Lease agreements have risks for renters and tenants

When it comes to leases, there are two points of view as to what is preferable: those of the owners and tenants.

Let’s talk about the differences and the pros and cons of both views.

When signing a month-to-month lease agreement, the benefit is the flexibility of when tenancy can be terminated. For both landlords and tenants, if there is an issue that is not able to be resolved, a 30-day notice may be given at any time and tenants can leave or landlords can ask tenants to leave. If tenants have been in the property for more than one year and landlords ask tenants to vacate, a 60-day notice is required. Tenants may vacate with a 30-day notice, unless otherwise stipulated in writing. The freedom to go may be right for someone facing a job or life change who doesn’t want to be fettered with a one-year obligation.

Both landlords and tenants face risks with month-to-month agreements. If the landlord wants a longer-term tenant or if a tenant is looking for a more permanent place to call home, a month-to-month lease might not be best. Many renters want the assurance that they will not have to move for a while and landlords want to know that they won’t have to rent the property again and incur the costs of preparing the unit and possible vacancy time.

If you are planning to move or rent to someone, it’s best if owners share their plans for the property and tenants share their future living situation plans. Honesty and integrity is vital. The cost of moving and the upheaval in tenants’ lives can be significant.

I’ve had tenants who have rented on a one-year lease who were offered out-of-state jobs too good to pass up. Our leases state that tenants are responsible for paying rent until we find a qualified tenant, as well as a lease break fee for re-renting. Our experiences have always been positive with these tenants because they kept the place show ready and were always flexible with showing times. We make it a point to find a new tenant as quickly as possible.

A one-year lease gives both the owner and the tenant the security of being locked into the terms of the lease. Renters are aware that their rent will not be raised for at least one year. Owners have the security that someone will be paying them for the term of the lease. When the lease is up, terms such as rent increases and upgrades to the property can be renegotiated.

Tenants should be aware of when their lease is up and have funds saved in case they choose to move. Being prepared is a good feeling.

Whatever type of rental situation you are looking for, whether a one-year or month-to-month situation, make sure you read the contract before signing. If repairs or updates to a property are promised, get that in writing before you sign an agreement. Remember, honesty is the best policy for both sides.

Stephanie Wood is a broker and property management specialist with Preferred Property Management and Real Estate in Ventura. Do you have a question regarding rental property as a landlord or tenant? Send questions to stephanie@gowithpreferred.com.