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sdlandlady

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Posts: 4
Reply with quote  #1 
I have a small condo that I am trying to rent out, and I am hoping to get a long-term renter so I was intending to require a 1-year lease. However, the two most promising prospects so far have asked if I will do a month-to-month. (One because they are thinking of buying a home soon and don't want to be locked into a lease if they happen upon the right property.) Since none of the other prospective tenants so far looks very desirable and I want to get the unit rented right away to a quality tenant, I'm rethinking my lease requirement. Is this need to fill the vacancy the main reason that other landlords go with a month-to-month versus a lease, or are there other considerations?

OHlandlord

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Posts: 3,734
Reply with quote  #2 
M2M allows either party to terminate at any time by giving notice.  This could leave you with a vacancy in winter.  However, a m2m would allow them out without penalty and you couldn't pursue them for lost rent and advertising.

A lease is supposed to lock the tenant in for a year's rent.  The reality is that tenants still break their leases anyways.  If a tenant breaks a lease in winter, you could still have the vacancy.  You would have to go to court and get a judgment for the lost rent and advertising costs.

Both leases and m2m let you set the terms of the rental.  Lease terms are set for the entire period.  Rent or other material terms cannot be changed.  M2M terms can be changed throughout the tenancy by giving notice of the change.  You can increase rent or change it to no pets in mid-tenancy.

There have been several discussions of leases vs m2m.  Do a search for the posts and read through them before you decide.
haynesm

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Posts: 64
Reply with quote  #3 
Is it possible to have a one year lease with a clause in it that "IF" the tenants find and "buy" a house then you will let them out of the lease.  They don't get out of lease for any other reason. Just a thought.
OHlandlord

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Posts: 3,734
Reply with quote  #4 
You can write an escape clause like that in the lease if you wish.  But make sure it is specific - they may terminate early without penalty IF they write an offer on a house, the sale closes, and they take possession of the new house prior to the termination.  Require proof of closing before you give them a free pass like this.  Many houses on contract fail to close for one reason or another.

Personally, I would just write a short term lease, say 3-6 months, or allow it to go month to month.  I'd charge more for the month to month.  (I don't like escape clauses like this.)

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