My wife and I are currently in the process of renting out our first place. We have chosen an out of province couple who we feel meet our requirements. They are a younger professional couple. we have told them a month to month tenancy would be fine with us as their is more control for the landlord should any problems arise (I think). They are insisting on a one year lease which I actually find rather odd. Should I be concerned? Any input would be appreciated. Thx.
Wants a Lease
- Thread starter tailedger
- Start date
- Joined
- Sep 10, 2007
- Messages
- 121
Not sure where you are renting this property but I would not do a month to month lease as you are required to give 3 months notice if you want to get rid of them. It is much better to do a fixed term lease. If you are unsure about them start with a 3 month lease. That way you can tell them you are not renewing the lease or if you like them you can renew for a longer term.
Generally I prefer 1 year leases as you are not constantly looking for new tenants. The key is to screen them properly so you know what you are getting into.
Brenda
Generally I prefer 1 year leases as you are not constantly looking for new tenants. The key is to screen them properly so you know what you are getting into.
Brenda
- Joined
- Dec 14, 2013
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- 980
Month to month leases and fixed term leases each have their own unique disadvantages.
With a month to month lease you have much less certainty in planning the future income of a property. This may not be such a big deal when you own a building with 20 suites but when you only have one property with one income stream this can be a big problem. Suite turnover can be a problem too as there is nothing you can do to recover lost rent if you need to clean the suite or repair it after the tenant leaves. Sure you can recover the cost of the fixes from the DD but you have lost that time-money that it could have been rented. Plus you spent a bunch of time and money advertising and showing the suite. A month to month lease can be convenient for a landlord who has indeterminate plans in the short term or who is seeking a higher rental rate.
A fixed term lease is useful in that you have locked-in the tenant for that period of time...sort of. The tenant can take off on any day of the week, zero notice and you will still be required to rent it out as soon as possible. You have a duty to mitigate and get the place rented as fast as is reasonably possible. Sure, they are "on the hook" for paying that rent, but if someone is skipping out on rent, it is because they are broke (usually). Can't get money from a stone. Plus a fixed term lease could lock you into a relationship with a professional tenant. There are endless ways a professional tenant can harass a landlord and abuse the system. A pro can bully you around and under a fixed term you will have no choice but to put up with it or sell the property.
With a month to month lease you have much less certainty in planning the future income of a property. This may not be such a big deal when you own a building with 20 suites but when you only have one property with one income stream this can be a big problem. Suite turnover can be a problem too as there is nothing you can do to recover lost rent if you need to clean the suite or repair it after the tenant leaves. Sure you can recover the cost of the fixes from the DD but you have lost that time-money that it could have been rented. Plus you spent a bunch of time and money advertising and showing the suite. A month to month lease can be convenient for a landlord who has indeterminate plans in the short term or who is seeking a higher rental rate.
A fixed term lease is useful in that you have locked-in the tenant for that period of time...sort of. The tenant can take off on any day of the week, zero notice and you will still be required to rent it out as soon as possible. You have a duty to mitigate and get the place rented as fast as is reasonably possible. Sure, they are "on the hook" for paying that rent, but if someone is skipping out on rent, it is because they are broke (usually). Can't get money from a stone. Plus a fixed term lease could lock you into a relationship with a professional tenant. There are endless ways a professional tenant can harass a landlord and abuse the system. A pro can bully you around and under a fixed term you will have no choice but to put up with it or sell the property.
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- Oct 26, 2016
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There is nothing to be concerned about. Annual agreement could be beneficial for you as well. If you have a moth-to-month lease you landlord can raise the rent once he wants it. Of course he has to give you notice before rent increase. But, if you have an annual agreement, landlords won’t be being able to raise rent but once a year.
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- Aug 30, 2007
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Rents cannot be raised annually beyond certain amounts in rent controlled provinces. The BC loophole of threatening to cancel an annual lease or signing this here new much higher lease will likely be closed in 2017, before the election !
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- Oct 22, 2007
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- 2,798
In some provinces, it is extremely difficult to terminate a periodic (month to month) tenancy. In Alberta, unless there are substantial breaches to the lease, a landlord may only terminate a periodic tenancy if he or his family wants to occupy the property or if the property is being sold, demolished, or substantially renovated (365 days' notice is required in this case).
I only use fixed-term leases for that reason and so I may better schedule tenancy turnover.
Agree with the above posters. A fixed term lease, in Ab gives you more control. Try a 6 mos trial lease if uncertain, then extend to one year. If you do your homework in the tenant selection process, you should be ok. I think tenants are also looking for certainty when they ask for a one year lease, and that's typically what I want as well.