Month-to-Month Rental Agreements: An Overview
Month-to-Month rental agreements involve a lease for one month at a time. If a tenant continues to pay the rent and the landlord accepts it then a new lease is created for the next month. Month-to-month is a weekly or monthly type lease that continues indefinitely until either party terminates it as the landlord or tenant has every right to terminate a month-to-month tenancy for any reason by giving proper notice to the other party.
The statute defines a month as a calendar month, unless there is a written agreement to the contrary. Therefore, the month begins on a certain date and ends the day before that date in the next month. A week is defined as a calendar week, beginning on the day of the month on which the rent is due, unless there is a written agreement to the contrary . The week starts on a certain day and runs until the day before that date in the following week.
If the rent is not paid on the first of the month, a grace period of five days is provided by statute before the 3-day notice of termination can be posted. The rent must be paid by a designated day during the first five days of the month to avoid a 3-day notice. If the rent is paid on the sixth day, a 3-day notice will not be available until the seventh day of the month. The notices cannot be back dated or post-dated. A 3-day notice of termination for non-payment of rent is required even when the rent is paid but late, and the lease permits a grace period of five days.
Ohio Month-to-Month Lease Features
When renting a property on a month-to-month basis in Ohio, the rental agreement will typically contain certain key elements. The first is the identity of the Parties. The Landlord is the person behind it (that is, the financial entity, whether a LLC, corporation, etc.). The Tenant is the person that will be living in the premises.
Next is the Premises -this is obviously the address of the rental unit. It could be single family home, unit of a two-family building, or unit in a multi-family building.
The next aspect is the Term. In a month-to-month rental agreement (also known as a Tenancy-at-Will), there is no specific time period during which the tenant has any right of possession -it is strictly month-to-month. This may be incorporate by reference to the Ohio Revised Code (R.C. 5321.04B) or listed plainly in the rental agreement itself.
The Rent Payment is another important element. This section will include the amount of rent (typically an amount per month and also a prorated amount for partial months). There will also be a Specification about where the Tenant is to pay the rent. The payment may be made to the landlord in person or by mail, or it may be paid to a property management company or its on-site representative. If it is made to a property management company, the agreement should specify who is the actual owner of the property.
There will also include a Rent Increase section. Both the landlord and the tenant should retain a copy of the rental agreement so that there is reference to the rent increase. Typically, the owner is required to give the tenant 30 days’ notice prior to the rent increase becoming effective. Sometimes, depending on the terms of the agreement, the Landlord may increase rent upon 30 days’ notice (the law does not require a particular form of notice, but requires the notice be in writing, and may be given either in person or by mail).
In Ohio, in a month-to-month rental agreement the security deposit may never exceed the amount of one month’s rent. The return of the security deposit (if any) is governed by R.C. 5321.16.
The Break Clause is another important aspect of the rental agreement. This section of the contract may allow either the Landlord or the Tenant to terminate the rental at any given time by providing a certain amount of notice (e.g., 15 days). If no such provision is included in the rental agreement, then the Ohio law (R.C. 5321.04B) applies -Ohio law requires a 30-day written Notice to terminate.
In addition to these common elements, there are many other aspects of the rental agreement that are frequently included. If the Landlord or Tenant provides utility service, the agreement will specify what utilities are included in the monthly rent and which are to be paid by the Tenant (if any). It may contain references to Conditions of the Plaintiffs (like what type of grass is to be mowed, whether the tenant is to service a furnace, etc.). It may also provide for periodic inspections by the Owner to make sure that the Tenant is protecting the premises.
In Ohio, there is no rental agreement unless there is a meeting of the minds. A prospective tenant completes an application, which includes personal information, criminal history information, financial information and rental history. This application is signed by the prospective tenant (not at the premises), and submitted to the landlord. When the Landlord decides to grant a lease, he approves the application, which may involve a face-to-face meeting with the prospective tenant, and a lease is issued and signed by both parties.
Legal Aspects of Month-to-Month Leases in Ohio
Ohio law requires landlords and tenants to provide written notice of their intent to terminate a month-to-month rental agreement at least 30 days before the last day of the rental period. The rental period must be one of the following: Month-to-month and week-to-week rental agreements may be "oral or written." Good practice is to have a written agreement. It’s better for landlords to have a written lease, especially in Ohio. In the absence of a written rental agreement, there is an assumption that the tenant will pay on a monthly basis, not weekly. No specific statewide disclosure requirements exist for landlords renting a unit on a month-to-month basis. However, a blanket mold disclosure regulation under Ohio Administrative Code section 3701-8-13 applies to any private entity that owns or manages multi-family residential dwellings with seven or more units and does not meet certain specified criteria.
Pros and Cons of Month-to-Month Tenancy
One of the primary benefits for both landlords and tenants of a month-to-month lease is its intrinsic flexibility. For a landlord, it allows him to easily terminate a problematic tenant and free up his property after giving proper notice. For a tenant, it permits him to relocate if he needs to move in order to accept a new job offer in another city or otherwise relocate. Without such flexibility, neither landlords nor tenants can secure a lease and feel safe leasing their property or renting an apartment without the risk that their arrangements may be terminated at any time with very few restrictions.
