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Tenant |
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It has been suggested that Lease be merged into this article or section. (Discuss) |
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It has been suggested that Leasehold be merged into this article or section. (Discuss) |
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The examples and perspective in this article may not represent a worldwide view of the subject. Please improve this article or discuss the issue on the talk page. (July 2007) |
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A leasehold estate is an ownership interest in land in which a lessee or a tenant holds real property by some form of title from a lessor or landlord.
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Landlord-tenant laws existed in places such as Andalusia, and laws governing such relationships can be found in the Code of Hammurabi. However, the common law of the landlord-tenant relation evolved in England during the Middle Ages. That law still retains many archaic terms and principles pertinent to a feudal social order and an agrarian economy, where land was the primary economic asset and ownership of land was the primary source of rank and status. See also Lord of the Manor.
Modern leasehold estates can take one of forms – the fixed-term tenancy or tenancy for years, the periodic tenancy, the tenancy at will, and the tenancy at sufferance, all discussed below. Forms no longer used include socage and burgage.
When a landowner allows one or more persons, called "tenants," to use his land in some way for some fixed period of time, the land becomes a leasehold, and the resident (or worker) - landowner relation is called a "tenancy." A tenant pays rent (a form of consideration) to the landowner. The leasehold can include buildings and other improvements to the land. The tenant can do one or more of: farm the leasehold, live on it, or practice a trade on it.
Tenancy was essential to the feudal hierarchy; a lord would own land and his tenants became his vassals. However, it still happens today in many parts of the world. In the U.S.A., there are food co-ops which supply tenants with a place to grow their own produce. Rural tenancy is also a common practice. Under a rural tenancy, a person buys a large amount of land and the rural community uses it agriculturally as a source of income.
A fixed-term tenancy or tenancy for years lasts for some fixed period of time. Despite the name tenancy for years, such a tenancy can last for any period of time – even a tenancy for one week would be called a tenancy for years. At Common law the duration did not need to be certain, but could be conditioned upon the happening of some event, (e.g. "until the crops are ready for harvest", "until the war is over"). In many jurisdictions that possibility has been partially or totally abolished.1
The tenancy will come to an end automatically when the fixed term runs out, or, in the case of a tenancy that ends on the happening of an event, when the event occurs. It is also possible for a tenant, either expressly or impliedly, to give up the tenancy to the landlord. This process is known as a surrender of the lease.
A periodic tenancy, also known as a tenancy from year to year, month to month, or week to week, is an estate that exists for some period of time determined by the term of the payment of rent. An oral lease for a tenancy of years that violates the Statute of Frauds (by committing to a lease of more than--depending on the jurisdiction--one year without being in writing) may actually create a periodic tenancy, the construed term being dependent on the laws of the jurisdiction where the leased premises are located. In many jurisdictions the "default" tenancy, where the parties have not explicitly specified a different arrangement, and where none is presumed under local or business custom, is the month-to-month tenancy.
The landlord may terminate the lease at any time by giving the tenant notice as required by statute. Typically, the landlord must give six months' notice to terminate a tenancy from year to year. Tenants of lesser durations must typically receive notice equal to the period of the tenancy - for example, the landlord must give a month's notice to terminate a tenancy from month to month. However, many jurisdictions have varied these required notice periods, and some have reduced them drastically.
The notice must also state the effective date of termination, which, in many jurisdictions, must be on the last day of the payment period. In other words, if a month-to-month tenancy began on the 15th of the month, in such a jurisdiction the termination could not be on the 20th of the following month, even though this would give the tenant more than the required one month's notice.
A tenancy at will is a leasehold such that either the landlord or the tenant may terminate the tenancy at any time by giving reasonable notice. It usually occurs in the absence of a lease, or where the tenancy is not for consideration. Under the modern common law, tenancy at will can arise under the following circumstances:
In a residential lease for consideration, a tenant may not be removed except for cause, even in the absence of a written lease. If a landlord can terminate the tenancy at will, a tenant by operation of law is also granted a reciprocal right to terminate at will. However, a lease that expressly continues at the will of the tenant ("for as long as the tenant desires to live on this land") does not automatically provide the landlord with a reciprocal right to terminate, even for cause. Rather, such language may be construed to convey to the tenant a life estate or even a fee simple.
A tenancy at will terminates by operation of law, if:
Depending on the laws in force in a particular jurisdiction, different circumstances may legally arise where a tenant remains in possession of property after the expiration of a lease.
