What is a month to month lease?
A month to month lease is a periodic tenancy: the rental period is one month, and it keeps rolling over until someone ends it with notice. Everything else in the agreement, such as rent, deposit, pet rules and who pays utilities, stays in force from month to month.
Either side can end it with notice, and the landlord can usually change rent or other terms the same way. In more and more states and cities, though, notice rules, rent caps and just-cause laws are taking away much of the landlord’s side of that bargain.
How a month-to-month tenancy forms
A month-to-month tenancy can start in three ways: the parties sign one on purpose, a fixed-term lease expires and the tenant stays while the landlord keeps collecting rent, or the lease never named an end date and rent is paid monthly. The second path is the most common in older buildings, where leases quietly expire and nobody renews them.
State law decides what happens when a lease expires and rent keeps coming in. California Civil Code 1945 presumes the parties renewed on the same terms, for no more than one month when rent is paid monthly. Under New York Real Property Law 232-c, accepting rent after a lease of more than one month expires creates a month-to-month tenancy, unless the parties agreed otherwise.
In practice, if you cash a rent check after a lease ends, assume you now have a month-to-month tenant on the old terms. Not a trespasser, and not a new one-year lease.
How much notice to vacate does a landlord have to give?
The notice to vacate a landlord must give to end a month-to-month tenancy ranges from about 30 days to 90 days, depending on the state and, in some states, how long the tenant has lived there. In several states, notice alone isn’t enough: the landlord also needs a legal reason.
California Civil Code 1946.1 requires 60 days’ written notice from the owner when the tenant has lived there a year or more, and 30 days when it’s been less than a year. The tenant gives notice equal to the rental period, so one month. New York Real Property Law 226-c ties the landlord’s notice of nonrenewal, or of a rent increase of 5% or more, to how long the tenant has been there: 30 days under one year, 60 days for one to two years and 90 days for more than two.
Texas Property Code 91.001 lets either side end a month-to-month tenancy with notice, and the tenancy ends on the later of the date in the notice or one month after notice is given, unless both parties signed an agreement setting a different period. Florida Statutes 83.57 requires at least 30 days’ written notice before the end of a monthly period, a change from the old 15-day rule. Washington tenants give 20 days under RCW 59.18.200.
| State | Landlord notice to end month-to-month | Cause required? | Statute |
|---|---|---|---|
| California | 30 days (under 1 year) or 60 days (1 year or more) | Yes, after 12 months for covered units | Civ. Code 1946.1, 1946.2 |
| New York | 30, 60 or 90 days by length of occupancy | Yes, where Good Cause Eviction law applies | RPL 226-c, RPL Art. 6-A |
| Texas | Later of notice date or one month, unless agreed otherwise | No | Prop. Code 91.001 |
| Florida | 30 days before end of a monthly period | No | Fla. Stat. 83.57 |
| Washington | Depends on the cause; 90 days for owner move-in | Yes | RCW 59.18.650 |
Just-cause laws: when notice alone isn’t enough
Just-cause laws stop a landlord from ending a month-to-month tenancy simply by serving notice; the notice must state a reason the law allows. For an owner of a 5+ unit building, these laws turn a month-to-month tenant into something much closer to a permanent one.
California’s Tenant Protection Act, Civil Code 1946.2, applies once a tenant has lawfully occupied a unit for 12 months. At-fault reasons include nonpayment and material lease breaches. No-fault reasons, like an owner move-in, taking the unit off the market or a substantial remodel, require relocation help equal to one month’s rent, either paid or waived as the final month. Buildings with a certificate of occupancy issued within the last 15 years are exempt, and many cities have stricter local ordinances.
New York’s Good Cause Eviction law, Real Property Law Article 6-A, applies in New York City and in localities that opt in. It exempts small landlords, units with a certificate of occupancy issued on or after January 1, 2009 for 30 years, and units renting above 245% of the county’s fair market rent, among others. Washington’s RCW 59.18.650 works the same way statewide, with 90 days’ notice for an owner move-in. Our landlord tenant law guide and the state pages, such as /california-landlord-tenant-law/, cover each state’s limits.
What is a holdover tenant?
A holdover tenant is a tenant who stays in the unit after the lease or month-to-month tenancy has ended, without the landlord’s consent. The landlord can usually either treat the tenant as a trespasser and file for possession, or accept rent and create a new periodic tenancy.
