What is the Difference between a Fixed-Term Lease and a Month-to-Month Lease?


There two basic lease agreements when renting an apartment; a fixed-term lease or a month-to-month lease. Prior to signing any lease, you should decide which lease agreement is best for you. The positives and negatives of both lease types are explained below.

Fixed-Term Lease

A fixed-term lease is the usual rental lease agreement. Most fixed-term leases are for one, but sometimes two years, and can be longer or shorter depending on each unique circumstance. Occasionally, a fixed-term lease might be an odd number of months. If an apartment unit has been uninhabited for a period of time, the landlord may want to get your lease on track with the other tenants in the building. Another reason for an odd number of months in a fixed-term lease is when the lease expires during peak apartment-hunting seasons, like the summertime. When you sign a fixed-term lease, reach the expiration date, but still want to occupy a unit, many landlords will allow you to transition to a month-to-month lease agreement opposed to signing an entirely new fixed-term lease.

Month to Month Rental Agreement

Month to month rental agreements appear as a very short fixed-term lease, but there is one major difference. Month to month rental agreements automatically renew unless you or your landlord gives a notice that it is to be terminated. Before you plan to vacate an apartment in a in a month-to-month rental agreement, there is usually a required amount of notice time to allow the landlord to find a new tenant. Most apartment units require a thirty to sixty day move-out notice; however ninety to one hundred twenty day move-out notice is not uncommon. The greatest edge of a month-to-month rental agreements is the freedom it provides you. If you take a new job in a different city, you don’t have to worry about breaking a lease. The biggest negative to a month-to-month rental agreement is that the landlord has the same power as the tenant to cancel the lease, which means you might end up with thirty days to find a new apartment, move yourself out of your current one, and move yourself into the new spot all while having to pay first month’s rent and security deposit for the new place.

Which Type of Lease Agreement Works for Me?

Deciding between a fixed-term lease or a month-to-month rental agreement comes down to two things; would you prefer freedom or security? A month-to-month rental agreement gives you the ability to leave whenever you or the landlord want while a fixed-term lease gives peace of mind knowing that you have a space for an agreed upon duration of time. If you think you will need to move for work, a month-to-month lease agreement might be the best choice for you. If you know you want to stay in the same place for some time, then a fixed-term lease will offer you the stability you are looking for. Upon completion of a fixed-term lease, your landlord may give you the option to continue the lease on a month-to-month agreement, providing you the best of both worlds.


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