Many tenants and landlords prefer the flexibility of rental agreements over leases. While leases "lock in" tenants and landlords for extended periods of time, rental agreements allow landlords and tenants to end their relationship, or change its terms, much more easily.
Rental agreements are binding contracts between landlord and tenant that have a limited duration and that automatically renew themselves unless one party gives a termination notice to another. Rental agreements cover issues such as rent, the number of occupants allowed in a residential property, the type of business allowed in a commercial property and other matters such as responsibility for utilities. The terms of a rental agreement can be changed at any time by the landlord, as long as the landlord has provided written notice to the tenant of the change.
Rental agreements are usually short in duration, providing for weekly or monthly tenancy. Tenants who don't have a lease are typically called "month-to-month" tenants, though rental agreements can cover longer periods of time.
Rental agreements have benefits for both landlords and tenants. Tenants have flexibility in their living arrangements, and don't risk having to pay off a lease if they need to move. Landlords can make changes to rental agreements as needed, and have an easier time requiring an unsatisfactory tenant to move.
Rental agreements are not "free-for-alls." Month-to-month tenants still have rights guaranteed to them by state and federal laws, including the right to notice of tenancy termination, a right to an eviction hearing and the right to privacy against landlord intrusion into her home.
In some states, the amount of notice for tenancy termination, or changes to the lease agreement, are very short. Tenants with month-to-month leases should be prepared for having to move on short notice.