By, Robyn Latman, Esq. 

Do you cringe when you hear that a tenant’s lease has expired, and the Landlord isn’t doing anything about it? What’s the deal with those expired leases anyway?

In New Jersey, a tenant can remain as a month to month tenant from the date that her written lease expired until the date that she moves out or gets evicted. As a month to month tenant, she is bound by the terms of the last written lease. If you’re wondering about the rent, rest easy. To increase the rent, a Landlord may send a Notice To Quit to increase the rent. This may be done yearly, even without offering a new lease agreement. In effect, the tenant who remains in the unit is accepting a new tenancy at the increased rent. The terms of the new tenancy are defined by the last written lease agreement with the landlord.

So why bother to offer leases to your tenants? Let’s discuss several of the reasons. Landlords should establish, from the beginning of a tenancy, the rules, rights and responsibilities of the tenants. If you don’t allow pets, that will be in the lease. How many people are permitted in an apartment? The lease will list each occupant. When is rent due? To where does rent get mailed? Are late fees added when rent is late? If so, after what date? What about bounced check fees? Who pays for utilities? If a written lease doesn’t specifiy each of these rules, then no such rules exists. You may have heard the saying, “It’s as good as the paper it’s written on.” That applies to leases.

It’s not unusual to talk with a landlord who owns only a few units, and whose leases make no mention of late fees, bounced check fees or attorney fees. When the time comes to file an eviction case against a tenant who hasn’t paid the rent, the landlord is upset to learn that he cannot charge fees when the lease does not specifically mention them. Your tenant just got a pit bull? What does the lease say about pets? Your tenant has three large trucks parked in the driveway? The tenant changed the locks? The mailman seems to be delivering mail for several names that you don’t recognize? Check the leases.

There may come a time when a landlord wants to change some of the lease terms. Occupants may move out or new ones may move in, such as a new spouse or roommate, where space permits. A tenant may get married, get divorced, have a baby or bring home a pet. The landlord has a right to know about each of these events and to include them on a witten lease agreement. For these reasons, a landlord will want to have the tenant sign a new lease each year.

There are other reasons why a landlord may prefer to let the tenants remain on a month to month basis. Do you own a small property with only a few units? Are you thinking that maybe you will want to move in one day? Do you live in a multifamily house and worry that you may not want to keep the current tenants for any length of time? Do you plan to sell an investment property that is three units or less? For these reasons, you may prefer to let the leases expire. Options exist to remove month to month tenants from small properties after their leases have expired.

There are benefits to issuing new leases on a yearly basis, and there are benefits to allowing leases to expire while your tenants remain on a monthly basis. Your situation will determine what makes the most sense for you and for your properties. And now you won’t cringe when you hear of expired leases. Instead, you will know that landlords have their reasons.

Information gathered from this blog post is intended to be educational in nature only and does not replace the advice of an attorney about your specific matter. If you are a landlord of either residential or commercial space, and you are wondering whether you can enforce your lease agreement, collect unpaid rents or remove a tenant who is breaching its lease agreement or the law in some way, please contact this office for additional information. We look forward to speaking with you.