Ownership of real property - Types of tenancies

Learning Outcomes

This article explains leasehold estates in real property for MBE purposes, including:

• Classifying tenancy for years, periodic tenancy, tenancy at will, and tenancy at sufferance by their defining features, such as fixed terms, automatic renewal, at‑will duration, and wrongful holdover status.
• Identifying how each tenancy is created—by express agreement, implication from conduct, operation of law, or as a consequence of Statute of Frauds defects—and predicting what estate arises when a purported lease is unenforceable.
• Applying common‑law and modern notice and termination rules, especially for periodic tenancies and tenancies at will, to time‑line‑based fact patterns frequently used on the MBE.
• Distinguishing true leasehold estates from mere licenses in scenarios involving informal permission, family or friend arrangements, shared space, and situations with or without rent payments.
• Analyzing the legal consequences when a valid tenancy ends but the tenant remains in possession, including the landlord’s options to evict, impose new terms, or create a new periodic tenancy.
• Evaluating typical exam traps involving oral long‑term leases, holdover tenants, unilateral termination clauses, and mislabeled agreements, and selecting the tenancy classification that leads to the correct multiple‑choice answer.

MBE Syllabus

For the MBE, you are required to understand the different types of landlord–tenant estates and how they arise and end, with a focus on the following syllabus points:

• Distinguish freehold from non‑freehold (leasehold) estates, and recognize when a leasehold exists rather than a license or a sale.
• Identify the four main leasehold forms: tenancy for years, periodic tenancy, tenancy at will, and tenancy at sufferance.
• Analyze creation of each tenancy, including express leases, implied and “by operation of law” tenancies (e.g., defective leases under the Statute of Frauds, and holdover tenants).
• Apply duration and termination rules, especially notice requirements for periodic tenancies and modern limits on termination of tenancies at will.
• Recognize the legal status and options regarding tenants at sufferance (holdover tenants), including when a new periodic tenancy arises versus when the landlord can evict.
• Understand when oral leases are enforceable or barred by the Statute of Frauds, and what estate arises if an attempted lease fails.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. A lease agreement specifies a term beginning January 1, 2023, and ending December 31, 2023. This creates which type of tenancy?
   1. Tenancy at will
   2. Periodic tenancy
   3. Tenancy for years
   4. Tenancy at sufferance
2. A tenant rents an apartment on a month-to-month basis, starting February 1. On May 10, the tenant gives the landlord written notice of intent to terminate the lease. Assuming common law rules apply, when is the termination effective?
   1. May 10
   2. May 31
   3. June 10
   4. June 30
3. Landlord orally leases Greenacre to Tenant for two years. Tenant enters possession and pays rent monthly. What type of tenancy results in most jurisdictions?
   1. Tenancy for years
   2. Tenancy at sufferance
   3. Periodic tenancy (month-to-month)
   4. Tenancy at sufferance
4. Tenant’s written lease “for one year beginning July 1” expires on June 30 of the following year. Tenant stays in possession and sends Landlord the usual monthly rent check, which Landlord cashes without comment. In most jurisdictions, Tenant now holds:
   1. A renewed tenancy for years
   2. A month-to-month periodic tenancy
   3. A tenancy at will
   4. A tenancy at sufferance
5. Owner tells Friend, “You can stay in my guest house whenever you’d like; you don’t owe me rent.” Friend moves in and pays no rent. What estate, if any, does Friend have?
   1. Tenancy at will
   2. Periodic tenancy
   3. Tenancy for years
   4. License only, not a tenancy

Introduction

Beyond freehold estates (fee simple, fee tail, life estate), which denote ownership, lie non‑freehold or leasehold estates. A leasehold is a landlord–tenant relationship: the landlord retains title, and the tenant receives the right to possess the property for a limited time, usually in exchange for rent.

Key Term: Leasehold Estate
A non‑freehold possessory interest in land, giving a tenant the right to exclusive possession for a limited duration, typically under a lease.

Leasehold questions appear frequently on the MBE. Most of them turn on being able to:

• Classify the tenancy correctly; and
• Apply the correct termination and notice rules to a specific time line.

