A lease which can be cancelled at any time without penalty (or without a penalty significant enough to impel continuation). Month to month leases do not fall under the reporting requirements; you simply need to report the rent paid during each fiscal period. Accordingly, you need not enter month to month leases into EZLease. (These leases tend to be very expensive if maintained for more than a few months; often a year’s rent is greater than the cost of the item leased. Sometimes, however, equipment is only available under a month to month lease contract.)
You may recognize a month to month extension of a lease on the Term/Options tab. If you wish to enter a lease that is month to month from inception, create a lease with a term of one month, then enter a month to month extension for following months.
For month to month (also called evergreen) leases where you are reasonably certain that you will exercise one or more renewal options, instead of setting a month to month extension to the original lease, you should create a new lease record with the end date based on your judgment of the reasonably certain holding period.
Entering a Month-to-month lease
Begin by adding a lease with a base term of one month
On the Terms/Options tab, check the "Month To Month At Termination" checkbox, and enter an "End of MTM" date:
Note: If you're unsure how long you'll be in the month to month [Evergreen] period, enter an end date far into the future, and then edit the lease when you know the actual end date.
On the Variable tab, enter the rent amounts for the month to month period(s)
- Click Save
Below is an example Journal Entries report for a month to month lease in EZLease: