1. Home »
  2. Real Estate

Lacking a Lease: Understanding the Tenancy-at-Will

Updated: August 8, 2022

Chances are pretty good you have a story about a nightmarish situation involving a landlord and a tenant. Conflict over a rental arrangement is common and the best way to avoid it is to sign an airtight lease agreement. But many tenancies are “at will,” meaning they are there may be a verbal or even a written agreement between the landlord and tenant but there’s no formal lease that specifies when the arrangement ends.

So what are some examples of at-will tenancies? How could this type of situation go wrong, and what rights do both parties possess in case it does? These are important questions for landlords and tenants to consider. Understanding types of tenancies can help both parties to navigate the complex web of laws and statutes that govern housing and make the decisions that are right for them.

Table of Contents

What is a Tenancy-at-will?

Consider the following scenario: Bob owns a home and plans to move into it within a few months but because of work commitments doesn’t know exactly when. His tenant’s lease is due to expire and while he needs rent to cover the mortgage, he doesn’t want to go through the process of finding another tenant and signing another long-term lease. His son offers to stay in his home for discounted rent in the meantime.

Or this situation: Tracy’s friend ends a relationship and needs a place to stay for a few months while she figures out her next step. Tracy doesn’t mind her staying awhile. Six months later, the friend still hasn’t left.

At the outset of either of these situations, a fixed, legally binding lease might seem onerous and unnecessary. The consequences for breaking a lease without a legally acceptable reason include penalties and costly lawsuits, so entering into one can feel daunting. It’s easy to see how so many people end up in at-will tenancies. At the same time, failing to sign a tenancy agreement can end in conflict or in court.

Tenancy Types

Types of Tenancy

There are four broad categories a tenancy might fall into.

The first is a tenancy for years, which is a tenancy governed by a formal lease agreement. The lease applies to a fixed period of time and clearly identifies the tenant’s move-out date. Though the lease might allow for the possibility of renewal, the tenancy ends when the agreement says it ends. This means the landlord doesn’t have to give the tenant special notice to move out.

Another type of tenancy is a periodic tenancy. This also involves a legally valid lease agreement but does not specify an end date. An example is a month-to-month tenancy. To terminate a periodic tenancy, notice must be at least equal to the length of the tenancy itself unless the parties agree, in writing, to other terms.

Then there’s a tenancy-at-sufferance. This is a fancy way of saying a lease ended or expired and the tenant didn’t move out. Technically this makes the tenant a “holdover tenant,” or a tenant who continues to stay on a property despite not having the landlord’s express permission to do so. If the landlord continues to collect rent, however, the tenant’s right to remain is legally implied and the tenant is entitled to 30 days’ notice before being evicted.

The fourth type of tenancy, which this post will discuss in detail, is the tenancy-at-will.

Legal Definition of Tenancy-at-will

Case law defines a tenancy-at-will as a tenancy that lasts for an “indefinite period” of time. While there may be an agreement, even a written one, the agreement may not be legally valid or may be expired. A tenancy-at-will is not without rules; it just isn’t governed by a strict, formalized contract.

At-will tenancies might involve people who are related or who know each other. An example is an adult child with a family who moves into a parent’s home temporarily. Another example is a property manager or onsite manager who renders services in exchange for a place to stay. Tenancy-at-will could even refer to a house-sitting arrangement. 

The tenancy gets renewed every month unless either party indicates a desire to end it. Because no contract fixes the tenancy in time, either the landlord or tenant can end the arrangement at their convenience.

If the agreement between the landlord and tenant is oral, most courts consider the tenancy to be a month-to-month tenancy. This means that despite the absence of a contract, a landlord must follow a specific set of rules in order to remove the tenant from the property. Because of the complicated and variable nature of rental laws, removing a tenant is not as simple as asking the tenant to move and then changing the locks if that doesn’t happen.

Tenant Rights

Rights of tenant's

In almost every state, tenants have the right to safety and the right to privacy. This is true whether or not there’s a signed lease agreement in place. If a landlord gives someone verbal or written permission to stay at a property, then the person is considered a tenant with tenants’ rights.

