If you are nearing the end of your apartment lease, you have probably received a letter from your landlord giving you three options: renew your lease for another 12 months, modify your lease to a month-to-month agreement, or move out of your apartment.
There are several key factors to consider when you make a decision about lease renewal. Make the wrong choice and you could find yourself later going through the hassle and financial difficulty of breaking your apartment lease or, even worse, you could at some point find yourself scrambling for a new place to live.
Pros and Cons of Month-to-Month Apartment Leases
While signing a month-to-month lease may cause your rent to go up — some landlords charge a month-to-month fee — choosing a month-to-month lease is the best option for someone who cannot assuredly commit to staying in his or her apartment for another full year.
Unless your landlord charges an outrageous month-to-month fee, you will find that paying such a fee is much cheaper than breaking a 12-month lease. Some tenants mistakenly think that breaking a lease later will be no big deal, but for most landlords it is, indeed. A lease agreement is an enforceable, legal contract. When you sign it for 12 months, you can be held responsible for 12 months of rent payments, whether or not you are actually still occupying the apartment.
There can be a huge financial incentive, then, to sign a month-to-month lease if you aren’t sure where you’ll be in 12 months.
If you simply want some flexibility in your living options, choosing a month-to-month lease offers it. Typically, a month-to-month lease only requires a 30-day notice in writing to your landlord that declares your intention to move out, though you may be required to make your notice effective on the first day of the next month rather than on the day you actually write and send it.
The flip side of this coin is that your landlord also gains some flexibility in a month-to-month lease. He can raise your rent at any time by merely informing you in writing 30 days in advance of the increase. He can also terminate your lease with a 30-day notice, surprising you with an unexpected need to search for a new apartment, according to the legal experts at Free Advice.com. And, unless your contract requires it, he won’t have to give you a reason.
Most landlords, however, won’t randomly terminate a month-to-month lease without a good reason, so if you choose to go month-to-month, make sure you pay rent on time every month and follow all your apartment community’s rules and regulations to avoid being seen as a problem tenant.
Pros and Cons of 12-Month Apartment Leases
While the flexibility of a month-to-month lease makes it an attractive lease renewal option, the 12-month lease in most cases offers the greatest legal and financial protections to tenants who feel comfortable committing to a lease agreement for an entire year.
In contrast to the month-to-month lease, a 12-month lease locks in your rent payment rate for a full year. If a landlord wants to raise your rent, he will have to wait until your next lease renewal date to do it.
It is also much harder, should you go through a rocky patch with your landlord, for him to force you to move out. If you are on a 12-month lease, your landlord will have to go through the court system and actually evict you, and he will have to prove his case for eviction to a judge, who will also listen to any argument you might make against the eviction.
The risk, however, of a 12-month lease is the likelihood that you may want to move out prior to the lease expiration. If this is not at all likely, your best bet is the 12-month lease renewal. If it is likely, and in fact it turns out mid-way through your 12-month lease that you want to leave, you will have to break your lease.
As mentioned earlier, breaking your lease can involve financial penalties — as much as the entire amount of rent owed for the remaining months on your lease. You may also forfeit your security deposit. Some landlords may be willing to negotiate on the financial penalties or other lease terms, but rest assured you will not get out of your lease scot-free.
Other Apartment Lease Renewal Options
You may also be able to negotiate a lease that is longer than month-to-month but shorter than 12 months. A six-month lease, for example, is not common and usually will not be offered as a renewal option, but if you’ve been a good tenant for the past year and always paid your rent on time, your landlord may consider it.
If you know for sure that a six-month lease is exactly what you need — for example, if you will be getting married or graduating from college — don’t be afraid to approach your landlord with your request.
Legal experts, “End of Lease, What Happens?” Free Advice.com
Author experience in rental property management