The four classic leasehold forms are:

• Tenancy for years
• Periodic tenancy
• Tenancy at will
• Tenancy at sufferance

Each can be created in different ways (expressly, implied from conduct, or by operation of law) and has distinct rules for renewal and termination. Getting the classification wrong usually leads to the wrong answer on an MBE question, even if you “feel” the landlord or tenant should prevail.

Leasehold vs. License

A preliminary distinction that the MBE sometimes tests is whether a party has a lease (a leasehold estate) or merely a license.

• A lease gives the tenant exclusive possession for a defined period and creates a property interest in land.
• A license is just permission to use land in a certain way (for example, a ticket to a stadium, or an agreement to park in a lot) and is freely revocable unless coupled with an interest.

Many messy fact patterns where someone stays in a room, office, or storage area “until further notice” are really asking whether the arrangement is a lease (creating one of the four tenancies) or just a revocable license. The more exclusive and long‑term the possession looks, and the more the language resembles “rent,” the more likely it is a lease.

A Step‑by‑Step MBE Approach

When you see a landlord–tenant fact pattern, a reliable sequence is:

• Identify how possession starts: written lease, oral agreement, or just moving in and paying rent.
• Ask whether the agreement violates the Statute of Frauds (e.g., oral lease longer than one year).
• Look for start and end dates:
  • Fixed end date → tenancy for years.
  • No fixed end date but regular rent periods → periodic tenancy.
  • No fixed end date and no clear rent pattern → possible tenancy at will.
• Check what happens after the original term ends: Does the tenant leave, hold over, or pay rent? Does the landlord accept rent or sue to evict?
• Apply the termination and notice rules for the identified estate.

The following sections walk through each tenancy type in turn, emphasize common traps, and illustrate how the doctrines are likely to be tested.

Tenancy for Years

Despite the name, a tenancy for years can run for any fixed, ascertainable period—days, weeks, months, or years. The defining feature is that the beginning and ending dates are certain when the lease is created.

Key Term: Tenancy for Years
A leasehold estate that continues for a fixed, definite period, with a known start and end date set at formation.

A tenancy “for six months,” “from June 1, 2024 to May 31, 2025,” or “for three academic terms beginning August 15” are all tenancies for years. The label in the document is not controlling; the fixed term is.

Creation

A tenancy for years is usually created by an express lease stating both a start and an end date:

• “From June 1, 2024 to May 31, 2025.”
• “For six months beginning on April 15, 2025.”
• “Landlord leases to Tenant for a term of 18 months, commencing upon completion of construction.”

The start date can be stated directly (June 1) or by reference to an event (when construction is complete). As long as the total duration can be determined at the outset, it is a tenancy for years.

Statute of Frauds

If the total term exceeds one year, the Statute of Frauds generally requires a writing signed by the party to be charged (usually the landlord) to make the lease enforceable.

• In most jurisdictions, a lease for exactly one year may be enforceable even if oral.
• An oral lease that, by its terms, cannot be fully performed within one year (for example, “for two years”) falls within the Statute and cannot be enforced as a tenancy for years.

What happens if the parties ignore the Statute of Frauds but proceed anyway?

• The “long” oral lease is unenforceable as a tenancy for years, but if the tenant moves in and pays rent, courts usually imply a periodic tenancy based on the rent period (e.g., month‑to‑month).
• The unenforceable agreement can still serve as evidence of the agreed rent amount for the implied periodic tenancy.

Example: Landlord orally leases a house to Tenant “for three years” at $2,000 per month. Tenant moves in and pays monthly rent. Because the term exceeds one year and the lease is not in writing, the three‑year tenancy for years is unenforceable under the Statute of Frauds. If the landlord accepts rent, most courts will find a month‑to‑month periodic tenancy, not a three‑year tenancy for years.

Termination

A tenancy for years ends automatically on the stated end date. No additional notice by either party is required, because the end date was fixed from the outset.

Early termination can occur only in limited ways:

• Surrender
• Merger
• Express termination clause (e.g., termination upon default)

Key Term: Surrender
An agreement by which a tenant voluntarily yields up the remaining lease term to the landlord, and the landlord accepts that return, thereby terminating the tenancy early. If the unexpired term exceeds one year, surrender usually must be in writing.

