- Distinguish the four leasehold estates by duration, notice requirements, and method of termination.
- Organize the ten landlord-tenant issues into their common-law, reform, and miscellaneous groups.
- Identify tenant duties, landlord duties, and the remedies available when either side breaches them.
- Apply the modern exceptions governing landlord tort liability to third parties.
- Differentiate assignments from subleases and determine when privity of contract or privity of estate exists.
- Basic familiarity with property interests and contracts.
How a Leasehold Relationship Works
A leasehold combines a possessory property interest with a contractual agreement.
A leasehold estate, also called a nonfreehold estate, arises when an owner grants another person exclusive, non-revocable use of property for a period of time in return for money. The owner is the landlord, the person occupying the property is the tenant, and their arrangement is a lease agreement, rental agreement, or contract to rent.
The landlord presently owns the property, while the tenant possesses it. Accordingly, the tenant holds the present leasehold interest and the landlord retains a future interest that follows the lease. The tenant's payment is rent.
The Four Forms of Leasehold
Each estate has its own rules for duration, notice, and ending the tenancy.
A Fixed Term: Term of Years
Because the lease already supplies the termination date, the tenant need not give separate notice. The date itself provides notice, and the estate expires then.
An Automatically Renewing Term: Periodic Tenancy
Either party may end the tenancy by giving notice. At common law, notice must cover at least one complete period. When the period exceeds one year, six months is enough. The stated ending date must coincide with the final day of a payment period.
Periodic tenancies commonly arise by implication in three situations:
- The parties specify regular payment periods and no end date, but do not name the leasehold type.
- They orally create a term of years longer than one year, contrary to the Statute of Frauds.
- A lease ends, the tenant remains wrongfully, and the landlord accepts rent.
In the holdover situation, the rent schedule determines the new period. Monthly payments, for example, produce a month-to-month tenancy.
A Tenancy Without a Set End: Tenancy at Will
Remaining After Expiration: Tenancy at Sufferance
The law treats this condition as a leasehold so the landlord can recover rent. Unlike a trespasser, who lacks possession in the legal sense, a tenant at sufferance enjoys possession while physically remaining there.
It ends when the landlord evicts the holdover tenant or imposes a new lease, thereby creating a periodic tenancy.
| Estate | Duration and ending rule |
|---|---|
| Term of years | Fixed period; ends on its stated date without additional notice. |
| Periodic tenancy | Renews by period until either party gives proper notice. |
| Tenancy at will | No set ending date; either party may end it with reasonable notice. |
| Tenancy at sufferance | A holdover condition lasting until eviction or imposition of a new lease. |
A one-year lease starts September 1. The tenant remains after August 31. What estate exists on the next September 1, and what results if the landlord accepts that month's rent?
The tenant initially has a tenancy at sufferance. By accepting rent, the landlord can impose a new periodic tenancy, with its period determined by the rent-payment schedule.
Landlord-Tenant Rights, Duties, and Remedies
Ten recurring issues organize the obligations owed by landlords and tenants.
The ten principal issues can be remembered in three sets.
| Group | Issues |
|---|---|
| Original common-law issues | Possession, payment of rent, and freedom from waste. |
| Leading reform issues | Quiet enjoyment and habitability. |
| Additional landlord responsibilities | Common areas, latent defects, negligent repairs, public use, and furnished short-term properties. |
A right on one side corresponds to a duty on the other. For possession, the landlord must deliver it and the tenant may receive it. For rent, the tenant must pay and the landlord may collect. Most duties in the full list belong to the landlord.
When Rent Is Not Paid
The landlord's remedies depend on whether the nonpaying tenant still possesses the property.
- If the tenant remains, the landlord may sue for unpaid rent while continuing the tenancy.
- The landlord may also evict, either instead of or together with the rent action.
After eviction, the tenant occupies as a tenant at sufferance, and rent remains due until the tenant actually departs.
