the original lease agreement
9. Include specific information about when the month-to-month lease agreement begins and the terms and conditions of the original lease agreement
10. Rent payment for month-to-month lease and start date for the new payment
11. The type of notice required for either party to end the month-to-month agreement
12. Additional Terms – Our template includes a section if there are any additional terms you want to include in this addendum
13. Landlord’s signature and date
14. Tenant’s signature and date

Just like with the original lease agreement, both parties should have a signed copy of this addendum. The addendum is now part of the original lease agreement and should be kept with it.

When changing the lease term to a month-to-month lease, if there are a significant number of new terms required, the landlord may consider having the tenant(s) sign a new month-to-month lease agreement. This may be clearer than having an addendum addressing several different sections of the lease agreement.

Ending a Month-to-Month Lease Agreement

If you are preparing an addendum to extend or change the lease term to a month-to-month lease agreement you should include the amount of notice required to terminate the lease.

If not included in the addendum, most states provide a certain number of days notice must be provided before either party can terminate a lease. When deciding to terminate a month-to-month lease, both parties are required to comply with these timeframes. See the chart below for your state’s time requirements for sending notice before terminating a month-to-month lease agreement.

Unless the original lease agreement or state law provides a different method, the landlord should send a notice in a way that requires signature confirmation to document its receipt. This can be accomplished by certified mail. Even better, send it by restricted certified mail which requires the tenant to be the only person that can sign for the notice.

What’s Next?

Month-to-Month Lease Terms have some advantages. That being said, they provide uncertainty for both the tenant and the landlord. In most situations, landlords should work with the tenant on securing a fixed-term lease agreement. If they are unwilling, a landlord may have to proceed with terminating the month-to-month agreement and begin the screening process to secure a new long-term tenant.

Additional Property Management Resources

Increase/Decrease Rent Amendment

Simple 1-Page Lease Agreement

Add or Remove Tenant Amendment

Unauthorized Occupant Violation Notice

Property Management Termination Letter

Rental Application Approval Letter

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