Common early‑termination situations:

• Surrender (express). Tenant and landlord sign an agreement that the lease will end early on a specified date.
• Surrender (by operation of law). Tenant abandons the premises, and the landlord clearly accepts the abandonment by doing something inconsistent with the continuing tenancy for years—such as re‑letting to a new tenant on the landlord’s own account for a new term. That acceptance operates as a surrender.
• Merger. The same person later acquires both the landlord’s reversion and the tenant’s leasehold (for example, Tenant buys the property from Landlord). The lesser estate (the leasehold) merges into the larger fee estate and the tenancy ends.
• Default under a termination clause. Many leases provide that the landlord may terminate the tenancy upon non‑payment of rent or other specified breaches, usually after some cure period and required notice. In exam problems, follow the contract language if it is given.

Absent one of these mechanisms or an express clause, a tenancy for years is not terminable at will. Neither party can unilaterally end it early just by deciding they are “done.”

Modern law also imposes a duty to mitigate in most residential tenancies: if a tenant abandons, a landlord must make reasonable efforts to re‑let and credit the tenant for rent obtained. That is a separate issue from the type of tenancy but can be relevant to damages.

Worked Example 1.1

Landlord leases an apartment to Tenant “from June 1, 2023, until August 31, 2023.” On August 31, Tenant moves out without giving Landlord any prior notice. Landlord claims Tenant breached by failing to give 30 days’ notice.

Answer:
This is a tenancy for years: it runs from a fixed start date to a fixed end date. A tenancy for years terminates automatically on the end date; no notice is required. Tenant did not breach by failing to give notice.

MBE Angles and Pitfalls

• Any lease with a fixed end date is a tenancy for years, even if the term is short (e.g., “for 6 weeks”).
• If the lease is for more than one year and not in writing, assume a Statute of Frauds issue:
  • No enforceable tenancy for years; and
  • An implied periodic tenancy if the tenant takes possession and pays rent.
• Watch for language such as “for five years, but either party may terminate earlier on 60 days’ notice.” That is still a tenancy for years with an early‑termination option, not a tenancy at will.
• If the problem gives an end date and also talks about “month‑to‑month rent,” the fixed end date controls the type of tenancy (for years), but the monthly rent interval will matter if the tenant holds over and a new periodic tenancy is implied.

Periodic Tenancy

A periodic tenancy continues for successive, repeating intervals—month‑to‑month, week‑to‑week, or year‑to‑year—until either party gives appropriate notice of termination.

Key Term: Periodic Tenancy
A leasehold estate that repeats automatically for successive periods (such as month-to-month or year-to-year) until terminated by proper notice from either landlord or tenant.

Periodic tenancies are common in residential leases once an initial fixed term expires. Many “one‑year leases” provide that, after the first year, the tenancy continues on a month‑to‑month basis unless either party gives notice.

Creation

A periodic tenancy may arise in three main ways.

1. Express agreement

The lease states a repeating period but no fixed end date.

• “Landlord leases to Tenant month‑to‑month beginning March 1.”
• “$1,000 rent, payable on the first of each month, from month to month.”
• “Year‑to‑year tenancy beginning January 1, 2025, at annual rent of $24,000.”

If the parties expressly describe the tenancy as “from month to month” or “from year to year” without a fixed termination date, treat it as a periodic tenancy.

2. Implication from circumstances

When the parties’ conduct shows they intended an ongoing tenancy with regular rent payments but did not specify a definite end date, a court will imply a periodic tenancy.

If the agreement provides for regular rent payments but is silent on duration, the period is tied to the rent interval:

• Monthly rent → month‑to‑month periodic tenancy
• Weekly rent → week‑to‑week periodic tenancy
• Annual rent → year‑to‑year periodic tenancy

Key Term: Implied Periodic Tenancy
A periodic tenancy that arises without an express statement of duration, usually because the tenant takes possession and pays rent at regular intervals under an agreement that fails as a tenancy for years or omits a termination date.

