What is a Month-to-Month Lease?
"Month to Month Lease" is simply a rental agreement with no fixed term, meaning the tenant does not have to pay rent for a specified time period. Instead, the tenant agrees to pay rent until they decide to either move out or sign a new rental agreement. In other words, the agreement will not end until one party "decides" to terminate the lease.
That said, landlord-tenant laws in Ohio do not generally allow for an open-ended lease term. By Ohio law, tenancies at will are not enforceable.
Likewise, landlords in Ohio no longer have the right to evict a tenant at will, as historically provided in English common law, without a specific notice and explanation. More specifically, under Ohio law, and as articles I and II of the Ohio Constitution put forth, a tenant at will may only be removed for "good cause".
Instead, Ohio now deems month-to-month leases as open-ended "Periodic Tenancies" and requires both parties to provide written notice of any terminations in most circumstances. Tenants must also provide adequate notice of any intention to vacate the premises.
Ohio Revised Code ("O.R.C.") §5321.04(A) provides tenants the following notice obligations:
(i) If the lease is month to month, the tenant shall give to the landlord or his/her agent at least thirty days’ notice prior to the termination date of the rental agreement;
(ii) If the lease term is week to week, the tenant shall give to the landlord or his/her agent at least seven days’ notice prior to the termination date of the rental agreement;
(iii) If the lease term is for a period other than month to month or week to week, the tenant shall give to the landlord or his/her agent at least thirty days’ notice prior to the termination date of the rental agreement.
Upon the tenant’s breach of his/her responsibility to provide notice of termination , a court shall consider the tenant’s rent payment overdue by the period that the notice was not given in addition to the subsequent monthly rent due. Notably, O.R.C. §5321.04 (A)(6) may not apply to some leases, as most standard forms of lease adopted in Ohio tend to include their own notice requirements that supersede this provision.
Ohio Revised Code §5321.04 (B) governs landlords, and they must respond with the same respective timeframe (i.e. 30 days; a full month).
Additionally, Ohio’s landlord-tenant statutes (i.e. O.R.C. §5321 et seq.) not only apply to the initial termination of the lease, but upon the expiration of the rent period each month, renewing the parties’ lease. Ohio Revised Code §5321.04 (D) provides the following:
The statutory notice period outlined above is the required notice given and received by both landlord and tenant in a month-to-month lease agreement, however, the parties can of course provide more notice if they so choose.
Understanding when this notice obligation applies is also important. In Ohio, tenants cannot effectively end a month-to-month lease before their initial rent obligation has expired. Moreover, they cannot effectively end a month-to-month lease until they have given their required notice.
The key takeaway here is to be aware of these favorable options available to you. When landlords seek possession of residential rental properties in Ohio, it is not uncommon to see them continue to request month-to-month leases from their tenants. Likewise, landlords oftentimes require month-to-month leases in their residential rental properties after lease terms have expired.
In conclusion, when seeking to make the next move in your real estate properties, always consult these notices and deadlines before terminating the lease, which, in most situations, will be the easiest on everyone involved, with such short notice provisions.
Ohio Laws Regarding Month-to-Month Lease Agreements
Ohio law does not provide its own unique set of laws to govern month-to-month leases. Ohio revised statute section 5321.04 defines any lease agreement that is based upon recurring periodic rent payments as a month-to-month lease. Much like a fixed term lease, a month-to-month lease in Ohio does require some form of written lease agreement. This written agreement should spell out the rights, duties and responsibilities of both the tenant and the landlord.
When a tenant moves into a dwelling unit in Ohio, the landlord is required to live up to certain duties, including:
Tenants in Ohio also have affirmative duties that must be followed, including:
If either party breaches the terms of the written lease agreement, the aggrieved party may bring an action against the defaulting party for specific damages, including:
Ohio law does not specify the amount of notice that must be given by either party to terminate the lease. The notice provided by the tenant or the landlord must only be sufficient to allow the other party time to find other living arrangements or other tenants, whichever applies.
Pros of a Month-to-Month Lease Agreement in Ohio
Our previous article focused on some of the advantages of choosing a month-to-month lease versus a longer-term lease in Ohio. This article will expand upon those advantages and give more detailed information on why a month-to-month lease may be right for you.
Flexibility to Move
If an individual only needs to live in a location for a short amount of time, a month-to-month lease provides that flexibility. While most leases require tenants to stay in the property for the entirety of the lease, a month-to-month lease allows a tenant to end the lease with little notice. For a tenant who knows the current job is not going to be a long-term position and hopes to move when an opportunity opens up, a month-to-month lease is the right choice.
Short-Term Arrangements
Tenants forgo the protection of a traditional lease but maintain their freedom by moving into a month-to-month lease. If a tenant has a position at a company for only a few months but needs to live in the area, a month-to-month lease provides a simple short-term solution whether or not the company pays housing costs.
Ease of Ending the Lease
Both tenants and landlords have the ability to end the rental relationship short of an actual breach. A landlord can end the month-to-month tenancy with a 30-day notice. A landlord must state the reasons for ending the tenancy and provide the tenant with at least 30 days to vacate. A tenant may end a tenancy by providing a landlord with at least 30 days’ notice.