This means that even in the absence of a contract, a landlord is required by law to provide and upkeep a safe, hygienic, and habitable environment for a tenant to occupy. The landlord is also required to give the tenant some amount of notice before entering the premises, except in specific cases of emergency. (Rules on the amount of notice vary from state to state; click here for an overview of each state’s notice-to-enter rules.) Moreover, per the federal Fair Housing Act, a tenant cannot be refused tenancy or evicted on discriminatory grounds.

Whether or not there’s a formal lease in place, a tenant also has some legal obligations: to pay rent, for example, and repair damages to the property that go beyond normal wear and tear. (Check out this post to better understand the difference between damages and wear and tear.) 

Laws vary widely between states, but these fundamental rights apply to all tenancy situations. It’s always a good idea for both landlords and tenants to get familiar with their respective rights and what their state’s laws have to say about housing. Doing so can save time, money, and a whole lot of extra stress.

Tenants vs. Squatters

Let’s quickly clarify the difference between a tenant-at-will and a squatter. Neither has a rental contract. However, a landlord gave an at-will tenant permission to occupy the property. A squatters moved in without permission. 

A squatter may, at some point, have had the landlord’s permission to occupy the premises, but no longer does.

In most states, a landlord isn’t allowed to forcibly remove either tenant or a squatter from a property. Trying to remove someone from the place they’re living instead of leaving the act of removal in the hands of the authorities can actually land a landlord in trouble with the law.

When a Tenant Won’t Leave

So, what can a landlord do after inviting someone to live at a property without entering into a lease agreement and then realizing that person does not intend to leave?

The best course of action to take before any other is to try reasoning with the tenant. It’s wise to seek other ways to resolve a problem before the problem winds up in court. Eviction costs time and money, so it’s best to avoid that path if possible.

However, sometimes a landlord and tenant don’t reach an agreement. In this case, the landlord can issue a notice to quit. 

While requirements vary by state, the notice generally gives a tenant a timeframe in which to either fix a stated problem, such as the non-payment of rent, or move out. If the tenant ignores the notice, the landlord then has the authority to formally open an eviction proceeding in the local court.

Here’s where it gets interesting. If the tenancy is governed by a fixed-term lease, the landlord needs a legally valid reason to initiate an eviction. In most states, it’s legal to evict a tenant who is engaging in illegal activity, such as prostitution or the distribution of illegal drugs, on the property or housing unauthorized persons or pets. Failing to pay rent is also legal grounds for eviction. 

But when the tenancy is “at will,” the landlord has to provide notice but doesn’t have to offer a reason for doing so. However, keep in mind that, even in a tenancy at will, a landlord is still not allowed to provide notice for reasons prohibited by the Federal Fair Housing Act.

Evicting a Tenant-at-will

At the same time, it’s also true that eviction can be a little bit more complicated when there’s no lease. Leases generally spell out the timeframe in which the tenant must be notified of impending legal action. If there’s no lease, then usually the landlord is usually obligated to give a full 30 days’ notice. This, again, varies by state. In Utah, for example, the landlord has to give 15 days’ notice; in Delaware, the required timeframe is 60 days. (See this table for required timeframes in all 50 states.)

In general, the landlord has more control over the timeframe and move-out date if there’s a written contract that lays the process out in black and white. In the absence of a lease, state law will determine the course of action. Exceptions to this rule include the landlord’s death or the sale or foreclosure of the property.

Pros and Cons of a Tenancy-at-will

Pros and Cons of Tenancy-at-will

The primary advantage of a tenancy-at-will, of course, is flexibility. When either the landlord or tenant needs to be able to terminate an arrangement fairly quickly, a tenancy-at-will allows for that course of action. Another advantage is that the tenancy can continue while the property is on the market, and until it sells. 

Flexibility, however, is the opposite of stability. Tenants seeking a guarantee that they’ll still have a place to live the following month and landlords who want certainty that a renter will continue to cover the mortgage for the foreseeable future may not be comfortable with a tenancy-at-will. 

People who consider a tenancy-at-will too risky might prefer a lease agreement. A month-to-month agreement is an option that offers both flexibility and some measure of legal protection. Leases should include the terms of tenancy and the number of days of notice each party needs to give before ending the agreement. Even if the rental arrangement is with a friend or family member, a simple form can be the difference between clarity and conflict. Check out our website for templates of lease agreements that apply to a wide range of situations, as well as notices to quit and other tenancy-related forms.

Leave a Comment