Common patterns:

• An oral lease for more than one year (violating the Statute of Frauds), followed by possession and regular rent payments, almost always becomes an implied periodic tenancy based on the payment period.
• A lease that says “Tenant may remain as long as both parties desire” but provides for monthly rent is often treated as a month‑to‑month periodic tenancy rather than a tenancy at will, because of the rent pattern.
• A landlord allows a relative to move in and pay a regular amount called “contribution to expenses,” but nothing is said about duration. If later a dispute arises, a court may characterize this as a periodic tenancy if the relative had exclusive possession and the payment looks like rent.

3. By operation of law: holdover tenants

When a tenant under a tenancy for years holds over (remains after the end date) and the landlord accepts rent, most jurisdictions treat that as creation of a new periodic tenancy.

• The period of the new tenancy is usually:
  • The rent period under the expired lease (e.g., month‑to‑month if rent was payable monthly); and
  • For commercial leases, sometimes a year‑to‑year periodic tenancy if the prior lease was for a year or more and rent was calculated annually.

If the landlord instead promptly sues to evict and refuses rent, the tenant remains only a tenant at sufferance (covered below).

Termination

Unlike a tenancy for years, a periodic tenancy does not end automatically. It continues until either party gives proper notice.

Unless a modern statute is mentioned, the MBE expects the common‑law notice rules.

Common‑law notice length

• For a year‑to‑year periodic tenancy: six months’ notice is required.
• For periods less than one year (for example, month‑to‑month, week‑to‑week): notice equal to one full period is required, but never more than six months.

Thus, in a month‑to‑month tenancy, either party can terminate by giving one full month’s notice.

Effective date and “end of a period” requirement

Notice must terminate the tenancy at the end of a natural lease period, not mid‑period.

Example: Month‑to‑month tenancy with rental periods running from the first day of the month to the last day. If Tenant gives notice on May 10:

• One full rental period (June) must elapse after the notice.
• The tenancy terminates at the end of the next full period: June 30.

Many modern statutes simplify this and allow a 30‑day notice terminating at any time, but unless the problem provides such a statute, apply the traditional “full period ending on the last day of a period” rule.

Defective notice

If the notice is defective (too short or terminating in the middle of a period):

• At common law, the notice is generally ineffective and the tenancy continues until proper notice is given.
• Some courts will interpret an otherwise clear but slightly defective notice as effective at the earliest date when it would be valid (for example, construing a “terminate on May 31” notice given on May 10 as effective on June 30). Unless the problem signals such a rule, assume strict common‑law treatment.

Worked Example 1.2

Tenant rents on a month‑to‑month basis, with rent due on the first of each month. On May 10, Tenant gives Landlord written notice that Tenant intends to move out “in one month.” Common‑law rules apply. When does the tenancy terminate?

Answer:
Month‑to‑month tenancies require one full month’s notice, effective at the end of a rental period. Notice given May 10 is not a full month before May 31, so the earliest termination is at the end of the next month. The tenancy terminates on June 30.

Worked Example 1.3

Landlord orally leases a house to Tenant “for two years” at $2,000 per month. Tenant moves in and pays monthly rent for eight months. The jurisdiction’s Statute of Frauds requires a writing for leases longer than one year. Landlord later seeks to evict Tenant immediately. What estate does Tenant have?

Answer:
The oral two‑year tenancy for years is unenforceable under the Statute of Frauds. Because Tenant took possession and pays rent monthly, most courts find an implied month‑to‑month periodic tenancy. Landlord must terminate it by giving proper notice rather than evicting immediately.

MBE Angles and Pitfalls

• If there is no fixed end date but rent is paid at regular intervals, think periodic tenancy, not tenancy at will.
• When a long oral lease violates the Statute of Frauds, ask:
  • Did the tenant enter and start paying rent?
  • If yes, the examiners almost always want “periodic tenancy” as the resulting estate.
• For holdover tenants where the landlord accepts rent, assume a new periodic tenancy unless facts show the landlord was clearly reserving rights (for example, cashing a check marked “use and occupancy only” in a jurisdiction that treats this differently).
• Remember that a sale of the property during a periodic tenancy does not terminate the tenancy. The new owner takes subject to the existing periodic tenancy and becomes the new landlord, bound by notice rules.

