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Types of Residential Leases
Types of Residential Leases
A residential lease is a legal agreement between a landlord and a tenant that extends to the tenant an exclusive right to use and enjoy a property as his primary residence. In the U.S., there are three common types of residential lease agreements into which the parties may enter, depending on their specific needs: a fixed-term lease, a periodic lease and a holdover lease.
It is worth nothing that landlord/tenancy laws can vary significantly from state to state, and so your state’s specific guidelines for residential leases may differ from the information provided.
A fixed-term lease is the most common type of residential lease available. Fixed-term leases are so called because the length of the tenant’s stay is for a specified period of time, with a defined move-in and expiry date. While many fixed-term residential leases typically last for one or two years, fixed-term leases can last for as little as three months or as long as 10 years, depending on the tenant’s and the landlord’s needs. A landlord can also draft a fixed-term lease to coincide with certain events instead of following a specified timeline. For example, a fixed-term lease can begin upon the tenant’s enrollment in college and expire upon the tenant’s graduation.
Fixed-term leases automatically terminate on the end date or event, at which time either the parties renew the agreement or the tenant moves out. Neither the landlord nor the tenant can terminate the lease agreement early unless one party has a valid claim for breaching it. Otherwise, the landlord must permit the tenant to continue living in the unit and the tenant must continue paying rent for the unit until the day the lease expires.
A periodic lease, also called a month-to-month lease, is residential lease that operates on a 30-day period. The tenant is only guaranteed the unit and the landlord is only guaranteed to have a tenant in that unit for the current month. Periodic leases are common in short-term situations, like summer vacation rentals or college apartments, where the tenant may only be in the area for a brief period of time.
Rental payments, rights and responsibilities are the same as they would otherwise be for a fixed-term lease, except both parties may terminate the lease at any time with at least 30 days’ notice. Neither party needs a reason for ending the agreement, although terminations for discriminatory are illegal.
A holdover lease, also called a tenancy at sufferance, is a residential lease agreement that arises from the expiration of a previous fixed-term lease. Holdover leases are not written or verbal arrangements; instead, the arrangement is created when the tenant remains living in the unit, and the landlord takes no steps to remove him. It is therefore understood, even if neither party discusses the arrangement.
Even though the lease has expired, the terms of the lease (except the length of the fixed terms) still apply for as long as the tenant remains in the unit. However, the landlord can eject the tenant from the unit at any time after the original lease expires without providing prior notice. Depending on the particular state, the tenant may have 24 to 48 hours to move immediately once evicted from the unit.