For Landlords – What Happens After the Lease Expires?

What Happens After the Lease Expires?

Q: I live in a townhouse and had a lease for the first year. When it expired two years ago, I simply stayed here and continued to pay the rent, as a month-to-month tenant. Management is now demanding that I sign a yearlong lease, and if I refuse, I’ll have 60 days to move.

But I’m hoping to buy a house within the next several months, and don’t want to be saddled with a lease. Can I remain a month-to-month tenant on the grounds that they have waived their right to insist on a lease by allowing me to go month to month? –Tom M.

A: I applaud your creative thinking, and I’m trying to think of a good lawyerly theory that would support it. But try as I Landlord twenant rental lease expirationmight, I can’t come up with a solid argument.

When tenants stay on the property after a lease has expired, they become month-to-month tenants if the landlord accepts their presence (usually by cashing the rent check). In most states, the terms and conditions of the lease carry over to what is now an oral monthly rental agreement.

If the landlord wants to end the arrangement, he must give proper notice (30 days in most states). Landlords who give 30-day notices may terminate for any reason as long as it’s not discriminatory or retaliatory.

When your landlord demanded that you become a lease-holding tenant, he was following the rules just described. I’m guessing that you live in California, which requires 60 days’ termination notice for tenants who have lived on the property for at least a year.

You’ve been given a heads-up that you’re about to get a termination notice, which you can avoid by signing a lease. Without proof of illegal motivation (discrimination or retaliation), your landlord is acting within his rights.

The very reason you want flexibility now is also the reason the landlord wants you locked into a lease. If you buy a house and leave before the lease ends, you’ll owe rent for the balance of the lease, minus the rent that the landlord collected (or could have collected, using reasonable efforts) from your replacement.

As the housing market remains cool, and more renters decide to forsake renting for buying, the number of tenants looking for rentals will shrink, so landlords will prefer to lock tenants into a lease for which they will, at least theoretically, be responsible for the entire rent.

And the unfortunate fact is that the landlord ultimately decides whether tenants are monthly or lease-holding, at least in non-rent-control situations.

By Janet Portman, Friday, June 11, 2010.

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