Tenancy at Will

A tenancy at will has no fixed duration and is terminable at any time by either landlord or tenant. It is relatively rare today because courts prefer to find periodic tenancies whenever rent is paid regularly.

Key Term: Tenancy at Will
A leasehold of no fixed duration, terminable at the will of either landlord or tenant, usually on reasonable notice and also terminable automatically upon certain events (such as death of a party).

Creation

A true tenancy at will usually requires clear, express language, such as:

• “Landlord leases to Tenant at will.”
• “Tenant may occupy the premises for as long as Landlord and Tenant both desire.”
• “Either party may terminate this tenancy at any time.”

Courts are reluctant to infer tenancies at will. In particular:

• If the agreement gives only one party the right to terminate “at will,” many jurisdictions imply that the other party has a similar right, thus creating a tenancy at will rather than a unilateral option.
• If the agreement is otherwise indefinite but provides for regular rent payments, many courts will construe it as a periodic tenancy rather than at will, precisely because periodic tenancies are more stable.

A tenancy at will can also arise by implication where:

• The tenant is in possession with the landlord’s consent; and
• There is no specific term and no regular rent schedule (for example, Friend allowed to live in a spare room rent‑free until further notice).

However, the presence of periodic rent payments strongly pushes toward a periodic tenancy, not at will.

Termination

Historically, a tenancy at will could be terminated by either party at any time, without notice. Modern statutes and cases generally impose minimum notice requirements (often keyed to a rental period or 30 days).

Termination of a tenancy at will occurs upon:

• Notice by either party, effective after whatever time is considered reasonable or whatever statutory period applies.
• Operation of law, including:
  • Death of either landlord or tenant (under traditional rules; some modern statutes soften this).
  • Tenant committing waste.
  • Tenant attempting to assign or sublet the tenancy at will.
  • Landlord transferring the property to a third party.
  • Landlord granting a term lease to a third party.

Because these rules differ among states, exam fact patterns will usually specify whether any particular event ends the tenancy; if not, apply the traditional rules above.

Worked Example 1.4

Landlord writes to Friend: “You may live in the cottage on my land as long as you like; just pay me $800 on the first of each month.” Friend moves in and pays monthly. After a year, Landlord gives Friend 10 days’ written notice to vacate. Common‑law rules apply. What type of tenancy exists, and is the notice sufficient?

Answer:
The arrangement has no fixed end date but calls for periodic rent (monthly). Courts usually treat this as a month‑to‑month periodic tenancy, not a tenancy at will. Termination therefore requires one full month’s notice ending on the last day of a rental period. Ten days’ notice is insufficient; Landlord must give proper notice and cannot evict immediately.

MBE Angles and Pitfalls

• If regular rent is paid, assume a periodic tenancy rather than at will, unless the question states otherwise.
• Oral agreements “for as long as we both want,” with no regular rent schedule and informal arrangements (such as friend or family staying for free), are more likely to be true tenancies at will or even mere licenses.
• Remember that tenancies at will are fragile: death of a party, assignment, or sale of the property frequently ends them, unless statute says otherwise.
• If a problem strongly emphasizes that either party can terminate “at any time,” but the facts also reflect regular rent payments, pay close attention—often the examiners are inviting you to choose between “periodic tenancy” and “tenancy at will.”

Tenancy at Sufferance (Holdover Tenant)

A tenancy at sufferance arises when a tenant who originally had lawful possession wrongfully remains in possession after the tenancy has ended. It is not a true contractual tenancy but a status that allows the landlord to treat the occupant as a trespasser or as a new tenant.

Key Term: Tenancy at Sufferance
A temporary status that arises when a tenant wrongfully holds over after the expiration of a valid tenancy, pending the landlord’s decision to evict or to treat the occupant as a new tenant.

Key Term: Holdover Tenant
A tenant who remains in possession of leased premises after the lawful tenancy has ended.

Creation

A tenancy at sufferance is created solely by the tenant’s act of holding over after the end of a valid tenancy (for example, an expired tenancy for years or periodic tenancy), without the landlord’s consent.

