Estate at will

Often called a “tenancy at will,” this estate occurs when the landlord allows the tenant to possess the real property for an indefinite period, usually until an anticipated event occurs. This is often the type of leasehold arrangement created when the property owner is selling the property, marketing the rental unit to a third-party renter or awaiting a future time when the property owner wants to use the property himself or herself.

For example, the strip mall owner allows Ophelia to place her antique wares in the neighboring empty store while the owner-landlord finds a new tenant. With a tenancy (estate) at will arrangement, Ophelia would have to move out her items as soon as a new tenant is found. Either party can terminate this tenancy with sufficient notice, or upon the death or insanity of either party.

Periodic estate

When the legal relationship between the landlord and the tenant is verbal and essentially unwritten, it is usually as a periodic estate, which is sometimes called periodic tenancy or an estate (tenancy) from period to period. However, the periodic tenancy can sometimes—and probably always should be—in a written agreement.

When no lease agreement is present, state and local statutes govern the landlord-tenant relationship. One of the key statutes that apply especially to periodic estate/tenancy is the notice requirements for termination.

Periodic tenancy continues indefinitely from period to period, and does not end unless the tenancy is properly terminated. Strictly speaking, a month-to-month tenancy begins anew with each month’s rental payment. In fact, however, the tenancy renews and continues even when the tenant fails to make a timely payment.

This restriction, however, is normally a two-way street. The tenant’s responsibility will continue indefinitely unless that tenant formally terminates the tenancy. If a tenant decides to vacate the premise at the end of a paid month, that tenant will continue to be liable for future rent payments if the tenancy has not been terminated.

A late payment does result in delinquency and default . But to terminate the lease agreement, the landlord and/or tenant must provide a proper notice of termination. Each state has its own governing statutes, but most states share similar notice requirements:

• Week-to-week tenancy. The terminating party must give notice to the other party at least one week in advance.
• Month-to-month tenancy. The terminating party must give notice to the other party at least one month in advance. Note that when no tenancy period is specified by either the landlord or tenant, it is assumed to be a month-to-month tenancy.
• Year-to-year tenancy. Although most year-long tenancies are governed by (estate for years) lease agreements, if it is a periodic estate, notice usually must be provided at least three to six months in advance. Again, remember that this tenancy or leasehold estate does not terminate after one year; instead, it renews each year.

If the required termination notice period is not met, the termination notice is effectively void. Note that when the landlord is processing an eviction, most state and local landlord-tenant laws require the landlord to reject any rent payments from the tenant. If the landlord does accept a payment, the periodic tenancy may be reinstated and any eviction attempts would have to be reinitiated.

Estate for years

When lease agreements are used to convey a leasehold estate, the specific leasehold category is normally an estate for years. The estate for years is a leasehold estate set for a definite period of time. Contrary to its name,
the leasehold estate does not require a term of one or more years. An estate for years can have a term of three months, six months, one year, 40 years, etc. The key here is the term or definite period of time. Neither party can arbitrarily terminate the leasehold agreement without cause.

If the tenant continues to occupy or keep possession of the rental property after the end of the lease agreement and no provisions have been made, the estate becomes a tenancy at sufferance. The law usually does not consider the tenant to be a trespasser, because the tenant’s original entry, occupancy and/or possession was legal. The tenant is now subject to eviction. The landlord must take care not to accept any rental payments during this period, as the tenant’s possession becomes re-legalized and converts into a periodic estate, or periodic tenancy.

Note that a one-year lease can turn into a year-to-year periodic tenancy (see below) if the lease has expired and the landlord continues to receive rental payments without indicating the type of tenancy now in effect. This means that the one-year lease is automatically renewed for another year. However, this also goes both ways; if the tenant remains after the one-year lease has
expired, the landlord may be able to hold him or her responsible for another full year. Fortunately, most lease agreements have provisions for such holdover tenancy, normally converting it into a month-to-month tenancy.

If the tenant dies during the term, the leasehold estate continues; it merely passes on to one of the tenant’s heirs, who assume the lessee role. By the same token, if the landlord dies during the term of the lease, the landlord’s responsibilities passes on to his or her heirs, estate or executor.

All states have passed statutes regulating the relationship between the landlord and tenant. When there is no written lease agreement, as in the case of the periodic estate (below), the relationship is assumed to follow all state and, often, local requirements. However, if there is a lease agreement, as with an estate for years, the lease agreement may actually amend such
state and local statutes, if allowed by law.

For example, some states give the tenant full exclusive use of the rental unit. The landlord may not enter the property without the expressed consent of the tenant. However, many written leases often give the landlord the right to enter the tenant’s property without notice for specific situations, such as emergency or to show the property to prospective tenants or buyers.

The maximum term for leasehold estates and agreements is set by each state. Historically, the maximum term for a lease had been recognized as 99 years, the same term that was used for Britain’s lease with China for Hong Kong and Portugal’s lease with China for Macao.