A tenancy at sufferance (sometimes called a holdover tenancy) may exist when a tenant remains in possession of property even after the end of the lease, until the landlord acts to eject the tenant. The occupant may legally be a trespasser at this point, and the possession of this type may not be a true estate in land, even if authorities recognize the condition to hold the tenant liable for rent. The landlord may be able to evict such tenant at any time, without notice.
The landlord may also be able to impose a new lease on the holdover tenant. For a residential tenancy, such new tenancy lasts month to month. For a commercial tenancy of more than a year, the new tenancy is year to year; otherwise, the tenancy lasts for the same length of time as the duration under the original lease. In either case, the landlord can charge a higher rent, if the landlord, before the expiration of the original lease, has notified the tenant of the increase.
In some jurisdictions, the tenant has a legal right to remain in occupation of the premises after the end of a lease unless the landlord complies with a formal process to dispossess the tenant of the property. For example, in the United Kingdom, a business tenant has a right to continue occupying their demise after the end of their lease under the provisions of sections 24-28 of the Landlord and Tenant Act 1954 (unless these provisions were formally excluded by agreement before the lease was completed). At the end of their lease they need do nothing but continue payment of rent at the previous level and uphold all other relevant covenants such as to keep the building in good repair. They cannot be evicted unless the landlord serves a formal notice to end the tenancy and successfully opposes the grant of the new lease to which the tenant has an automatic right. Even this can only be done under prescribed circumstances, for example the landlord's desire to occupy the premises himself or to demolish and redevelop the building.
A type of protected tenancy that was created before 6 July 1957. From November 28, 1980 all controlled tenancies were changed to regulated tenancies
The first is to put the tenant in possession of the land at the outset of the lease (the 'English' rule); the second is to provide the premises in a habitable condition – there is an implied warranty of habitability. If landlord violates either, the tenant can terminate the lease and move out, or stay on the premises, while continuing to pay rent, and sue the landlord for damages (or withhold rent and use breach of implied warranty of habitability as a defense when the landlord attempts to collect rent).
The lease also includes an implied covenant of quiet enjoyment – landlord will not interfere with tenant's quiet enjoyment. This can be breached in three ways.
Under the common law, the landlord had no duties to the tenant to protect the tenant or the tenant's licensees and invitees, except in the following situations:
Under the common law, the tenant has two duties to the landlord. These are to pay rent when it is due, and to avoid waste of the property.
A tenant is liable to third party invitees for negligent failure to correct a dangerous condition on the premise – even if the landlord was contractually liable.
If land under lease to a tenant is condemned under the government's power of eminent domain, the tenant may be able to earn either a reduction in rent or a portion of the condemnation award (the price paid by the government) to the owner, depending on the amount of land taken, and the value of the leasehold property.
With a partial taking of the land, the tenant may claim apportioned rent for property taken. For example, suppose a tenant leases land for 6 months for $1,000 per month, and that two months into the lease, and the government condemns 25% of the land. The tenant will then be entitled to take a portion of the condemnation award equal to 25% of the rent due for the remaining four months of the lease – $1,000, derived from $250 per month for four months.
A full taking, however, extinguishes the lease, and excuses all rent from that point. The tenant will not be entitled to any portion of the condemnation award, unless the value of the lease was greater than the rent paid, in which case the tenant can recover the difference. Suppose in the above example that the market value of the land being leased was actually $1,200 a month, but the $1,000 per month rate represented a break given to the tenant by the landlord. Because the tenant is losing the ability to continue renting the land at this bargain rate (and probably must move to more expensive land), the tenant will be entitled to the difference between the lease rate and the market value – $200 per month for a total of $800.
Many adverse effects come from this system. Tenants have to pay the landowner even though they are doing all of the agricultural work. In a sense, it is a cycle where the tenant is never really able to become a landowner because they constantly to pay the landowner, as well as other expenses. If a crop does not flourish, the tenant will still have to pay for the use of the land. The landowner, since he is ultimately owner of the land, also can have a say in what the tenant uses the land for or what he can or cannot grow. On the contrary, rural tenancy has advantages. If a person owns too much land for just their family to use, tenants can rent it out and make use of the land. Also, if a landowner rents out the land, it can be a source of economic income for the tenant which may not have previously existed. In poorer communities, rural tenancy can give the tenants a chance to grow crops to sell in markets and to feed their families.
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