Image by Gerd Altmann from Pixabay
When you rent a house, it is either a lease or a rental. Lease terms are usually year to year, while rentals are short-term – month to month or sometimes week to week. Even though a lease term is a year, lease payments are usually paid every month. In some cases, the lessee may opt to pay the lease in full upfront. While that’s great for the lessor, most tenants cannot afford to do that. In most states, once a lease is up and the tenant continues to stay in the house and pay rent, the lease converts to a month-to-month rental. However, that is not true in West Virginia.
Conversion of Holdover Tenants
In West Virginia, if a lease expires and the tenant chooses to stay on, with the agreement of the lessor, the terms convert to a year-to-year lease. Once the tenant pays that first month after the expiration of the lease, it’s like he or she signed a new one-year lease.
Pros and Cons of the Year-to-Year Conversion
If you prefer to have a month-to-month conversion, make sure you put that in your lease. Otherwise, once the lease ends, the contractual period for the conversion is a year. Like anything, the yearly conversion has its pros and cons.
PRO: Even without a lease, your tenant is contractually liable to continue the lease for another year.
PRO: You do not need to do a lease for the second year, though it is advisable.
CON: If you do not like the tenant, it is harder to allow the tenant to stay an extra month or two months if needed, unless you remember to put a month-to-month clause in the original lease. The tenant could hold you to the year-to-year conversion.
CON: If you decide to sell the property, you have to wait the entire next year to give your tenants notice, unless you remember to put a month-to-month clause in the original lease.
What to Include in a Lease
Many small landlords like to print leases from online sites. When you do, be sure you read every word of the lease, or you could find yourself stuck with tenants who take advantage of situations. Some of the things that you should ensure are in the lease include:
The security deposit amount, and whether the security deposit is held over from year-to-year (it should be).
Late fee amount, and when you charge the late fee, e.g., the 5th day after the rent is due.
Pet deposit amount, or if you do not allow pets, the fees you will charge if you find out the tenant “sneaks” a pet in.
Consequences of sneaking a pet in, whether eviction or other actions, and if you choose to evict, the amount of time the tenant has in the home before you change the locks.
If you allow pets, specify what kind of pets, weight limits and other rules.
Lease renewal options.
Maintenance responsibilities.
When the landlord is allowed to enter the property. A good idea is to allow entry at any time, without notice, for emergencies or to check on the condition of the property if the landlord notices something out of place.
You should always have an attorney review a lease, even if your real estate agent helped you with the lease so that you are not caught in a situation that ends up costing you if you end up with bad tenants.