What is an Estate At Will?
How does it work?
What are the pros and cons of an estate at will arrangement?
In this article, I will break down the definition of Estate At Will so you know all there is to know about it!
Keep reading as we have gathered exactly the information that you need!
Let’s understand the meaning of estate at will and its implications!
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What Is An Estate At Will
In real estate, estate at will is a type of verbal lease agreement where the landlord and lessee agree that the lessee’s right of possession may be terminated at any time by any party and where the term of the lease is indefinite.
In other words, you have a verbal agreement between the landlord and the tenant who is authorized to live in a rental unit (estate) and where either party may terminate the agreement at will (at will).
Most often, the landlord will enter into a written and formal lease agreement with the tenant for the use and rental of a rental unit.
However, when the landlord and the tenant do not have a written agreement and where the tenant is authorized to live in a unit, we’ll refer to that as an “estate at will”.
Estate At Will Definition
According to Investopedia, an estate at will is defined as:
A property tenure that can be terminated at any time by either the tenant or the owner/landlord. It exists without a contract or lease and usually does not specify the duration of a tenant’s rental or the exchange of payment.
As you can see from this definition of estate at will, it can be summed up as:
- A property tenure
- Without a contract or lease
- Between landlord and a tenant
- Without a specific duration
- That may be terminated by either party at will
Types of Property Tenure
An estate at will in real estate can be contrasted with other types of lease agreements, such as:
- Estate for years
- A periodic tenancy
- Estate at sufferance
An estate for years is when the lease of a property is for a fixed period of time starting at a specific date and ending on a specific date.
A periodic tenancy is a type of arrangement that is renewed for a period-to-period (like month-to-month, or year-to-year).
Estate at sufferance is when a tenant holds on to the leased property even after the expiration of the term in a wrongful manner and possibly without paying rent.
Pros And Cons of Estate At Will
What are the advantages and disadvantages of holding property under an estate at will arrangement?
The main advantage of an estate at will arrangement is that it is easy to set up.
When the landlord and the tenant reach a verbal agreement on the use or rental of a particular property, apartment, house, or unit, and the tenant effectively moves in, the legal relationship is formed.
Sometimes the landlord or tenant will not want to go through the complexity of a formal lease agreement, security deposits, inspection procedures, and other legal obligations found in the lease.
Another advantage for both the tenant and the landlord is that an estate at will structure is flexible allowing both parties to end the relationship at any time.
There are commercial tenants who are looking for the flexibility of renting a place without much commitment and be able to leave the premises without any penalty or fees.
On the other hand, there may be important disadvantages in getting into an estate at will framework.
The main disadvantage for the landlord is that without a formal agreement, it may be difficult to enforce various obligations on the tenant over and above the minimum baseline provided by law nor is there any certainty as to how long the tenant will remain on the premises.
For the tenant, the biggest disadvantage is that the landlord can ask that it vacate the premises at any time leaving it in a constantly precarious position.
Estate At Will Legal Implications
What are the legal rights and obligations of the parties in the context of an estate at will relationship?
Party Rights And Obligations
With regards to the rights of the landlord (corresponding to the obligations of the tenant):
- The tenant must pay rent as agreed
- The tenant must not cause damage to the landlord’s property (except for normal wear and tear)
- The tenant must notify the landlord to terminate the rental arrangement
With regards to the rights of the tenant (corresponding to the landlord’s obligations):
- The landlord must ensure the property is safe for occupation
- There is no set term for the renting arrangement
- The landlord must provide written notice to the tenant to enter the premises for any reason such as to do repairs or other
- The landlord must provide written notice to the tenant to end the renting arrangement
The Vacating Property
In an estate at will set up, a tenant has the right to provide notice to the landlord to terminate the estate at will arrangement at any time.
The notice should:
- Typically be in writing (based on most state laws)
- Outline the reasons why the tenant wishes to leave the premises or move out
- Provide the minimum notification notice as per state laws (some states require a minimum 7-day notice, while others are 30 days, or even longer)
If the landlord wishes the tenant to vacate the property, it must also provide a notice, generally in writing, providing the reasons why the tenant should move out and respect the state laws specifying how quickly the landlord can ask the tenant to vacate the premises.
Landlords and tenants should consult with a real estate attorney who understands the estate at will laws to get specific legal advice on their legal rights and obligations.
Landlord Evicting Tenant
In cases when the tenant does not respect the terms of the estate at will, the landlord may move to evict the tenant from the premises.
Particularly, a landlord can choose to evict a tenant when the tenant is not paying rent, has caused damage to the property, or has violated the law in certain ways resulting in the landlord’s decision to evict.
Estate At Will Example
Let’s look at an example of an estate at will to better understand the concept.
The most common example where an estate at will relationship may be formed is when a property owner allows a family or friend to live in the property without entering into a formal lease agreement.
In this case, the relative or friend is authorized to live in the property, the parties have not defined a term for the use of the premises, and either party may end the relationship at will, and perhaps there may be an oral contract for the tenant to pay a certain amount of money as rent.
Since the property owner does not expect the family member or friend to cause damages to the property, it may not feel compelled to formalize the relationship by signing a lease agreement.
Another example of when an estate at will agreement may be entered into is in the context of a pending sale of a property.
If a landlord is selling a property and does not want to compromise the sale with a tenant vacating, it may negotiate an estate at will arrangement giving financial incentives to the tenant to stay based on an estate at will lease.
Once the transaction is completed, the new landlord can then either negotiate a new lease with the tenant or the tenant may choose to eventually leave.
Meaning of Estate At Will Takeaways
So there you have it folks!
What is an estate at will?
What is the estate at will real estate definition?
An estate-at-will refers to property tenure where a property owner (the landlord) and a property user (the tenant) do not have a formal and written lease agreement, the tenant has been given the permission to use the rental unit without a term, and where both parties may terminate the relationship at any time.
Since the parties do not have a lease contract, their relationship is governed by state laws and in some cases federal laws (in cases of discrimination for example).
The main reason why landlords and tenants end up in an estate-at-will structure is that they want to avoid the complexities of negotiating a complicated contract and they want to flexibility to have an “at-will” structure where they can end the relations at any time.
Estate-at-wills have the following characteristics:
- They are between a property owner and user (landlord and tenant)
- There is no duration specified for the agreement
- Any party can end the relationship at any time
- There is no written agreement outlining the terms and conditions of the lease
On the flip side, since the arrangement can be terminated by either party, the tenant will not know for how long it can remain on the premises and may not be able to make long-term plans.
Quite often, we’ll see this type of setup between family members, relatives, friends, and people who know and trust one another and who can rely on one another’s verbal understandings.
I hope I was able to explain to you what estate-at-will means, how it works, and its legal ramifications.
Since this article is general in nature, if you are dealing with a particular issue or dispute relating to an estate-at-will set up and need legal advice, you should call a real estate attorney or leasing lawyers for a consultation.
Let’s look at a summary of our findings.
Define Estate At Will Overview
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