A lease agreement terminates after a specific time period. What if you want an agreement that will not mention the duration? Go for a tenancy at will agreement. It is a lease agreement for an unspecified time. Easier to terminate, this has its pros and cons.
This is a type of lease agreement for occupying a real estate, in which the duration of tenancy is not mentioned. The landlord or tenant can terminate the agreement at any time, by giving a notice of termination (30 days in advance). Remember that this agreement cannot be transferred by the tenant to someone else.
Things To Consider
As a landlord or tenant, you might consider this agreement option for the rental property. As a landlord, you must know that there will be no guarantee of continuity of occupancy with this agreement. The tenant can, at any time, move out of the place.
So the tenant comes into this place and occupies it, without any assurance that he/she will stay there for the following months. So the income generated from the tenant is not guaranteed for a fixed period and you cannot divert it to fixed investments.
Ergo, if you want to ensure that a tenant stays for a specific period of time, it's best to go for a lease agreement for renting a house. A benefit for the landlord getting into this agreement is that he/she can ask the tenant to leave with appropriate notice, anytime.
So, if you are planning to sell the property, this agreement is a good option to go for, which will allow you to have the place vacated and sold, as soon as you find a purchaser. Also, if you feel that a tenant is not trustworthy, it's best to go with this agreement. Later on, if you feel that the tenant is reliable, go for a lease agreement.
Well, if you are entering this agreement as a tenant, you have to think twice. Remember that as you have the freedom of leaving the place anytime, with a month's notice, the landlord can as well ask you to leave anytime.
In a situation where you have just shifted to this place and the owner decides to sell it, you will have to bear extra costs while having to move again quickly. This also includes finding a new place and doing the whole shifting exercise again.
Well, if you want to occupy the property for a short duration, this is definitely the right choice. But in case you want to occupy the property for a longer period of time, it's best to go for a lease agreement spanning 6 months or a year.
The procedure can be a verbal or written agreement. Usually, landlords prefer the verbal agreement, when they rent their property to friends or family members. But a written agreement is definitely a smart thing to do. This will include things like apartment rental amount, due date for rent payment, and other policies like no pet, etc.
To terminate tenancy, the landlord or tenant will need to give a written notice, 30 days in advance. While 30 days is the minimum period, this duration of notice period can vary, as mentioned in the agreement.
With the aforementioned advantages and drawbacks of tenancy at will, you can decide whether you should go for this option. Considering your future plans, you can decide if this is the right type of tenancy agreement for your case.