A regular reader wrote with a great question, so I thought it would be a great post on what to do when you wish to convert Month-to-Month leases into standard 12 month agreements.
My father owned a 2 story house with an attic and basement. He lived in the attic area and rented the basement, 1st and 2nd story. He recently passed away late 2008 and I have been managing his estate since that time. The middle of last month (March) the estate was finalized and I am now the new owner of the building.
There are currently 3 renters in the apartments however my Dad did not have a lease agreement with the tenants. They have been renting month-to-month. Another fact is that 2 of the renters have dogs.
Now that I am the owner of the building I want to ensure that I am in complete compliance with all the rules and regulations (thanks for all your material) required in the Chicago area.
The first think I want to do is establish lease agreement with each one of the tenants.
- Since they are currently month-to-month do you foresee any issue with me issuing lease agreements since now I am the new owner? How much time to I need to give them to review?
- I would like to indicate in the agreement that pets are no longer allowed. How long do I have to allow them to comply with this new requirement? Or would I have to grandfather the existing ones?
- Do you have any other advise that I may need to consider?
Month to month leases run from the beginning of the month to the end. And the terms can be changed at any time before the next term ends. For example, today is April 8. You could send your tenants new written leases right now, and the terms would apply on May first. You are not required to give any more notice to change the terms of the month-to-month lease than the beginning of the month.
But if you wished to demand that the tenants move, you might be required to give 30 days notice, and you can’t cut a lease term in half. So if you wanted the tenants to move out, you could give notice any time between now and the end of April that the tenants are required to move at the end of May.
Yes, you can tell your tenants that you don’t allow dogs. And you could tell them that the dogs are not allowed effective May 1. In reality, your tenants are probably not going to get rid of their dogs. And if they did, it would take longer than the next three weeks to do so. So you may try one of two options.
- Notify the tenants that you don’t allow pets anymore. Their current pet is "grandfathered" in the lease. But they are NOT permitted to get another pet, or any more pets.
- Notify the tenants that you don’t allow pets anymore, and you want them to get rid of their pet in 30/60/90 days. But there’s a chance the tenant won’t want to give up their pet, and they might move out. That’s a risk.
You should deliver the new written leases as soon as you can. Do so whether the new lease is a month-to-month or a 1-year lease. And include a letter that tells the tenants that their current leases are terminated. And that if they do not return the new written leases, their current leases either (a) terminate at the end of May or (2) the rent goes up by some ridiculous amount of money. You choose one or the other. It doesn’t matter which.