A Tenant’s right to possess Real Estate for the term of the lease is called a leasehold (less-than-freehold) estate. A leasehold is generally considered personal property. Just as there are several types of freehold (Ownership) estates, there are different kinds of leasehold estates.
Estate for Years
An estate (tenancy) for years is a leasehold estate that continues for a definite period of time. That period may be years, months, weeks, or even days. And estate for years (sometimes referred to as fixed term tenancy) always has specific beginning and ending dates.
When the estate expires, the lessee is required to vacate the premises and surrender possession to the lessor. No notice is required to terminate the estate for years because the lease agreement states a specific expiration date. When the expiration date comes, the lease expires, and the Tenant’s rights are extinguished.
If both parties agree, the estate for years may be terminated before the expiration date. Otherwise, neither party may terminate without showing that the lease agreement has been breached. Any extension of the tenancy requires that a new contract be negotiated.
As is characteristic of all leases, a tenancy for years gives the lessee the right to occupy and use the leased property according to the terms and covenants contained in the lease agreement. It must be remembered that a lessee has the right to use the premises for the entire lease term. That right is unaffected by the original lessor’s death or sale of the property, unless the lease states otherwise.
Estate from Period to Period
An estate from period to period, or periodic tenancy, is created when the Landlord and Tenant enter into an agreement for an indefinite time. That is, the lease does not contain a specific expiration date. Such a tenancy is created for a specific payment period – for instance, month to month, week to week, or year to year – but continues indefinitely until proper notice of termination is given. Rent is payable at definite intervals. A periodic tenancy is characterized by continuity because it is automatically renewable under the original terms of the agreement until one of the parties gives notice to terminate. In effect, the payment and acceptance of rent extend the lease for another period.
An estate from period to period also might be created when a Tenant with an estate for years remains in possession, or hold over, after the lease term expires. If no new lease agreement has been made, a holdover tenancy is created. The Landlord’s acceptance of rent usually is considered conclusive proof of acceptance of the periodic (holdover) tenancy. The courts customarily rule that a Tenant who hold over can do so for a term equal to the term of the original lease, provided the period is for one year or less. For example, a Tenant with a lease for six months would be entitled to a new six-month tenancy. However, if the original lease were for five years, the holdover tenancy could not exceed one year. Some leases stipulate that in the absence of a renewal agreement, a Tenant who holds over does so as a month-to-month Tenant and can then be terminated with a 30-day notice.
Notice Required to Terminate Periodic Tenancy
The following notices are required by Illinois statute
- Tenancy from year to year – At least 60 days’ written notice is required at any time within the four-month period prior to the last 60 days of the lease period.
- Tenancy from month to month – In any periodic estate having a term of less than year to year but greater than week to week, 30 days’ written notice is required.
- Tenancy from week to week – 7 days’ written notice is required
Estate at Will
An estate (tenancy) at will gives the Tenant the right to possess property with the Landlord’s consent for an unspecified or uncertain term. An estate at will is a tenancy of indefinite duration: it continues until it is terminated by either party giving proper notice. No definite initial period is specified, as is the case in a periodic tenancy. An estate at will is automatically terminated by the death of either the Landlord or Tenant. It may be created by express agreement or by operation of law. During the existence of a tenancy at will, the Tenant has all the rights and obligations of a lessor-lessee relationship, including the duty to pay rent at regular intervals.
Estate at Sufferance
An estate (tenancy) at sufferance arises when a Tenant who lawfully possessed real property continues in possession of the premises without the Landlord’s consent after the rights expire. This is also known as a holdover. This estate can arise when a Tenant for years fails to surrender possession at the lease’s expiration and continues until the Landlord completes the eviction process. This estate can also arise when a Tenant is in breach of the lease, has been informed of the breach, and has not cured the breach within time limits specified by Illinois law.
In Illinois, a Landlord has the option of considering an estate at sufferance (a holdover Tenant’s action) as being a willful withholding of possessions, in which case the Landlord is entitled to charge double rent.