Often landlords, who are facing financial or other problems or know they will be relocating as soon as their problems are resolved, may wish to enter into a lease with their current tenant and plan to leave the property empty once the lease has ended. Such control over future decision-making confers another large benefit to the month-to-month lease option, in addition to its flexibility.
However, for tenants, there are some significant disadvantages to leasing under a month-to-month lease. First and foremost, it does not convey any security of planning into the future. When a lease is terminated, the tenant must relocate and find new housing. A lease for any other period of time offers much more security to the tenant. If he has children enrolled in a school district that is far from the property, or he is engaged to be married but does not yet have a specific date for the wedding, these and many other factors would weigh heavily in favor of a longer lease with a known termination date. Most importantly, a tenant cannot assume that the rent amount will stay the same. Landlords are free to adjust the rent for the new lease term, which is an additional burden to tenants who are already trying to assess what they can afford when the lease term may be less than a year in the future.
Changing from Fixed-Term to Month-to-Month Tenancy
When you enter into a fixed-term lease, you may have every intention of staying in the property for its duration, but life does not always work that way. You might find a better rental situation or you may want to relocate for employment or family reasons. If that happens, you may want to transition into a month-to-month lease agreement rather than a fixed-term lease. To do this, you must give your landlord at least 30 days’ notice that you will be terminating your fixed-term lease, and would like to transition to a month-to-month lease. Ohio Landlord-Tenant Law allows fixed-term leases to automatically convert to month-to-month leases once the fixed-term period ends. But either party may give notice that the lease will end and that the tenant may continue the lease under the same terms as long as neither party gives the appropriate notice of termination.
The only problem with this process is that once one party provides a notice of termination, that party has violated the lease agreement . This means that even if you’re thinking of converting your lease into a month-to-month lease, you are still required by the lease to give 30 days’ notice of termination and to pay the rental amount in full for those final 30 days. For example, if your lease end date is February 28th and you send written notice of termination to the landlord on January 15th, you still owe rent for the month of February. Once you give notice, the landlord may also provide you with a notice of termination, but it must be sent separately. The same rule applies whether the landlord or the tenant provides the notice. Even though the landlord provided the notice of termination, and you stopped paying rent, you have not formally ended your lease. Because you did not legally break the lease, the landlord may not terminate the lease via a notice of termination. Your landlord will still need to evict you if you refuse to move out once the lease term has ended.
Termination of Ohio Month-to-Month Leases
A month-to-month rental agreement may be terminated by either party by giving at least thirty days prior written notice to the other party. If the rent is due on a day other than the last day of the month, the notice is effective only if given at least thirty days before the date the rent is due. Notice is given on the date of personal delivery, or the date the notice is deposited in the U.S. mail.
For the purposes Ohio Revised Code Section 5321.17, "written" corresponds to the definition of "writing" in section 1.59 of the Revised Code. For example, an e-mail terminating the lease would satisfy the writing requirement. The statute does not distinguish between the parties in terms of the numbering of the 30 day prior written notice of termination of a month-to-month lease. Additionally, the statute does not address the situation where a landlord has waived a provision of a lease requiring notice in excess of 30 days prior to the end of a month-to-month lease.
This statute is primarily addressed to residential leases, however, assuming a commercial lease that is month-to-month and silent on termination of the lease, this statute could apply.
Common Tenant Issues with Month-to-Month Tenancies
Common issues that arise in month-to-month rental agreements include evictions and evictions without a lease, or the unlawful withholding of deposits. All of these issues are typical in Ohio. If a landlord wishes to evict a tenant and has no lease agreement with the tenant, he may issue a Notice to Quit, which is a one-month prior notice to the tenant that the lease will terminate in 30 days. The landlord is then allowed to wait another 30 days before starting the process to eject the tenant from the property. There are ways to shorten the waiting period. First, if the tenant does not pay rent by the fifth day of the month, it is possible that a one week notice will work. Second, if the tenant has exhibited nonpayment history in the past the landlord can move for a 3 day notice and that will work in most cases as well. When a tenant vacates a property, the landlord must return the deposit within a reasonable period of time . If the landlord withholds the deposit for a non-allowable reason, he may be liable for monetary damages as well. Ohio law entitles tenants to receive their deposits during normal and reasonable business hours. A landlord cannot charge a tenant for damages that would be classified as normal wear and tear. Examples of nonnormal wear and tear would include holes in the wall, stains on the carpet, etc. Normal wear and tear would not include worn door knobs, peeling wallpaper, etc. Many times disagreements over possible deductions from the deposit lead to state court actions in order for a tenant to recover the money that was withheld from the deposit. A recent case in the Northern District of Ohio is a good example. In Huber v. Square Y Inc., 2013 WL 5484597 (N.D. Ohio Oct. 1, 2013) a tenant was successful in claiming a refund of approximately $10,000 in an action to obtain the return of an unjustly withheld deposit.
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