That choice is the trap. Taking rent after the termination date can create a new month-to-month tenancy and undo your notice, depending on your state’s rule and what you accepted the money for. If you want the unit back, don’t take rent for a period after the end date without a written agreement that preserves your right to possession. Then follow the court process in our eviction process guide; a holdover case still requires a court order, never a lockout.
Holdover rent and double rent statutes
Some states let a landlord collect double rent from a holdover tenant, but only under the specific conditions the statute sets. Elsewhere, the landlord can usually recover the fair rental value for the time the tenant stayed, plus whatever the lease says.
Florida Statutes 83.58 lets a landlord recover possession and double the rent for the period a tenant holds over without permission and refuses to give up possession. New York Real Property Law 229 is narrower: a tenant who gives notice of intent to leave and then stays past that date owes double rent for the time they remain. Many leases also have a holdover clause that sets a higher daily or monthly rent after the end date, so read yours before you decide what to do.
Pros and cons of month-to-month tenants for owners
Month-to-month tenants give an owner more control over rent and occupancy, and the trade-off is predictability. Whether that’s worth it depends on your market, your local rules and your plans for the building.
- Pro: you can move rents toward market faster, with proper notice, instead of waiting for leases to expire.
- Pro: you can clear units for a renovation, a sale to a buyer who wants vacancy or a change of use, where the law allows no-fault endings.
- Pro: you can charge a premium for month-to-month terms, since some tenants will pay for the flexibility.
- Con: any tenant can leave on about one month’s notice, so vacancy and turnover costs can stack up in a bad month.
- Con: in just-cause states and cities, the landlord gets little of the flexibility while the tenant keeps all of it.
- Con: lenders and buyers see a rent roll with many month-to-month units as less certain income, and price it that way.
How buyers value month-to-month units
Buyers value month-to-month units by weighing upside against rollover risk. Units below market can be repriced quickly, but any of them can also go vacant within weeks, and local law mostly decides which side wins.
In a state like Texas or Florida, a below-market month-to-month unit is a near-term NOI gain, because the new owner can raise rent to market with notice. In a California building covered by the statewide rent cap and just-cause rules, the same unit is close to a permanent lease at today’s rent plus the allowed annual increase, so the buyer gets little upside.
Expect a buyer to ask for the rent roll with each lease’s status, the ledgers and tenant estoppel certificates confirming that each tenant agrees they’re month-to-month and at what rent. Our rent roll glossary page shows how buyers read it.
Worked example: pricing nine month-to-month units
Let’s say you own a 24-unit building. Fifteen units are on leases averaging $1,560, and nine are month-to-month at $1,480. Similar units rent for $1,650. Gross potential rent in place is $440,640 a year.
The rent gap on the nine month-to-month units is $170 a month each, or $18,360 a year. At a 6.0% cap rate, that much extra NOI is worth $306,000 if a buyer can actually capture it. Now the risk side: if three of those tenants leave within 60 days and each unit sits empty for six weeks, the buyer loses $6,660 in rent and spends about $3,600 on turnover, $10,260 in all.
Location changes the math. In Texas, a buyer can raise the units to $1,650 with notice and will likely credit you for part of the $306,000. In California, going from $1,480 to $1,650 is an 11.5% increase, more than the 10% maximum allowed under Civil Code 1947.12 for covered units, so the buyer can’t get there in one year and will pay you for much less of the gap.
| Item | Amount |
|---|---|
| Gross potential rent in place | $440,640 |
| Annual rent gap, 9 units at $170 a month | $18,360 |
| Value of gap at a 6.0% cap rate | $306,000 |
| Rollover risk: 3 units vacant 6 weeks | $6,660 |
| Turnover cost, 3 units | $3,600 |
| Total rollover cost | $10,260 |
Managing month-to-month tenants in a 5+ unit building
In a 5+ unit building, month-to-month tenancies work best when you track them as a group, with a written policy for renewals, rent changes and notices.
Calendar every lease expiration and decide ahead of time whether you’ll renew, convert to month-to-month or give notice. Serve state-specific notice forms exactly as the statute requires and keep proof. Treat similar tenants the same way, which also protects you under the Fair Housing Act. If a tenant won’t leave after a valid notice, a cash for keys agreement is often faster and cheaper than a holdover case.
Selling your apartment building to Skyline
Skyline Capital Investments buys apartment buildings with five or more units nationwide with tenants in place, whether they’re on leases, month-to-month or holding over. You don’t need to convert anyone to a new lease or clear units before you sell. We can work with a 1031 exchange timeline or offer seller financing terms.
Send the address and unit count through the form on this page or call (469) 660-2977. We typically respond within 48 hours.