If the tenant has abandoned the property, a minority of states permits an immediate suit for rent. Under the majority approach, the landlord may accept abandonment as an offer to surrender, diligently seek a replacement tenant to mitigate loss, and then sue for the amount owed.
Waste, Maintenance, and Fixtures
- Voluntary waste means actively harming the property.
- Permissive waste means failing to maintain the property.
- Ameliorative waste means altering the property in a way that improves it.
At common law, the rule against permissive waste required the tenant to keep the premises in reasonably good repair.
Common-law doctrine treated a tenant's removal of a fixture as voluntary waste, even when that tenant installed it, because fixtures passed with the land. Examples include custom windows or lighting and heating or cooling systems.
Modern courts generally permit a tenant to remove an installed fixture when doing so causes no substantial harm. The lease may also establish the parties' own fixture terms.
The Landlord's Duty to Deliver Possession
| Rule | What the landlord must provide |
|---|---|
| Minority American Rule | Legal possession only; a remaining holdover tenant is the new tenant's problem. |
| Majority English Rule | Both legal and physical possession; the landlord is liable if the prior tenant remains when the new lease begins. |
Quiet Enjoyment and Constructive Eviction
Any breach permits a damages action. If the interference is substantial, the tenant may also leave and stop paying rent under constructive eviction.
- Substantial interference results from the landlord's action or inaction; a recurring condition can qualify even if it is not permanent.
- The tenant gives notice, and the landlord fails to correct the condition.
- The tenant actually leaves within a reasonable time after that failure.
Traditionally, landlords generally were not accountable for interference by other tenants. The modern trend imposes responsibility when the landlord can prevent it. Every jurisdiction requires landlord control of common areas such as halls and stairs.
Habitability and Its Remedies
A breach requires a substantial health or safety threat. Relevant conditions include running, drinkable, or hot water problems; faulty plumbing or electricity; lack of winter heat; and insect or rodent infestation.
As with constructive eviction, the tenant must notify the landlord and allow a reasonable correction period. If the landlord does not cure the condition, the tenant has four possible remedies:
- Remain in possession, keep paying rent, and seek damages.
- Depart within a reasonable time after the landlord's failure to correct.
- Repair the condition and subtract the expense from rent.
- Reduce rent pending a court's fair determination.
Most jurisdictions require withheld rent to be placed in escrow as proof of good faith. Neither party may access that account without court permission.
Landlord Tort Liability to Third Parties
Modern exceptions limit the common-law rule placing property-related liability on the tenant.
At common law, a landlord owed no duty to protect the tenant or the tenant's licensees and invitees from injuries on the premises. For this purpose, the tenant was treated as the owner. Modern doctrine recognizes five exceptions.
- Common areas: the landlord must maintain shared spaces, including hallways and staircases.
- Latent defects: the landlord must warn of hidden defects the landlord knows or should know about.
- Negligent repairs: once the landlord undertakes a repair, careless work creates liability even if there was no initial duty to repair.
- Public use: liability exists when the landlord knows or should know of the public use, a defect, and the likelihood that the tenant will not fix it.
- Short-term furnished dwelling: for a furnished lease lasting three months or less, tenants are invitees and landlord liability does not depend on knowledge of the defect.
Examples of public uses include a concert hall, restaurant, or store.
A tenant rents a furnished apartment for two months and is injured by a loose stair tread in a shared hallway. The landlord says the defect was unknown. Which exception or exceptions may still impose liability?
The common-area exception applies because the stair is in a shared hallway. The short-term furnished-dwelling exception also applies because the lease lasts no more than three months, and that rule does not depend on the landlord's knowledge.
Transferring a Tenant's Interest
Assignments and subleases rearrange the parties' property and contract relationships in different ways.
Complete and Partial Transfers
| Transfer | Landlord | Original tenant | New tenant |
|---|---|---|---|
| Assignment | Lessor | Assignor | Assignee |
| Sublease | Lessor | Sublessor | Sublessee |
Contract Privity and Estate Privity
Promises to pay rent or taxes and to make repairs are examples of covenants running with the land. A landlord and tenant ordinarily have successive interests because the tenant's leasehold is followed by the landlord's reversion.