Key distinctions:

• A holdover is not a trespasser in the sense of having entered unlawfully; initial entry was lawful but continued possession is not.
• A holdover is not in a new periodic tenancy unless and until the landlord elects to treat the holdover as a tenant (usually by accepting rent).

Landlord’s Options

Upon a holdover, the landlord has two basic choices.

1. Evict the tenant

• Landlord may treat the holdover as a trespasser and bring an appropriate eviction action (for example, unlawful detainer).
• Self‑help (changing locks, physically removing tenant) is generally prohibited and can expose the landlord to liability.
• No notice of termination is required beyond what landlord must do procedurally to commence eviction, because the prior tenancy has already ended.

2. Create a new tenancy by accepting rent

If the landlord accepts rent after the lease term expires, most jurisdictions treat this as creation of a new periodic tenancy on the same terms as the expired lease, except for duration:

• For residential property: usually month‑to‑month.
• For commercial property: the period is based on how rent was calculated in the expired lease, often year‑to‑year if annual rent was used.

The new rent amount is normally:

• The rent in the expired lease; or
• A higher amount if the landlord gave clear, advance notice before expiration that rent would increase for any holdover.

These rules are also subject to statutory variation, but the common‑law pattern above is what the MBE tends to test.

Special limits:

• The term of the new periodic tenancy generally may not exceed one year because of the Statute of Frauds.
• If the holdover is brief and caused by factors beyond the tenant’s control (for example, move‑out delayed by severe storm), some courts treat the tenant more leniently, but the MBE usually applies the standard rules unless stated otherwise.

Termination

The tenancy at sufferance continues only until the landlord:

• Obtains a judgment of possession (eviction); or
• Elects to treat the holdover as a tenant by accepting rent, thereby creating a new periodic tenancy.

Once the landlord accepts rent and a periodic tenancy arises, the landlord must follow the periodic tenancy notice rules to terminate.

Worked Example 1.5

Tenant’s one‑year lease (rent payable monthly) ends on July 31. Tenant remains in possession and, on August 5, mails Landlord a check clearly labeled “August rent.” Landlord deposits the check. On August 10, Landlord serves Tenant with a notice to vacate “within 3 days.” What is Tenant’s status, and may Landlord force Tenant out on August 13?

Answer:
After July 31, Tenant initially became a tenant at sufferance. By accepting the August rent, Landlord elected to treat Tenant as a new periodic tenant, most likely month‑to‑month (because rent is paid monthly). Tenant is no longer merely at sufferance. Landlord must terminate the new periodic tenancy by giving proper notice (for example, one full month, effective at the end of a rental period). A three‑day notice is insufficient; Landlord cannot lawfully evict Tenant on August 13 based solely on that notice.

MBE Angles and Pitfalls

• The exam often asks whether accepting rent from a holdover creates a new tenancy; the correct answer is almost always “yes,” usually a periodic tenancy.
• If the landlord refuses rent and moves immediately for eviction, the tenant remains only a tenant at sufferance.
• Watch for facts indicating that the landlord gave advance notice of a rent increase upon holdover; in that case, the increased rent is usually enforceable in the new periodic tenancy.
• Distinguish a tenant at sufferance (who originally had lawful possession) from a trespasser who enters without permission; very different remedies and no implied tenancy arise from a trespasser’s entry.

Exam‑Focused Comparisons and Strategy

Comparing the Four Tenancies

A quick comparison table (conceptual, not needed on exam but helpful as a mental checklist):

• Tenancy for years:
  • Duration: Fixed start and end date.
  • Creation: Usually express lease; must be in writing if more than one year.
  • Termination: Ends automatically on end date; no notice required.
• Periodic tenancy:
  • Duration: Repeating intervals; no set end date.
  • Creation: Express (“month‑to‑month”), implied from rent payments, or holdover plus acceptance of rent.
  • Termination: Requires proper notice timed to end of a period.
• Tenancy at will:
  • Duration: No fixed term; lasts as long as both parties desire.
  • Creation: Express language “at will” or indefinite permission without regular rent.
  • Termination: Either party may terminate; also ends by operation of law events (death, sale, assignment).
• Tenancy at sufferance:
  • Duration: Only until landlord decides what to do.
  • Creation: Tenant wrongfully holds over after a valid tenancy ends.
  • Termination: By eviction or by landlord’s election to create a new tenancy (usually periodic) by accepting rent.

