Month-to-month leases are governed slightly differently from fixed-term leases
There are multiple reasons why a tenant might have a month-to-month lease. The most common scenario is when the fixed-term lease has expired and the tenant remains in the property. According to the Rental Housing Act, if no renewal has been requested by either party and no notice to quit the premises given by the landlord, the lease automatically rolls over into a month-to-month lease on the same terms and conditions as the expired fixed-term lease. The landlord and tenant may have had a conversation and agreed this arrangement verbally, possibly because the tenant is awaiting a moving-in date to a new home or is unsure of future plans. They may have applied for a job in another town and are waiting on the outcome. In these situations, a new fixed-term lease might not be appropriate.
The converse may also apply: a tenant is new to the area, having relocated for work, and is looking for a home to purchase or a suitable long-term rental, and in the short term just needs temporary accommodation, but cannot be certain of the duration. In this case, a month-to-month lease would be a useful option.
What then happens when either party wishes to terminate the agreement? Section 14 of the Consumer Protection Act (CPA), normally takes precedence over the Rental Housing Act, but does not apply to month-to-month leases.
What the Rental Housing Act says
As stated above, if the tenant occupies the property after expiry of the lease, the tenancy agreement continues as it was, except that the duration of the lease becomes one month. In other words it is now a month-to-month lease. In this case, the notice period for cancellation by either party is one month. However, this does not apply to cancellation due to breach of the lease agreement (e.g. non-payment of rent). Remember, even if no written lease is drawn up detailing the month-to-month arrangement, the terms and conditions of the earlier lease still apply, and therefore any breach of those conditions is legitimate grounds for a landlord to cancel the lease.
What the CPA says
The CPA, more specifically Section 14 of the CPA, requires the landlord to give 20 business days’ notice of cancellation of the lease (effectively a calendar month). But this applies only to fixed-term leases. A month-to-month lease is exempt from Section 14. However, if the landlord is giving notice to cancel due to a breach, then Section 14 does apply, and the landlord must give 20 business days’ notice to remedy the breach. Only if the breach is not rectified in that time period may the landlord begin the eviction process.
If the tenant wishes to cancel the lease, for example if they have found that dream home they were searching for, they must give 20 business days’ notice (one calendar month) to the landlord. If a tenant cancels the lease without giving the requisite notice, they are in breach of the CPA and of the common law. In this instance the landlord may either:
- Accept the cancellation, but hold the tenant liable for the rent until a new tenant is found; or
- Refuse to accept the cancellation and compel the tenant to honour the lease.
With a month-to-month lease the outstanding lease period can’t be more than one month.
Let eviction attorneys help
SD Law is a firm of eviction lawyers who know rental housing law inside and out. We look after the interests of both landlords and tenants. Our priority is upholding the law and ensuring everyone’s rights are protected. If you have a question regarding your month-to-month lease, or any other aspect of rental housing legislation, contact Simon on 086 099 5146 or email firstname.lastname@example.org for a confidential discussion.