National Real Estate Exam (PSI)Leasing and Property ManagementMedium
A tenant's lease for a commercial property expires on August 31st, but they continue to occupy the premises and pay rent, which the landlord accepts. No new agreement has been signed. What type of tenancy is created in this situation?
- APeriodic tenancy
- BTenancy at will
- CTenancy at sufferance
- DEstate for years
Show answer & explanationAnswer & explanation
Correct answer: A. Periodic tenancy
When a tenant remains in possession after a lease expires and the landlord accepts rent, a periodic tenancy is typically created. This implies a new agreement for an indefinite term, renewing automatically for the period for which rent is paid.
Why the other options are wrong
- B. Tenancy at will can be terminated by either party at any time with proper notice, but it generally does not arise from a holdover with rent acceptance.
- C. Tenancy at sufferance occurs when a tenant remains without the landlord's consent, which is not the case here as rent is accepted.
- D. An estate for years is a lease for a fixed, definite period, which has explicitly expired in this scenario.
Periodic Tenancy
A leasehold estate that continues for an indefinite period, automatically renewing for successive periods (e.g., month-to-month, year-to-year) until proper notice of termination is given by either party.
- No definite end date, continues until notice is given.
- Often created by holdover tenants whose landlord accepts rent.
- Notice period for termination typically matches the payment period.
Memory trick: Fixed, Periodic, Will, Suffer - Know your tenant's fate!