Lease agreements are not always for a set period of time, such as one year. Flexible leases offer both tenants and landlords flexibility in terms of an agreement period length. If you’re a tenant or landlord, it’s important that you weigh the advantages and disadvantages of flexible lease agreements before signing!
What is a Flexible Lease?
A flexible lease, or short-term lease, allows tenants to move into a commercial or residential rental space for less than a full year’s time. Flexible leases can include month-to-month leases, leases that can transfer from one apartment to another, school year leases, summer leases and other short-term leases. The duration of the agreement is mutually decided by both the landlord and the tenant.
Pros of Flexible Leases
Flexibility
One of the main advantages of signing a flexible lease is having the ability to move out quickly, as long as the landlord is given proper notice. If you don’t want to make a long-term commitment to a space, a short-term lease agreement is ideal for you. If you decide the particular location isn’t right for your business or if you find a new job elsewhere, you have the option to leave without violating the terms of your lease.
Landlords that are looking to sell their property or occupy it themselves in the future may also find flexible lease terms attractive.
Faster Move-In Process
Flexible rental agreements are typically less complex than long-term agreements, which speeds up the move-in process. If you need space to live or set up your business quickly, a flexible lease may be a good option.
Cons of Flexible Leases
Higher Rent
Flexible leases typically equate to higher rent prices than long-term leases, due to the risk factor for the landlord. However, the landlord benefits from higher rent payments. In fact, since the rent amount is only fixed for the short term period, the landlord has the ability to increase the rent each time the lease renews.
Unexpected Termination
A flexible lease gives both the landlord and tenant the ability to terminate the lease quickly. This uncertainty makes it difficult to plan for the future. The tenant would be forced to quickly find a new home, while the landlord would have to find a new tenant before losing money on the space.