Month-to-Month Tenancies Explained
A month-to-month tenancy, also referred to as a "tenancy at will," is an agreement between a landlord and tenant whereby the tenant rents the premises on a monthly basis. The tenancy continues each month until the tenant or the landlord gives proper notice to terminate the tenancy. Under Arizona Revised Statutes § 33-1375, unless otherwise agreed upon, either party may terminate a month-to-month tenancy by providing written notice at least thirty days preceding the end of a monthly period. This means that if rent is due on the first day of every month, either party may give notice anytime on or before the first day of the month, prior to the end of that monthly period , to terminate the tenancy effective upon the end of that period.
Month-to-month tenancies are created as a result of a lease agreement not specifying the duration of the tenancy. As such, if the agreement does not specify the length of its term, the parties are subject to the statutory provisions governing month-to-month tenancies. Tenancy at will tenancies may be created "by express contract, or be implied by doing some act from which a contract will be presumed, or it may arise from the holding over of the tenant."
While the upside of a month-to-month is the flexibility it provides for short-term tenancies, the downside is often the same reason that the flexibility is desired – the right of either party to give notice at any time to terminate the agreement.
Important Terms in Arizona’s Month-to-Month Rental Agreements
In addition to the law governing the relationship between landlords and tenants, there are several terms and conditions typically found in month-to-month rental agreements such as the following:
• Rent payment – In Arizona, owners can set their own rent payment terms, provided the terms do not violate any Arizona or federal laws. For example, under the federal Fair Housing Act, owners cannot charge rent based on race, color or disability.
• Provisions for fixing and maintaining the rental unit – Also under Arizona law, landlords are required to fit and maintain their rental units, so most such agreements will contain terms concerning responsibility for such repairs and maintenance.
• Provisions for late fees and termination of the lease
• Rules and utilities – Again, most rental agreements will have terms regarding who is responsible for the payment of utilities. For example, the owner may pay water, utility and trash collection.
• Restrictions on pets, smoking and guests – While under both federal and state anti-discrimination laws, owners cannot prohibit disabled persons from having service animals, landlords can require tenants with pets to pay for any damages caused by their pets. However, the precise language determining responsibility and cost for such damages is usually an important part of a month-to-month lease.
Notices Required to Terminate a Month-to-Month Rental
When either a landlord or tenant seeks to terminate a month-to-month lease, there are specific notice requirements that need to be met. The Arizona Residential Landlord Tenant Act requires both the landlord and tenant to give at least thirty days written notice to other parties prior to terminating a month-to-month lease of any residential rental property. Although a thirty day notice is required, if an eviction lawsuit has already been filed, the statute provides that service of the eviction summons and complaint constitutes satisfaction of the notice requirement in order to terminate the month-to-month tenancy. Written notice should be given to a landlord or tenant to the person designated to receive services of process, or left at the leasehold premises. Notice can also be sent via first class mail, postage prepaid. When the written notice is being provided to the landlord, it must be in writing; this corresponds with the requirement that it be sent to the person designated to receive services of process or left at the premises, as opposed to simply having an oral communication. When leaving the notice at the premises, or sending the notice via first class mail, postage prepaid, it is important to keep in mind that it needs to give the house number, if any, and to state its date of expiration.
Arizona Month-To-Month Lease Rights and Responsibilities
The rights and obligations of tenants and landlords for month to month rental agreements in Arizona are generally governed by Title 33, Chapter 10 of the Arizona Revised Statutes, states from which this information is taken. Any specific disputes may require review from an attorney.
Tenants whose tenancy is based upon a lease (rental) agreement, excluding mobile home park leases, are considered in possession of the property and are referred to as "Tenants". In "leasing" or renting a property, an agreement is made for the "lease" of a residential rental property.
TENANTS’ OBLIGATIONS: The Tenant must:
- pay the rent for each rental period as agreed. Rent is paid by all named parties to the rental agreement. Each of the Tenants leaving the dwelling does not terminate the rental agreement with the remaining Tenants.
- keep the rental premises clean and safe.
- dispose of all rubbish, garbage and other waste in a reasonably safe, clean and healthy manner.
- use all facilities and appliances in a reasonable manner.
- not permit any person on the premises with the Tenant’s invitation who willfully, or by his or her presence, act in a manner which disturbs the peace and quiet enjoyment of the landlord or other tenants.
- comply with all obligations under the law and all obligations of the agreement.
LANDLORD’S OBLIGATION:
The Landlord must:
- Maintain the premises, including fixtures, in a fit and habitable condition. This would include common areas, plumbing, heating, cooling, electrical and lighting, appliances, locks and security devices, clean and sanitary in all of its structural components and provides for a reasonable amount of privacy.
- Maintain in good and safe working order all facilities and appliances supplied or required to supply by the landlord for the tenants use or in common use, including elevators, hot and cold running water, reasonable amounts of hot water and heat, if heat and hot water are supplied by or through the landlord.
- Maintain the premises in a fit and habitable condition requires the landlord to:
A. make all repairs and do whatever is necessary to put and keep the premises in a fit and habitable condition, and
B. shall maintain all structural components of the premises in good repair, including, but not limited to, plumbing, heating, cooling, electrical, lighting, and all other facilities, equipment and appliances supplied or required to supply hot and cold water, heat, garbage removal and extermination.
