Tenancy At Will vs. Tenancy At Sufferance

Last Updated on Tuesday, 13 October 2015 06:14 Written by Chris Griswold Tuesday, 13 October 2015 06:14

The purpose of this article is to solely address the attributes of a tenancy at will vs. a tenancy at sufferance arrangement within the context of what happens at the natural expiration of a written commercial lease agreement when a tenant remains on the leased premises.

Simply put, if there’s a written lease and the lease expires naturally, by its own terms, whether a tenancy is at will or at sufferance depends upon one simple thing:  the consent (or lack thereof) of the landlord for the tenant to remain in possession.

If the landlord authorizes the tenant to remain in possession, the tenancy is at will (and becomes a periodic tenancy as soon as the tenant begins paying rent regularly).  If the landlord doesn’t authorize tenant’s continued possession, the tenancy is at sufferance.

What’s one reason for us to have the legal fiction of the tenancy at sufferance and what are its attributes?  Without it, the statute of limitations on adverse possession would begin running upon the natural expiration of the written lease and, upon the expiration of such required statutory period (15 years for Oklahoma, and 10 years for Texas), the hold over tenant could have arguably acquired fee simple title to such leased premises by bringing suit and demanding title to same by its simple adverse possession of the leased premises for the required time period above – something a landlord can easily prevent by declaring (in the written lease) that such holdover tenant’s possession of the leased premises after the natural expiry of the written lease to be one of a tenancy at sufferance.  The payment of rent by tenant (and the acceptance thereof by landlord) during the tenancy at sufferance can raise arguments by either party as to whether there is a true tenancy at sufferance arrangement, since the acceptance of rent by landlord could be argued to be landlord’s tacit consent to tenant’s occupancy – subject to the written terms and provisions of the lease (which could squarely address these issues).

What are the attributes of a tenancy at will and what are its strengths?  An arrangement, usually unwritten, whereby the landowner permits the tenant to be on the property with no advance understanding as to the termination date or the amount of the payment of rent.  This arrangement can, in the real world, also briefly follow the natural expiration of a written lease for a very brief time – until the tenant begins paying rent regularly (which is when a periodic tenancy is created and the tenancy at will terminates).  A tenancy at will arrangement, even after being converted to a periodic/month-to-month tenancy arrangement by the regular payment of rent, can be conveniently terminated by either the landlord or tenant by giving advance notice to the other party of such party’s intent to terminate the leasehold (usually 30 days ahead of the desired termination date, depending on the circumstances), unless the lease says otherwise.  Accordingly, while not required, the lease could provide that tenant can remain after the natural expiration date provided the tenant pays rent at some higher stated rate (usually 150% to 200% of the previous rate), not to exceed some stated period of time – thereby allowing the tenant some time flexibility for moving out while also guarantying the landlord a stated amount of rent (while the current tenant remains in possession) while a new, replacement tenant is being secured.

The information presented within this article is of a general nature and is not intended to be relied upon as legal advice in any particular matter without first consulting qualified counsel.

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Leases v. Licenses v. Easements

Last Updated on Thursday, 14 July 2011 04:03 Written by Chris Griswold Thursday, 1 April 2010 09:01

Knowing the basics pays dividends.  At some point, it will make a big difference in the outcome of one of your deals.  Accordingly, we’re going to review some of the basic differences between leases, licenses and easements.  Why? Each vehicle has its own different strengths/weaknesses and I’ve seen each used within the wrong context.  Read more below….

Leases v. Licenses v. Easements

Revocable? Perpetual? Assignable?
Lease No No Yes
Easement No Yes n/a
License Yes No No

Absent certain language within the document and/or certain special circumstances, the foregoing table quickly summarizes the basic, legal discrepancies between each type of vehicle.  What practical effect do these differences have on you?

Parking Situations:  I’ve seen property owners grant easements to other adjoining property owners for parking space.  While this may sometimes be in the best interests of the granting property owner, it’s usually not.  Why? Easements are not usually revocable and are usually perpetual (which makes the issue of whether they’re assignable moot).  This all makes granting a parking easement a little risky since you might not like the future owners of the adjoining property.  Instead, you’d probably want to use either a lease or a license – depending upon the situation.

Vacating Right of Ways:  I’ve seen back-to-back property owners discuss the possibility of jointly vacating an alley (which would result in each property owner getting back their half of the alley) just to overlook the possibility that, unless they enter into a “reciprocal easement agreement” at the time of vacation, the other property owner could ostensibly fence off their half of the alley thereby constructively blocking off the other’s access to the back of their building (depending on the width of the alley).  In other words, granting each other mutual leases or licenses upon the other’s land won’t long-term protect either them or their respective successors (since neither a lease nor a license is perpetual in duration).