Worked Example 1.6

Landlord sends Tenant a signed letter stating: “You can use my storage building for six months starting March 1, rent $500 payable on the first of each month.” Tenant orally agrees, moves in, and pays rent monthly. Must this arrangement be in writing to be enforceable as a tenancy for years?

Answer:
No. The total term is six months, which does not exceed one year. The Statute of Frauds does not require a writing for leases of one year or less. Even if there were no writing at all, a six‑month tenancy for years could be created orally. Here, the signed letter simply confirms the six‑month tenancy for years.

Worked Example 1.7

Landlord leases a storefront to Commercial Tenant “for one year, ending June 30,” at $5,000 per month. The lease states that if Tenant holds over, Landlord may treat Tenant as a year‑to‑year tenant at$6,000 per month. Tenant remains in possession through August and pays $5,000 for July, which Landlord accepts without comment. In September, Landlord demands$6,000 per month and claims Tenant has a year‑to‑year tenancy at that rate. Which result is most likely?

Answer:
When Tenant held over in July and Landlord accepted rent, a new periodic tenancy arose. The terms of the expired lease (including the holdover clause) are relevant. Because the clause clearly provided for a **year‑to‑year tenancy at $6,000** upon holdover, and Tenant held over, most courts will enforce that clause. Tenant is likely bound to a year‑to‑year periodic tenancy at$6,000 per month.

Worked Example 1.8

Owner tells Neighbor: “You may live in my guesthouse whenever you want; you don’t owe me rent.” Neighbor moves in and lives there for two years without paying rent. Owner later demands that Neighbor vacate immediately. Does Neighbor have a leasehold estate?

Answer:
Neighbor has no leasehold estate. There is no rent, no fixed term, and the permission is informal and revocable. This is best characterized as a license—revocable permission to use the land—not a tenancy. Owner may revoke the license at will, subject only to reasonable time for Neighbor to move out.

Key Point Checklist

This article has covered the following key knowledge points:

• Leaseholds are non‑freehold possessory interests: the landlord holds title; the tenant holds a limited right of possession.
• A tenancy for years has a fixed, ascertainable period and terminates automatically on the end date; leases for more than one year generally must be in writing; early termination requires surrender, merger, or an applicable clause.
• Periodic tenancies repeat for successive intervals (for example, month‑to‑month, year‑to‑year) and arise by express agreement, implication from regular rent payments, or by operation of law when a landlord accepts rent from a holdover tenant.
• Termination of a periodic tenancy requires proper notice: at common law, six months for a year‑to‑year tenancy; for shorter periods, notice equal to one full period, effective at the end of a period.
• An implied periodic tenancy often results when an oral lease longer than one year violates the Statute of Frauds but the tenant takes possession and pays rent at regular intervals; the rent period defines the tenancy’s period.
• A tenancy at will has no fixed duration, is terminable by either party (subject to modern notice requirements), and also ends by operation of law upon events such as death, sale, or assignment.
• Courts disfavor tenancies at will and will often recharacterize indefinite arrangements with regular rent as periodic tenancies.
• A tenancy at sufferance describes the status of a holdover tenant whose lawful tenancy has ended; the landlord may evict without further termination notice or create a new periodic tenancy by accepting rent.
• Acceptance of rent from a holdover tenant almost always creates a new periodic tenancy on the same basic terms as the expired lease, often month‑to‑month in residential settings.
• Correct classification of the tenancy and careful attention to dates, rent intervals, and notice periods are important to answering MBE landlord–tenant questions correctly.

Key Terms and Concepts

• Leasehold Estate
• Tenancy for Years
• Periodic Tenancy
• Implied Periodic Tenancy
• Tenancy at Will
• Tenancy at Sufferance
• Holdover Tenant
• Surrender