Advantagse and Disadvantages of Annual and Month-to-Month Leases for a Landlord

There are generally two types of Residential Leases:  Annual and Month-to-Month Leases.   While both are beneficial for a Landlord, our office recommends an Annual Lease.  Therefore, if you are a Landlord and have questions about the type of lease that best protects you, contact the Law Office of Brian P. Kowal, PA.

Advantages and Disadvantages of a Month-to-Month Lease 

Advantages

  1. A Landlord can Terminate the Lease by giving 15 days Notice.  However, notice must be given 15 days prior to the beginning of the next rental period.
  2. A Landlord can remove a problem Tenant.  In other words, if a Landlord has a Tenant that constantly violates non-monetary Provisions of Florida Statute, they can remove them without a reason.  In other words, they can simply provide them notice that the lease is terminated without having to discuss the violations.
  3. Increase the Rent in a shorter time period. Unlike a Annual Lease, you can raise it by giving less than a month’s notice.

Disadvantages

  1. A Landlord has less time to find a new Tenant.  This can result in a loss of rental income.
  2. A Tenant can break the Lease by giving the Landlord 15 days notice.   Unlike an Annual Lease, there is no Liquidated Damages Clause.
  3. There could be more wear and Tear to the property since Tenants move in and out of the property

Advantages and Disadvantages of an Annual Lease 

Advantages

  1. The Landlord has more stability.  They know that the Tenant cannot terminate the lease at the end of the month.
  2. Landlord does not need to spend money trying to re-rent the property after a month.
  3. Usually contains an Early Termination Penalty known as Liquidated Damages.  Therefore, if the Tenant wants to terminate the lease early, they have to pay 2 months rent.

Disadvantages 

  1. If a Landlord does not get along with the Tenant, they will not be able to remove them until the lease terminates.
  2. The Landlord cannot raise the rent during the Lease.
  3. If a Tenant vacates the property and the Landlord is only allowed to rent to one Tenant per year, they are left with a Vacant unit until the Lease Terminates.

Annual and Month-to-Month Leases provide advantages and disadvantages for Landlords and Tenants. However, the Law Office of Brian P. Kowal, PA recommends a yearly lease because it provides more stability for a Landlord.  If you are a Landlord and have questions about month-to-month and annual leases, contact our office at (954) 990–7552.