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Tenant gives notice, 12 days later asks to continue month-to-month

I'm trying to figure out if we are going about this in a fair way.  Our tenant has been in our house for over 3 years.  Rent has been paid and there haven't been any major problems.  Tenant has been month-to-month for the last 18 months.  Tenant gave notice that they would vacate the property by December 31 due to buying a house and closing on the 15th of the month.  We asked for firm date of move-out, so we could make final arrangements, and tenant said they didn't know because they hadn't finalized closing, but wanted to know how long they could stay, if needed.  We said we needed firm date for vacating, because we would be making arrangements to travel (not local), inspect, clean/repair, meetings with contractors, and trying to find tenants... all over the holidays.   Annoying, but fine... we have to maintain due diligence with house and tenant.  If tenant wanted to stay additional month we wanted to know before making arrangements. Tenant confirmed (after waiting several days from our initial request for move-out confirmation) on 12/9 that closing was happening on 12/15 and they would be out by 12/31.  Travel arrangements made and paid for, meetings arranged, plans began moving forward on our side to prepare house and get new tenants in as quickly as possible.  Tenant called on 12/12: closing fell through... deal completely off... can they stay on with month-to-month lease?  We are of the opinion that tenant is still obligated to move out so we can get new tenants on year lease.  As far as we are concerned, she could be the 'new' tenant who signs a year lease and we would even allow rate to remain in place (on the low side in our area).  But, if tenant wants to continue month-to-month, we have said that rent will increase for the term and a lease will need to be signed.  Tenant has been given 5 days to give answer as to what they want to do.  As far as we are concerned, tenant has given notice and we are no longer obligated to honor any previous lease aside from the move-out obligations, etc.  We are not obligated to let the tenant stay, right?  If we do allow the tenant to stay, we are not obligated to maintain previous lease terms, right?  Thanks for any help.

This all sounds really fair and the fact that you do have good communication is key! Keep that up. As for the tenant, it is sad that the deal fell through but hey, that is a real possibility when buying real estate.  You are being totally fair and if you can I would say yes get the tenant to sign for the year. If they want to stay month to month that is fair to raise the price and if for some reason they or you need out the month to month provides for that with a simple 30 day notice. On a month to month you are only obligated to give them the proper 30 day notice you do not have to hold to previous terms on the 1 year lease. Good Luck
Thanks for your response. I go back and forth wondering if we are doing this right.  We don't have to give her notice right now to move out since she already told us she was going to leave on 12/31, right?  A tenant can't retroactively say they take back their notice and we are on the hook for dealing with their poor planning?  We are trying to keep communication open, and are making sure to maintain written communication.  Thanks again!
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