Don't Let Non-Lease Tenant Decide When to Give Notice

While many commercial leases are for several-year terms, it might behoove you to agree to a month-to-month tenancy with a tenant. Month-to-month tenants can be part of a strategic plan for your property, especially if you have spaces that you’d like to collect rent for in the short term while looking for longer term tenants. If you rent a space on a month-to-month basis to a tenant without a lease, don’t take termination of the tenancy less seriously than you would for a long-term lease. In either scenario, it’s important to have notice ahead of time because the result is the same—you’ll need to line up a new tenant and make arrangements to perform any repairs, remove equipment or fixtures, and plan improvements.

So spell out for the tenant that it can’t pick up and move just because this is a less restrictive deal than a lease in terms of being locked in for a lengthy period. Include in your agreement with the tenant the requirements for advance notice of its intent to vacate—and any penalties for failing to comply. In these types of arrangements, statutory requirements sometimes apply. Touch base with your attorney to make sure that your termination requirements are in sync with applicable statutory guidelines.