Also called estate at will, a tenancy at will refers to a legally binding rental agreement between a tenant and landlord where the former can occupy a property for an undefined amount of time. This type of oral agreement often does not involve a formal lease or contract, and either party has the ability to dissolve the arrangement for any reason and at any time.
The tenant typically pays rent to the property owner on a monthly or weekly basis. When terminating a tenancy-at-will arrangement, it is common for a landlord or tenant to give 30 days notice in writing before the property is vacated. In addition, each state has its own distinct regulations regarding the legal rights and protections for tenants and landlords in tenancy-at-will agreements.
What Is a Tenancy at Will and How Does It Work?
A tenancy-at-will arrangement occurs when a tenant occupies a property with the landlord’s permission without a formal written agreement in place between the two parties. The primary difference between a tenancy at will and other types of rental agreements is that there is no fixed end date to the tenancy.
This tenancy agreement often applies to commercial or industrial settings but can also be applicable in residential rentals, such as if a tenant moves into an apartment building where units are being rented month to month. Because of the absence of a formal lease agreement, a tenancy at will can end at any time without a specified reason by either the tenant or landlord.
For example, if the tenant stops paying rent, the landlord can ask them in writing to leave within 30 days, depending on state law. Similarly, if the landlord decides they want to sell the property or stop renting it out altogether, they can give the renter written notice to vacate.
How To Terminate a Tenancy-at-Will Arrangement
To formally end a tenancy-at-will agreement, either the landlord or tenant has to give written notice to the other party specifying a date on which the tenancy will end. The notice period required varies by state.
For instance, Florida law requires 15 days’ notice for terminating a month-to-month tenancy, while the minimum for the state of Delaware is 60 days.
After giving notice, the tenancy-at-will arrangement is considered terminated, and both parties are released from their obligations under the agreement. If the tenant does not vacate by the date written in the notice, the landlord can file an eviction lawsuit.
Is It Legal for a Tenant to Occupy Real Estate Under Tenancy at Will?
In most cases, it is legal for a tenant to occupy real estate under tenancy at all—but it depends on the state in which the property and tenant are located. Many times, tenancy at will starts when a landlord accepts rent from a tenant without having a written lease agreement in place.
For example, in New York, rental arrangements can take the form of an oral agreement as long as the property is not rent-stabilized. However, if the property will be occupied for more than one year, oral agreements are not considered enforceable by law in New York.
Landlords or tenants who are unsure of whether or not their state considers a tenancy at will to be a legal agreement should consult with an experienced attorney or their local housing authority.
What Are the Benefits and Risks of a Tenancy at Will?
One of the main benefits of a tenancy at will is that it offers flexibility for both the tenant and the landlord. With this type of arrangement, the tenant is not locked into a lease for a fixed term, and they simply give notice to the landlord when they need to move out. This can be helpful for tenants who may need to relocate for work or personal reasons.
Another advantage of a tenancy-at-will agreement is that it is relatively easy to set up and maintain. Tenancies at will can be created with a simple verbal agreement between landlord and tenant, without the need for complex legal paperwork.
While there are advantages to renting on a month-to-month arrangement, there are also potential risks involved, such as the rent amount increasing on short notice. Landlords typically have the right to raise rent prices by a certain percentage with 30 days’ notice in most states, including California.
As a result, tenants could find themselves facing an unexpected rent hike after only a few months of occupancy. Compared to standard lease agreements, tenancy-at-will agreements may also come with relatively higher rent prices and fewer protections for tenants.
Since there is no formal contract governing the relationship between landlord and tenant, each side may have a different understanding of their respective responsibilities, which could lead to conflict and legal problems over time.
How Can Landlords Prevent Tenant Lawsuits From Tenancies at Will?
To avoid any future tenant lawsuits, landlords should take precautionary steps to protect their interests from the outset. This could mean setting up a written lease agreement with a security deposit, even if the tenant is only paying rent on a month-to-month basis.
The document should clearly define the rights and obligations of both parties, as well as the terms of the tenancy itself. It is also important for landlords to keep meticulous records of all rental payments made by the tenant.
Certain states, such as New York, require a paper trail of rent payment receipts in cases where the tenant does not pay rent with a check. In addition, landlords may have to give appropriate notice before making any changes to the rental property or increasing rent prices based on local laws.
For example, if a landlord wants to enforce a new rule or regulation regarding the property, they could be required to first give written notice to all tenants and allow sufficient time to comply. Another precaution the property owner can take is to do their due diligence by screening potential tenants using background checks and income verification.
What Is the Difference Between a Tenancy at Will and a Periodic Tenancy?
As long as both the landlord and tenant agree to the arrangement, a tenancy at will is a type of legal rental agreement where the latter can occupy the property for an unspecified time frame.
A periodic tenancy is a type of rental arrangement that renews itself on a regular basis, usually monthly or yearly. Sometimes a periodic tenancy may be for a shorter period of time as well, such as weekly or biweekly.
Essentially, a tenancy at will gives both parties more flexibility and control over the duration of the agreement, while a periodic tenancy provides more stability and predictability.
Periodic tenancies are common in residential leases since they offer tenants some assurance that they won’t be suddenly displaced if the landlord decides not to renew the agreement. This kind of tenancy also offers a sense of security for the landlord, knowing they will have a tenant occupying their rental unit long-term.
The Bottom Line on Tenancy-at-Will Agreements
A tenancy at will is a type of agreement where a tenant can occupy a property for an undetermined period of time. There are no set rules or strict terms with a tenancy at will, which affords both parties more flexibility than a standard lease agreement.
However, this also means that either party can terminate the agreement at any time. If either the landlord or tenant decides to terminate the agreement, they must give written notice ahead of time, typically 30 days before vacating.
In addition, this type of tenancy can prove 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.
Due to the lack of a fixed rental amount, landlords may raise the rent at their convenience, though whether or not they have to give notice depends on state law. 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.