A tenancy at will is often an informal rental agreement without a set duration. Either the landlord or the tenant can terminate the agreement at any time.”
Tenancy at will is a type of agreement that doesn’t have a fixed end date. Unlike periodic or fixed-term tenancies, this informal arrangement (often an oral agreement) doesn’t involve a contract or written lease. Tenancy-at-will is also known as an estate-at-will.
What Are Examples of Tenancy at Will?
To illustrate the practical application of tenancy at will, let’s explore a few scenarios where you’ll find this type of arrangement:
Post-Lease Expiration
Imagine a situation where a tenant’s fixed-term occupancy lease has expired. However, they continue to occupy the rental property with the landlord’s consent. In this situation, the terms of the expired lease (excluding the duration) will continue to be in force. Unlike fixed-term leases, tenancy at will doesn’t have a specific end date. This allows the landlord or renter to terminate the lease at any time, provided that proper notice is given.
Informal Rental Arrangements
Another example could be when close friends or family members decide to enter into a less formal arrangement for renting a property due to the existing trust and understanding that exists between the two parties.
The Difference Between a Tenancy-at-Will Agreement & Other Forms of Tenancy
Both landlords and tenants can choose from various types of tenancy agreements. However, the most commonly used ones are periodic and fixed-term tenancies. Let’s see how they compare to a tenancy-at-will agreement.
Periodic Tenancy
When comparing a tenancy at will to a periodic tenancy, several notable distinctions exist. While both types of tenancies lack a set end date, they differ in renewal and termination processes.
In a periodic tenancy, the agreement automatically renews at the end of each period, with a month-to-month tenancy being the most common.
On the other hand, tenancy at will operates without a predetermined timeframe. It allows the landlord or the tenant to terminate the agreement at any time, typically with a notice period.
Additionally, while periodic tenancies can be established through verbal agreements, tenancy at will often does not involve a formal written agreement.
Fixed-Term Tenancy
Several significant differences come to light when comparing tenancy at will to a fixed-term lease. As the name implies, a fixed-term tenancy is usually accompanied by a formal lease agreement that has a set end date, and typically lasts for a specific duration, such as one year. During this period, the lease terms, including rent amounts and tenancy conditions, remain unchanged, providing stability for both landlords and tenants.
Tenancy at Sufferance (Holdover Tenants)
When comparing tenancy at will and tenancy at sufferance, there are distinct differences to consider. Tenancy at will occurs when both the landlord and the tenant agree to continue the arrangement without a specific duration or formal agreement in place. In contrast, tenancy at sufferance (also known as a holdover tenant) refers to a situation where a tenant remains in the property after the expiration of a lease without the landlord’s permission.
While tenancy at will is a consensual arrangement providing flexibility, tenancy at sufferance arises when a tenant continues to occupy the premises without the landlord’s consent.
Benefits and Risks of a Tenancy at Will
Tenancy at will is a flexible arrangement that benefits both landlords and tenants. It allows tenants to give notice when they plan to vacate the property without being tied to a fixed lease term. This is especially helpful for tenants with unpredictable work commitments or personal circumstances that require them to move on short notice.
However, for a tenant, it’s essential to be aware of the potential risks. One such risk is the possibility of a sudden rent increase. In many states, landlords have the right to raise rent prices by a certain percentage, typically with a 30-day notice.
When landlords and tenants enter into a tenancy at will agreement without a formal contract, they may have different expectations and obligations. This could potentially lead to issues down the line. To avoid any problems, it’s important to clarify all responsibilities and expectations beforehand.
How to Terminate Tenancy at Will
No matter how flexible an at-will tenancy may be, there might come a moment when either party may decide to bring it to an end.
Landlord’s Notice:
As the landlord, it is your responsibility to initiate the process of obtaining possession of the property by providing written notice of termination to the tenant. Typically, a notice period of around 30 days is required, although this may vary depending on local rental laws. Ensure that your notice includes the effective date of termination and any other relevant information.
Tenant’s Notice:
If you are the tenant-at-will wishing to terminate the tenancy at will, you should provide written notice to the landlord within the designated notice period specified in the agreement or required by local regulations. Clearly communicate your notice of intent to end the tenancy and provide the effective date of termination.
The Wrap Up
Tenancy at will is often an informal rental agreement without a set duration. Either the landlord or the tenant can terminate the agreement at any time, which affords both parties more flexibility than a standard lease agreement.
If either the landlord or tenant decides to terminate the agreement, they must give written notice ahead of time, typically 30 days before vacating. Some states like Delaware, require 60 days notice.
However, this type of tenancy can prove to be beneficial for both landlords and tenants. For landlords, it allows them to rent out their property on a short-term basis without having to commit to a long-term lease. For tenants, it gives them the option to move out quickly if their circumstances change.
Despite these advantages, there are drawbacks, such as the lack of security and stability for both parties. Because there is no set lease term, tenants may be evicted more easily than in a traditional lease agreement. While a landlord may find themselves with an unexpected vacancy.
Overall, a tenancy-at-will can be a viable option for both landlords and tenants if they are aware of the risks and legal implications involved.