Legal Relationships After an Assignment
Before assignment, the lessor and original tenant share both forms of privity: they signed the lease, and the tenant's estate precedes the lessor's reversion.
- The lessor and assignee gain privity of estate because their interests are now successive.
- The lessor and assignor lose privity of estate because their interests no longer follow one another.
- The lessor and assignor retain privity of contract until the original lease ends.
- The lessor and assignee generally lack privity of contract because they did not contract together.
The assignor and lessor remain secondarily liable to each other through their contract, meaning recourse arises if the assignee cannot be sued or cannot pay. The lessor and assignee may enforce against each other the covenants running with the land.
Legal Relationships After a Sublease
Suppose a five-year tenant subleases the premises for one year after completing year three. Because the original tenant will recover possession before the original lease ends, the transfer is a sublease.
- The lessor and sublessor retain both privity of contract and privity of estate: their original contract remains, and their interests are successive.
- The sublessor and sublessee have both forms of privity because they made the sublease and the sublessor takes the property back afterward.
- The lessor and sublessee have neither form. They did not contract, and the sublessor's intervening interest prevents succession between them.
A Full Map of Transfer Relationships
| Scenario | Relationship |
|---|---|
| Landlord assigns | Original landlord and tenant: contract only. |
| Landlord assigns | Original landlord and new landlord: contract. |
| Landlord assigns | New landlord and tenant: estate. |
| Tenant assigns without assumption | Landlord and original tenant: contract. |
| Tenant assigns without assumption | Original and new tenants: contract. |
| Tenant assigns without assumption | Landlord and new tenant: estate. |
| Tenant assigns with assumption | Landlord and original tenant: contract. |
| Tenant assigns with assumption | Original and new tenants: contract. |
| Tenant assigns with assumption | Landlord and new tenant: both contract and estate. |
| Tenant subleases | Landlord and original tenant: both contract and estate. |
| Tenant subleases | Original and new tenants: both contract and estate. |
| Tenant subleases | Landlord and new tenant: neither. |
Transfer Restrictions and Later Consent
A lease may forbid transfers. If the landlord later approves one transfer, however, that consent may require approval of further transfers by the same tenant. To authorize only the particular transfer, the landlord must expressly preserve the right to object to later ones.
Common misconceptions
Watch out: A month-to-month tenancy always ends exactly one month after notice is delivered.
Instead: The termination date must also be the final day of a payment period, which may produce more than one month's notice.
Watch out: Either party may end a tenancy at will immediately and without warning.
Instead: The tenancy lacks a fixed end date, but reasonable notice remains necessary.
Watch out: A landlord may change the locks or physically remove a tenant who has failed to pay rent.
Instead: The landlord must use legal remedies and may not employ self-help, which carries civil and criminal consequences.
Watch out: A residential tenant may sign away the implied warranty of habitability.
Instead: The warranty is nonwaivable, so a purported surrender in the lease is ineffective.
Watch out: An assignment ends every relationship between the landlord and the original tenant.
Instead: Their estate privity ends, but their contract privity continues until the original lease terminates, leaving possible secondary liability.
Lesson recap
- The four leaseholds are the term of years, periodic tenancy, tenancy at will, and tenancy at sufferance, each with a distinct duration and termination rule.
- Possession, rent, and waste form the common-law core; quiet enjoyment and habitability are the central reform protections.
- Modern landlord liability also covers common areas, latent defects, negligent repairs, public use, and short-term furnished dwellings.
- Available remedies depend on the breached duty, whether the tenant remains, and whether requirements such as notice, failure to cure, or mitigation have been met.
- An assignment transfers the entire remaining interest, while a sublease preserves an intervening interest in the original tenant.
- Contract privity permits enforcement of all lease covenants; estate privity reaches only covenants running with the land.