Renters' Guide: Tenants, Landlords and Types of Leases
Before you start renting, it helps to understand the legal implications of how the process works. This chapter will help you do that.
Rights and Duties
A landlord owns real property (i.e., real estate) and rents all or part of it to another party, called the tenant. A lease establishes the relationship of landlord and tenant, and serves as both a conveyance of a possessory estate in real property and a contract between the landlord and tenant. As a tenant, you receive a right to legal possession of the property in exchange for the “valuable consideration” (i.e., rent) you pay to the landlord. A lease typically specifies the duration of the agreement, any terms for extending the agreement and details regarding the payment of rent. (For related reading, see Millennials Guide: How to Read a Lease.)
Because a lease acts as both a conveyance and a contract, two sets of rights and duties arise between the landlord and tenant; namely, the rights and duties that exist in regard to traditional property law rules, and those that stem from the contractual promises of the lease. Many states also have legislation designed to protect the rights of residential tenants, such as the right to fit housing and privacy, and statutes that protect tenants from acts like illegal discrimination and retaliatory evictions. Landlord-tenant laws vary depending on location, so it’s important to check state laws for specific details – you can visit Landlordology for a summary of each state’s laws. (For more, see 4 Things Landlords Are Not Allowed to Do.)
Types of Leases
The amount and type of interest you have in real property is called an estate in land. Estates are divided into two main classifications: freehold estates and nonfreehold estates. A freehold estate involves ownership (e.g., when you buy a house), and a nonfreehold estate is any interest that’s less than a freehold estate – for example, renting. A nonfreehold estate is created through a lease or rental agreement that can be either written or oral. The landlord maintains ownership of the property, and the tenant has the right to use the property as established in the terms of the lease or rental agreement. Nonfreehold estates involve tenants, and they are often referred to as tenancies. There are four types of tenancies: tenancy for years, tenancy from period to period, tenancy at will and tenancy at sufferance. (For related reading, see Nonfreehold Estates in Real Property.)
Tenancy for Years
A tenancy for years specifies a definite term for the agreement, such as one month or one year. The lease terminates automatically at the specified end date without the need for notice by either the landlord or tenant.
Tenancy from Period to Period
A tenancy from period to period specifies a definite initial time that’s automatically renewable unless terminated by either the landlord or tenant. The lease could be week to week, month to month or year to year, and is renewable indefinitely for a like period of time.
Tenancy at Will
A tenancy at will exists “at the pleasure” of the landlord and tenant. In other words, it’s in force until either the landlord or tenant terminates the agreement. In theory, a tenancy at will can be terminated instantly whenever notice is given by either party. In practice, however, landlords typically provide a reasonable amount of time for the tenant to vacate the property.
Tenancy at Sufferance
A tenancy at sufferance is never intentionally created and exists as the result of circumstances. This type of nonfreehold estate happens when a tenant remains on a property after a lease has been terminated or the agreement has expired. The only difference between a tenant at sufferance and a trespasser is that the former had a right to occupy the property at some point.