Know your lease or pay the price
Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series. Sam has some details for renters who plan to buy, like J.
It is amazing how many tenants do not understand the terms of their lease and how to legally terminate it.A lease is a contract that defines the terms of the business relationship between the tenant and the landlord.
Before committing to buy, a tenant should understand their lease. Failure to abide by its terms can cost thousands of dollars.Most leases begin on the first of the month and end on the last day of the month, but it is possible to have a lease that begins on any other day of the month. For example, a “monthly” lease that begins on the fifteenth day of the month would end on the 14th day of the following month.
There are different kinds of leases. Here is brief discussion of the most common types of residential leases:
- The “fixed term” lease is written for a very specific rental period and does not renew. It terminates at the end of the rental period. The most common rental period is one year, but leases can be written for a rental period of any length. Renewal must be in writing or the tenancy arrangement becomes a “tenancy at will”, described below.
- The “self renewing” lease is also written for a specific rental period, but automatically renews itself for another period of the same length if no one (either tenant or landlord) notifies the other party that they want to cancel the lease. These leases can renew for one year (or rental period) or may automatically renew indefinitely unless the landlord or the tenant give notice to stop the renewal cycle.
- The “month to month” lease automatically renews every month. This lease is terminated by written notice, as specified in the lease. This type of lease can also be called a “tenancy at will”, described below.
- The “tenancy at will” is a rental arrangement like the “month to month” lease above, but does not need to be in writing, although it can be. Termination should be one full rental cycle in advance. A full rental cycle means at least one FULL month (or rental period) before the first day that the lease will no longer be enforceable.
The way to terminate a lease is specified in the lease. Since there may be more than one paragraph that details the conditions that need to be met to terminate the lease, tenants should read the entire lease and act accordingly. For instance, a tenant might need to give notice 30, 60 or 90 days in advance. Some leases do not allow cancellation during certain times of the year (usually winter months) without a longer period of notice or a penalty.
PERSPECTIVE:
Tenants looking at homes to buy should review their lease and timing with their buyer’s agent (if applicable) or attorney and should probably have a conversation with their landlord about their plans. Then they should keep the landlord informed about their progress.
It’s a good idea for buyers whose leases are coming up for renewal to try to get a month to month tenancy or include a clause in their lease (or renewal) that allows them to sublet their apartment.
Rona’s notes:
In my experience, it is the self-renewing lease that causes the most confusion. My clients often tell me that they had a lease the first year, but never signed anything after that. They think they no longer have a lease; wrong!
Also, most of my clients are nervous about notifying their landlord until they are sure their purchase can’t fail. At what point did you tell your landlord? How did it work out?