Cons and Considerations
It’s important to consider the drawbacks and challenges that can come with month-to-month lease agreements. Whether you’re a landlord or a tenant, there are aspects of month-to-month leases that may prove to be frustrating. One challenge that often arises for both landlords and tenants is the ability to increase the monthly rent amount. Since month-to-month leases are often more casual in nature than traditional leases, it’s common for the monthly rent amount to increase on a frequent basis. For landlords, this means that they may frequently adjust the rent to meet the fair market value for their area. For tenants, this often means that they may be responsible for higher rent in a short period of time.
Another potential drawback of month-to-month lease agreements is that they do not typically guarantee security of residence for tenants. Instead of the residence being guaranteed for one year or more as it would be with a traditional lease, tenants in Ohio will need to make new decisions about their residence every month. This means that both landlords and tenants may need to make decisions about a new residence every single month.
Further, month-to-month lease agreements do not necessarily require formal renewals. While a long-term lease will often contain language specifying the process for renewal while abiding by state tenancy laws, the language specifying this may not exist in a month-to-month agreement. This means that renewal often happens automatically in Ohio, which can be a source of confusion. These agreements may also create space for misunderstanding between landlords and tenants, which can result in the potential for conflict regarding rent increases, unfair practices, unfair lease terms, unlawful hardships, and other legal violations.
Finally, month-to-month leases may be less predictable for both landlords and tenants. Frequent decision-making on the part of both parties can lead to uncertainty. Further, there is the potential for landlords and tenants to make decisions that are not in compliance with the law. Frequent decision-making in regards to a residence may leave landlords and tenants unaware of their rights under the law, leaving room for violations.
In the end, landlords and tenants in Ohio should consider the drawbacks of month-to-month lease agreements when entering into a new or renewal lease. Understanding your rights under the law will allow you to make informed decisions and live in a legally compliant residence.
How to Create a Month-to-Month Lease Agreement in Ohio
To draft a month-to-month lease agreement under Ohio law, the parties must agree on the following:
• Rent Amount and Payment Terms: The rent amount is the key term in any lease, so when drafting a month-to-month lease you must start with the amount and when it is due.
• Termination Notice Period: The termination notice period is another critical term in a month-to-month lease agreement under Ohio law. In Ohio, if the tenant pays rent per year, you must give thirty days’ notice. If the tenant pays rent per month , you must give three days’ notice. If the tenant pays rent at another time period, such as weekly or bi-weekly, you only need to give seven days’ notice. See R.C. 5321.04(A).
• Written or Oral Lease: A lease agreement can be written or oral. Keep in mind, however, if it is written and the written lease is signed by both parties, you may only modify the lease in writing.
• Changes: All changes to the terms of the lease after it is signed must be agreed to by both parties and properly documented in writing.
Ending a Month-to-Month Lease Agreement
To terminate a month-to-month lease in Ohio either the lessor or lessee must deliver notice to the other party no less than thirty days before the end of the month. The notice can be delivered via letter to the other party by the first day of the month. If the lessor sends the notice the lease then terminates on the last day of the subsequent month. If the lessee sends the notice the lease terminates on the last day of the month in which the notice is delivered. Once given neither the lessor nor lessee can revoke the notice prior to the end of the lease term.
Frequently Asked Questions
Can I Require a Lease Renewal for Tenants at the End of Each Lease Term?
Technically, no. Under Ohio law, the lease must specify the length of the tenancy. For this reason, your month-to-month leases should clearly state that it is a month-to-month agreement, with a provision that either you or the tenant can terminate the lease with a 30-day written notice.
What Happens If I Don’t Enforce My Lease Terms Immediately?
Ohio courts would likely take the position that your failure to enforce one specific provision does not absolve your tenants from their obligations under the lease as a whole. However, if certain provisions of the lease have been ignored in this manner, the tenant may view it as an opportunity to avoid other provisions of the lease so it is best to enforce all provisions of a lease as soon as possible, even when it seems inconvenient.
Can I Keep the Security Deposit After a Tenant Leaves?
Under Ohio law (R.C. 5321.16[2]), you can only keep your tenant’s security deposit to pay for damage they caused to the property or costs associated with unpaid rent. Any other deductions are prohibited.
If I Take a Security Deposit, Do I Need to Place It in an Interest-Bearing Account?
Yes , your tenant’s security deposit has to be placed in an account that pays it interest. This provision applies to any security deposit in excess of $50. (R.C. 5321.16[3])
Can I Sue My Tenant in Small Claims Court?
Yes. In Ohio, tenants and landlords can sue in Small Claims Court for damages, including unpaid rent. Even though there are strict limits on the amount you can sue a tenant for in Small Claims Court, these limits most likely will cover any damage to the rental property or for unpaid rent.
If My House is Torn Down, Can I Terminate the Lease?
A lease can be terminated due to destruction of the premises by a disaster, such as a fire, flood or tornado, if the damaged premises cannot be reasonably repaired within 30 days. The affected party must give 30 days’ notice to the other party (R.C. 5321.07).
How Can I Evict a Tenant Who Doesn’t Pay Rent?
First, serve your tenant with a three-day notice to leave the property. After the notice period expires, file an eviction action in housing or municipal court. If your tenant still does not leave by the court date, you can ask the sheriff to remove your tenant from the property, according to Ohio Revised Code 1923.04.
Where Should I File My Injury Claim?
You should sue your tenant in the county where the incident occurred, where the tenant resides or where the tenant’s assets are located.