22 September 2011 ~ 0 Comments

Ontario Landlords: Month-To-Month Agreement or Fixed Term Lease?

If you are a landlord in one of the university towns and cities of Ontario such as Toronto, Ottawa, Mississauga, or London, what are the pros and cons of a month-to-month rental agreement as opposed to a fixed term lease of one or two years.

Image Courtesy: MyTudut

Let us look at the month-to-month rental agreement. This gives a lot more flexibility to both landlord and tenant. One big advantage for the landlord is that if your tenant turns out to be noisy, late in paying the rent, or otherwise troublesome, you only have to wait one month after giving notice before they have to quit.

Another advantage is that you can charge a higher rent for the greater risk and convenience of a month-to-month agreement. And on top of that, you can raise the rent more frequently.

The flexibility of a month-to-month agreement is useful for landlords with student tenants in rentals in Toronto, Ottawa, Mississauga, London, or other towns and cities with sizeable student populations. The short-term leases are suitable for students who live off-campus during term-time and then go home for vacations.

Students, on the whole, carry more risks for property owners than more mature tenants, so a landlord with apartments for rent in Ottawa, for example, would be able to deal with unruly elements more quickly if he or she had month-to-month agreements. This would be a bonus if you found yourself with a bunch of students who give wild parties and could potentially damage your property.

Remember that if you find a really good tenant and wish them to stay longer, you can always negotiate a longer lease.

The major disadvantage of a month-to-month agreement as compared to a lease for a longer period (such as six months, one year, or two years) is that the tenant can leave at the end of any month, usually giving just 30 days notice. This can interrupt cash flow and cost you time and money to replace them.

However, in the case of the landlords with student tenants in rentals in Toronto, Ottawa, Mississauga, London, and other university cities, the advantages of the month-to-month agreement probably outweigh the disadvantages.

Useful Information for Landlords

http://www.ltb.gov.on.ca/en/STEL02_111286.html

http://www.ontariolandlord.ca/forum/

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