Real Estate Terms

Estate at Will in Real Estate

You need to know several types of leasehold estates for your real estate exam, such as periodic tenancy, estate for years, tenancy at sufferance, and estate at will. This article will cover estates at will, what it is, how it works, and how it differs from other leasehold agreements you may see on the real estate exam.

What Is an Estate at Will?

An estate at will is a leasehold estate involving a tenant and landlord relationship that lasts until either party wishes to terminate the agreement.

There is no set period for the length or expiration of the lease. Therefore it can last for one day or indefinitely, giving the landlord and tenant more flexibility than a standard lease agreement.

Sometimes also called a tenancy at will, typically, it is a verbal agreement with no written contract agreement, as a written lease must specify the duration of the contract. 

What Are the Advantages of an Estate at Will?

There are both pros and cons of an estate at will. The most common advantage is that the tenant and landlord or property owner have flexibility on the length of stay and are not locked into a written lease agreement.

An estate at will is also easier to form because there is no typical paperwork, security deposits, inspection walkthrough, or other processes to go through as opposed to a formal lease.

What Are the Disadvantages of an Estate at Will?

The most significant disadvantage of a tenancy at will agreement is that it does not guarantee the tenant a specific length of stay. The property owner can require the tenant to vacate at any time, per local and state laws.

Another reason many people do not choose this type of tenancy is because of the lack of a formal lease agreement. Without a written signed document outlining terms and rules, legal action against either party involved would be complicated.

How Does an Estate at Will Work 

An estate at will works similarly to other rental agreements; it just has more flexible rules. A landlord (also known as the lessor) grants a tenant (or lessee) the right to live on their property. It could be a whole house or just a bedroom in the landlord’s home.

The tenant then agrees that he will pay rent for the time he is there, but neither define how long the tenancy lasts or when it will end. The tenant agrees to live there until they decide not to, or the landlord does not want to rent to them anymore.

An estate at will may sound kind of scary, as there is no legal document defining how the lease will work. However, state and federal laws regarding a landlord and tenant relationship still define giving advanced notice of vacancy or eviction, discrimination, and other issues.

Estate at Will Examples

Let’s go over a few examples of an estate at will. Since questions on the real estate exam may present in story form, it will help solidify these topics in your mind.

Estate at Will Example 1:

John is looking for a place to stay and sees a rental property in a neighborhood close to work. He calls the landlord and says he would love to live there for a while until he changes jobs but doesn’t know when that will be. Landlord Paul knows tenant John and does not want to go through the formal procedures of writing a lease, collecting security deposits, and background checks. Landlord Paul agrees to let tenant John live there however long he wants for 50 dollars a day.

John and Paul have formed an estate at will or tenancy at will arrangement. John lives in the house and pays rent until one day, his job changes, and he must move out. John gives his notice to his landlord, packs his personal belongings, and moves out the next day. Because an estate at will has no defined end date, it can change at the choice of either party, even on the same day.

Estate at Will Example 2:

Now let’s go through an example that frequently happens with real estate. Jenny owns a house with three bedrooms near a college campus. She has a family member who goes to college and is looking for a place to stay while in school. Jenny’s cousin Abby wants to rent a bedroom and offers to pay $400 a month for it but doesn’t want to be locked into a lease for a set period or have a deadline of when she has to move out. 

Jenny and Abby agree on the amount and terms verbally, Abby rents the room, and an estate at will is formed. After some time, Jenny and Abby don’t get along anymore, and Jenny decides she wants a new roommate, so she tells Abby to leave the next day. Abby packs her things and leaves. 

This is an estate at will because there is no time period she is required to stay and no end date at which she has to leave. 

Other Types of Estates

On the real estate exam, you may see a few different types of estates, so it may be helpful to know how they differ from an estate at will agreement. These all fall under leasehold estates, meaning it is a rental agreement between a landlord and tenant, which is why the lease is in the title. 

Periodic estates – this is an estate that doesn’t define an end date for the lease; rather, it goes from period to period. The best explanation is a month-to-month lease, but it could also be a year-to-year lease. 

Estate for years – This is a lease with a specified end date. It does not have to last for years, but this contract terminates on a specified end date, unlike periodic estates or estates at will. 

Estate at sufferance: To best remember this lease, think of the landlord’s suffering. Estate at sufferance happens when a tenant will not vacate the property and becomes a holdover tenant, violating the tenancy agreement by staying past his defined lease period. They once had a legal right to occupy the property but now will not leave and must be evicted. 

Estate at will: As we saw earlier, this is a lease with no end date and no defined period when the lease will last. The length of stay is freely at the will of the landlord and the tenant. 

What To Know for the Real Estate Exam

For the real estate exam, you need to know that an estate at will is the same as a tenancy at will, defined as a leasehold estate involving a tenant and landlord relationship that lasts until either party wishes to terminate the agreement. There is no set end date and typically no written formal agreement. The tenant and the landlord have the right to end the lease anytime. 

You should also remember the different types of leasehold estates and what makes them unique from an estate at will so you can choose the correct estate on your exam if presented with a combination of these answers. 

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