A month-to-month rental agreement, also known as a periodic tenancy, is one of two main types of rental agreements recognized by Alberta law. This type of agreement has a specific start date but no fixed end date—the lease automatically renews each month until one of the parties provides written notice of termination. For tenants in Edmonton, especially those who are in a transitional period of their lives or value flexibility above all else, understanding the specifics of month-to-month leases is extremely important for making the right housing decision.
Definition and legal basis
The Alberta Residential Tenancies Act recognizes two types of lease agreements: fixed-term leases and periodic tenancies. Monthly leases are the most common form of periodic tenancy, although the law also allows for weekly and annual leases.
In a month-to-month lease, the tenant pays monthly rent, and the lease automatically renews for the next month unless either party gives notice to terminate. This creates a continuous tenancy without the need to sign a new lease each month.
The tenancy month is defined in the agreement between the landlord and the tenant and can start on any day of the month. For example, the tenancy month can run from the 15th of one month to the 14th of the next, rather than necessarily from the first to the last day of the calendar month.
It is important to understand that any lease agreement, whether monthly or fixed-term, is governed by the Alberta Residential Tenancies Act, and if the terms of the agreement conflict with the law, the law takes precedence.
How a month-to-month lease comes about
A month-to-month lease can come about in several ways. The first way is through a direct agreement between the landlord and tenant to enter into a month-to-month lease from the outset of the tenancy.
The second way is a transition from a fixed-term agreement. If the tenant remains in the premises after the end of the fixed-term lease with the tacit consent of the landlord, the lease continues as a periodic lease. If the initial fixed term was one month or more, the periodic lease becomes a month-to-month lease. If the fixed term was less than one month, the lease becomes weekly.
However, it is important to note that in Alberta, a fixed-term lease does not automatically convert to a month-to-month lease upon its expiration unless the lease provides for this or the landlord expressly or impliedly agrees to the conversion. The law provides that the tenant must move out on the last day of the fixed term unless otherwise agreed.
Notice to terminate the lease
One of the key features of a month-to-month lease is the asymmetrical notice requirements for the tenant and the landlord.
The tenant must provide the landlord with at least one full rental month's written notice to terminate the lease. The notice must be given on or before the first day of the rental month. For example, if the rental month runs from the 1st to the last day of the month and the tenant wants to move out on August 31, they must give notice on or before August 1.
The landlord must give the tenant at least three full rental months' written notice of termination of the lease. For example, if the landlord wants the tenant to move out by September 30, they must give notice on or before July 1.
If notice is given late, the lease ends at the end of the next full rental month. For example, if the tenant gives notice on August 5 instead of August 1, the lease will end on September 30 instead of August 31.
Requirements for written notice
Written notice of termination of a month-to-month lease must meet certain requirements. The notice must be in writing, signed by the party giving it, contain the address of the leased premises, and clearly state the date of termination of the lease.
The tenant must deliver the notice to the landlord in person or send it by registered or certified mail. If these methods do not work, the tenant may send the notice electronically if it results in a printed copy being received on the landlord's electronic device.
Verbal notice of termination is not legally valid in Alberta. Even if the landlord has verbally confirmed that they have received your notice, it is recommended that you always have written confirmation to protect your interests.
Rent increases
The rules for rent increases for month-to-month leases are significantly different from those for fixed-term leases. In Alberta, there is no legal limit on the amount of a rent increase—the landlord can increase the rent by any amount.
However, there are restrictions on the frequency of increases and requirements for advance notice. A landlord can only increase the rent once every 12 months — they must wait at least 12 months after the tenant moves in or after the previous increase.
For month-to-month leases, the landlord must give the tenant at least three full rental months' written notice before raising the rent. For example, to raise the rent on September 1, the landlord must give notice on or before May 31.
The rent increase notice must be in writing, signed by the landlord or their agent, and clearly state the new rent amount and the date the increase takes effect.
