A Lease spells out the details of a tenant's unit and living situation. It outlines the terms of the lease. This includes the specific date the lease begins and when it ends. Lease agreements also include the rental rate a tenant pays every month. It also outlines if the landlord requires security deposits, if they allow pets and if the tenant pays any other costs such as utilities or parking.

Most lease agreements are written as a fixed-term lease. A fixed-term lease means a tenant will rent a property until a specific date and the rent will remain the same for the lease period until the lease expires. Most lease agreements are written for one year, so if a tenant signs a lease starting on August 1, it would end on July 31 of the following year.

Is a fixed-term lease better than a month-to-month lease agreement?

A fixed-term lease is different than a month-to-month lease agreement. There are pros and cons to a fixed-term lease versus a month-to-month lease.

Benefits and cons of a fixed-term lease

• The rent amount is the same during the duration of a fixed-term lease agreement. So, once a lease is signed, the rental rate is the same every month until the end date. A rent increase will only occur if a new lease is signed.
• Some landlords prefer a fixed-term lease for commercial leases, too. If a tenant signs a fixed-term commercial lease, the benefit is they know their business will be in that same location and rent for the duration of the lease. Depending on the agreement between the property owner and leaseholder, maintenance costs and even property taxes are the responsibility of the tenant. A gross lease, usually applied for commercial leases, is when a tenant pays a flat fee to use the premises. In this type of tenancy, the landlord is usually responsible for the expenses. This includes property taxes, insurance, utilities or repairs. It's a good idea to seek legal professional assistance when signing a commercial lease.
• A con to a fixed-term lease is when an emergency arises and a tenant needs to move out of the property. State laws may vary. But in general, once a lease is signed, tenants are obligated to cover rent for the duration of that lease. Property owners seeking to sell their property may not want to allow tenants to sign lengthy lease terms. This goes for a commercial lease, too.
• If there is a dispute between a landlord and tenant and the parties can't come to a solution, a tenant might find themselves stuck until the term of their lease ends. This means a landlord can require tenants to continue to pay rent even if there is a dispute, depending on the nature of the dispute. If a property is dangerous or requires immediate maintenance, the landlord is breaking local laws or landlords don't respond, it may be wise to seek legal counsel. In those cases, a landlord might be in breach of contract.

Benefits and cons of a month-to-month lease

• A month-to-month lease doesn't have a definite end date but unless otherwise agreed upon, the lease continues to renew automatically until a tenant, property owner, property manager or a landlord finds it necessary to change the lease terms.
• Since there is no end date to a month lease, a tenant can decide to end a lease at the end of the month with proper notice. Depending on the month-to-month lease, a property manager might allow you to start a lease mid-month and pay prorated rent or end the lease early.
• A con of a month-to-month lease is the rental rate can increase. Unlike fixed-term leases, a rent increase can happen starting with the next month since it's a month lease. Usually, by law, the property owner or landlord must give a 30-day proper notice so the tenant knows how much rent to pay the following month.

A tenuous landlord-tenant relationship does not mean a tenant or the landlord can break a lease. Whether it's a fixed-term lease or a month-to-month lease doesn't matter. Personality clashes aside, once a property manager and tenant lock into a lease agreement, regardless of lease type, you must pay rent and abide by the state laws or the law of your tenancy until the term lease ends.

Do you have to pay rent every month with a fixed-term lease?

Unless other arrangements happened at the time you signed the lease, tenants must pay their rent every month during the duration of their tenancy. This is the case with a fixed-term lease and a month-to-month lease.

Is a rental agreement the same as a lease agreement?

Term lease agreements vary. And while often the landlord decides the type of leases offered to tenants, both parties have to agree to the terms. If a tenant is unsure about a job opportunity or has an emergency and needs a more flexible living arrangement or term length, the tenant may request a rental agreement.

A rental agreement differs from a lease agreement and that difference is on the tenancy period. A rental agreement is usually short term, sometimes as short as 30 days, whereas fixed-term leases apply for longer periods. Sometimes you can find furnished apartments with short leases.

A healthy landlord-tenant relationship begins with good communication. It's best to discuss issues in advance and agree on the specified terms before signing anything.

Usually, a lease term end date is 12 months from the start date. But lease terms can vary based on a number of circumstances. A property owner, for example, may seek to sell an apartment building in six months. He'll do this so the lease terms are shorter than one year. Prospective tenants might want a longer lease if their job requires them to be in place for a while. They'd prefer to lock in a lease without any rent increases for that specified period of time. A landlord may agree to a longer fixed-term lease. It means guaranteed occupancy and the landlord won't need to find a replacement tenant during that lease term.

What is the best lease to choose?

The best lease to choose is based on your current needs. If you know you're going to be in one place for a while, it's smart to lock in a good rate by signing a fixed-term lease. If school, work or family are unpredictable, a month-to-month lease is better so you're not locked into a lease.

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