LANDLORD’S RIGHT OF ENTRY:
The landlord shall have the right to enter tenant’s premises, only in the following instances, and only after reasonable notice:
- to inspect the premises;
- to make necessary or agreed repairs and alterations;
- to supply necessary or agreed services;
- to exhibit the dwelling to prospective or actual purchasers, lenders, tenants or workmen;
- in case of emergency; or
- when the tenant is absent from the premises for an extended period.
Arizona Security Deposits for Month-to-Month Tenancies
These security deposits are not subject to the provisions of A.R.S. § 33-1476.
A.Diamond Ridge, LLC v. Roberts held that an agreement to pay a certain amount each month made a tenant a periodic tenant and the landlord did not have to provide the tenant with a security deposit receipt or return the money at the end of the tenancy.
In Diamond Ridge, the tenant and landlord entered into an agreement for the tenant to pay $650 per month as of January 1, 2005. The agreement did not specify a term and no terms were discussed regarding the payment of utilities and other expenses. The landlord cashed the tenant’s checks for rent every month through March, 2005.
In February, the tenant paid the landlord. At that time, the landlord told the tenant to pay rent directly to the entity that provided her utilities. The tenant refused. On March 23, 2005, the landlord sent the tenant a letter saying that she was in default because of the unpaid rent, utilities, and other services. The landlord also stated that she would be taking legal action if the tenant did not vacate.
The tenant filed an eviction complaint on April 7. The tenant claimed that she had immediate rent that was due but the Bank of America refused to transfer necessary funds. The tenant claimed there was a verbal agreement to pay rent. The tenant stated that she offered to place the rent in an escrow account but the landlord refused. She also claimed that the landlord owed her a security deposit of $450. In her reply to the landlord’s response to the unlawful detainer action, she stated that the landlord did not agree to pay her $450.00 or return her deposit. The landlord returned the $450 to the tenant during the hearing . The tenant’s appeal involved not only the handling of the security deposit but also the procedure used to evict the tenant.
The tenant claimed that the landlord was illegally retaining the tenant’s security deposit and that the tenant was entitled to damages equal to twice the amount of the deposit. The appellate court held that the tenant was mistaken. The Court relied on A.R.S. § 33-321. Here the parties had an oral agreement for a monthly lease and the tenant paid rent directly to the landlord. Therefore, the tenant was a periodic tenant. The court distinguished Nelson v. Luster, which involved the application of A.R.S. § 33-1321, on the basis that the statute only applies to tenancy under A.R.S. §§ 33-1314 or 33-1318. These statutes deal with an obligation to pay a security deposit after April 1, 1991. The tenant could not rely on A.R.S. § 33-1321, § 33-1322, or § 33-1324 because the landlord did not establish a security deposit agreement for the tenancy. The court determined that Diamond Ridge did not require security deposits to be placed in an interest bearing account, did not provide obligations for an escrow account, required that unsuccessful collection attempts could be the only basis for the retention of a security deposit, and did not authorize triple recovery. The court noted that if it determined that the tenant delivered a security deposit, the tenant would be able to recover triple damages regardless of the parties’ intentions and an escrow account was required.
The court held the landlord did not violate A.R.S. § 33-1321 or § 33-1322 and affirmed that the tenant was not entitled to a return of the security deposit.
Arizona Month-To-Month Rental Disputes
Disputes commonly arise even during periods of month-to-month tenants. Disputes are commonly over: For disputes related to the payment of rent, Arizona law provides that an eviction action, known as forcible entry and detainer action, may be brought to remove the tenant from the property, assuming the tenant is not within an armed service. (ARS § 33-1413 (1985).) This action may be brought without notice to the tenant unless the rent is due by the terms of the rental agreement within twenty days of the demand for rent. (ARS § 33-1413(B)(4).) If a landlord files an eviction action on the 19th day after the demand is made and secured properly, the tenant may, within 7 days of being served with the complaint by the court, serve and file an affidavit with the court showing it has paid the rent into the court registry and give a demand to the landlord for a receipt for the rent. (ARS § 33-1413(C)(4).) There is no provision for withholding rent for the tenant or withholding of any utilities from the landlord, even if the utilities are included in the rent. Therefore, if the tenant wants to bring a dispute against the landlord for failure to provide the utilities, etc., the tenant must do so independent of withholding rent from the landlord or withholding any utilities from the landlord. Failure to pay any part of the rent for less than a full month allows the landlord to evict the tenant, as that does not constitute a full month’s rent and as real property, cannot be prorated. The Arizona Residential Landlord and Tenant Act provides specific guidelines for return of security deposits which both parties should follow. Failure to return a security deposit in accordance with the law can give rise to a counterclaim for damages. The Arizona Residential Landlord and Tenant Act governs most disputes involving month-to-month tenancies concerning the rights granted to the tenant and landlord and the duties imposed upon the landlord and tenant. However, each case will differ and may require the filing or defence of an unlawful detainer action.
Tenants with a Month-to-Month Rental During COVID-19
The Coconino County Board of Supervisors passed several declarations in response to the COVID-19 pandemic and the governor of Arizona declared a public health emergency. Due to these declarations, Governor Ducey issued Executive Order 2020-14 on March 24, 2020, extending eviction moratoriums for tenants until April 10, 2020. As the COVID-19 situation continues to evolve, the Arizona Residential Landlord Tenant Act, among other laws and regulations may be subject to modification or interpretation in light of this unprecedented situation . For example, further interpretation of the 120 day emergency moratorium on evictions and foreclosures may include the applicability to month to month tenancies. In addition, due to the potential for public meetings to be cancelled and public records to be closed for an extended period of time, the real estate non-judicial foreclosure process may be interrupted.