Advantages of month-to-month leases
The main advantage of month-to-month leases is flexibility. The tenant can move out with only one month's notice, which is ideal for those who may need to move quickly due to work, family circumstances, or other reasons.
Monthly rentals do not tie the tenant to long-term commitments. If you don't like the apartment, the neighborhood, or the neighbors, you can move relatively quickly without penalties for early termination of the contract.
For those who are in a transitional period of their lives — looking for a job, waiting for a visa, planning to buy their own home — monthly rentals provide the necessary freedom to maneuver. You don't risk being locked into a year-long contract when your circumstances may change.
Another advantage is protection from eviction. The landlord must give you three months' notice before they can ask you to leave, while you only need to give one month's notice. This gives you more time to find a new place if the landlord decides to terminate the lease.
Disadvantages of month-to-month leases
The main disadvantage of month-to-month leases is higher cost. Landlords typically charge higher rent for month-to-month leases compared to annual leases—the difference can be anywhere from $50 to $120 or more per month.
Instability is another significant disadvantage. Although the landlord must give three months' notice, they can still terminate your lease without explanation. This means less certainty in long-term housing.
With a month-to-month lease, the landlord can increase the rent every 12 months by any amount. Unlike a fixed-term contract, where the rent usually remains stable throughout the term, with a month-to-month lease, you are more vulnerable to market price fluctuations.
Month-to-month leases may also be less attractive to landlords. Some landlords refuse to offer monthly leases altogether, preferring the stability of annual contracts. This may limit your housing options.
Comparison with a fixed-term lease
Understanding the differences between a monthly lease and a fixed-term lease will help you make the right choice.
| Feature | Monthly lease | Fixed-term lease |
|---|---|---|
| Duration | Indefinite, renewable monthly | Fixed start and end dates |
| Flexibility of departure | High (1 month's notice) | Low (penalties for early termination) |
| Rent | Usually higher | Usually lower |
| Price stability | May increase annually | Fixed for the entire term |
| Protection from eviction | Landlord gives 3 months' notice | Cannot evict until the end of the term |
A fixed-term contract is better suited for those who value stability and predictability. The landlord cannot increase the rent and cannot demand that you move out before the end of the term (provided that the tenant complies with the terms of the contract).
Month-to-month leases are better suited for those who value flexibility and may need to move quickly. However, this flexibility comes at a price — both literally (higher rent) and in terms of less stability.
When to choose a month-to-month lease
A month-to-month lease is the best choice in several situations. If you have recently moved to Edmonton and have not yet decided on a neighborhood or job, a month-to-month lease will allow you to explore the city without long-term commitments.
If your work situation is unstable—you are expecting a transfer, looking for a new job, or working on a contract—month-to-month leases will provide the flexibility you need.
For those who are planning to buy their own home in the near future, a month-to-month lease will allow you to move out quickly when you find the right property to buy.
If you are unsure about your plans for the coming year or your life circumstances could change significantly, a month-to-month lease minimizes your risks.
When to avoid monthly rentals
In some situations, a fixed-term contract is the better choice. If you have a stable job and plan to stay in Edmonton for a long time, an annual contract will ensure lower rent and stable conditions.
If you are budget-conscious and want to minimize your housing costs, the $50-$120 per month difference between monthly and annual leases adds up to $600-$1,440 per year — a significant savings.
If housing security is important to you and you don't want to risk receiving a three-month eviction notice, a fixed-term lease will provide greater protection.
Switching between contract types
In Edmonton, it is possible to switch from one type of contract to another. If you have a fixed-term contract and want to switch to a month-to-month lease after it expires, discuss this with your landlord in advance.
Some fixed-term leases include a provision for automatic conversion to a month-to-month lease at the end of the term. Read your lease carefully to understand what happens when it ends.
If you have a month-to-month lease and want to switch to a fixed-term lease for lower rent and more stability, you can propose this to your landlord. Many landlords will welcome this proposal, as it provides them with guaranteed income.