Snowcone Stands, Parking Lot Nurseries, Christmas Tree and Pumpkin Lots:  The big things here are: 1) seasonal/temporary use, and 2) your familiarity with the operators.  It’s okay for a property owner to grant a lease to an operator they’ve done business with for years for a 6 month term (i.e., Spring through Summer) to sell plants or to serve snow cones.  However, it’s likely unwise to grant a lease to a new and unknown operator who wants to sell pumpkins for just a few weeks.  Why? As a property owner, you won’t mind granting the lease with a hard, irrevocable, 6 month term to the repeat operator, but, with the new operator who only needs the space for a month or so, you’d probably want to use a license in order to retain the right to quickly revoke an unworkable/undesirable situation – especially since the term is so short….

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“I take special care when selecting business partners to represent my company and look for those who exhibit the same levels of professionalism and integrity that I try to achieve.  Chris Griswold definitely meets these requirements and is considered a very valuable member of the JOBO Properties team.  I have no hesitation in recommending Mr. Griswold to handle your business and commercial real estate transactions.”

Darren Ford / Owner & Developer of JOBO Properties, L.L.C. / Oklahoma City, Oklahoma

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Nuts & Bolts of Notice Letters

Last Updated on Thursday, 14 July 2011 04:05 Written by Chris Griswold Friday, 1 May 2009 09:01

Notice Letters.  We all have written and gotten them.  We might even be waiting on one in the mail right now (I know I am).  From time to time, we all have something come up in one of our deals that requires that we either write one or cause one to be written.  In fact, during these turbulent economic times, you may find yourself writing or receiving these types of letters a little more often than you’d like!  Accordingly, I’d like to shed some light, in general terms, on what constitutes a good notice letter….

Nuts & Bolts of Notice Letters

If done correctly, they save the day.  If done wrong, someone is potentially in real trouble.  It’s funny that something so important is usually located at the end of the contract (or the lease), written in such small print and is typically treated (in its entirety) over the course of a mere two to three sentences, or less.  No wonder the old adage that “big things come in small packages” comes to mind when I think about the concept of notice letters.  Accordingly, I want you to walk away knowing three, basic things about the proper drafting and management of notice letters:

First, check the actual notice addresses for the other party (or parties) who are required to receive such notice.  These notice addresses are usually set forth in the first few pages of the contract; if not there, look at the end of the document.  Keep in mind that these addresses may have already changed.  Accordingly, look in your files for any letters, e-mails, contractual amendments and/or other correspondence received from this other party (or parties) which has changed their formal notice address.  Remember, it doesn’t do any good to write a fancy letter if the address is wrong….

Second, check the language usually located in the back of the contract which is most often entitled “Notices.”  The purpose of this language is to set forth exactly how notice shall be delivered and will commonly talk about how notice letters should be mailed “via certified mail return receipt requested” or by a “nationally recognized overnight courier.”  If it says that, be sure and do it.  You’d be surprised to know how many people deliver notice letters via first class or registered mail just to find out that they didn’t give the other party good and proper notice (tip: registered is not the same as certified; “registered” means “insured” and is used for insuring the value of parcels such as diamonds, precious metals, etc… while “certified” means “signed-for” which is the purpose of notice letters).

Third, remember that after you send out your notice letter and receive back the “green card” in the mail, you’re still not “out of the woods” as it were.  Why?  You have to actually keep up with the “green card” or other packaging receipt in order to prove, often months or even years later, that you delivered and the other party actually received the notice letter.  Oftentimes, I get calls from people to the effect that they know the other party received their notice letter but the green card (proving such receipt) can’t be found in the files.  This can be bad….  What should you do?  I recommend that when you get back the green cards, be sure to staple them to the copy of the notice letter that you put into your file.  This will keep those small, mint green and oddly shaped pieces of paper from walking away….

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“I take special care when selecting business partners to represent my company and look for those who exhibit the same levels of professionalism and integrity that I try to achieve.  Chris Griswold definitely meets these requirements and is considered a very valuable member of the JOBO Properties team.  I have no hesitation in recommending Mr. Griswold to handle your business and commercial real estate transactions.”

Darren Ford / Owner & Developer of JOBO Properties, L.L.C. / Oklahoma City, Oklahoma

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