What Is Tenancy at Will?

Tenancy at will is a rental agreement that allows either party to terminate the agreement at any time after reasonable notice. Compared with traditional leases that bind parties to a fixed term, a tenancy-at-will agreement incorporates added flexibility as well as uncertainty. It may appeal to those who value adaptability, such as tenants who may need to relocate quickly or landlords who prefer not to be tied down to long-term commitments. However, with this flexibility comes a lack of security, as the agreement can be ended with little warning.

If you want to build out your real estate portfolio, a financial advisor can help you analyze and manage investments.

How Tenancy-at-Will Works

Tenancy at will is a flexible rental arrangement that offers both landlords and tenants the freedom to end the lease at any time, provided they give proper notice. Unlike fixed-term leases, which bind both parties for a set period, a tenancy-at-will agreement can be terminated by either party with reasonable notice, typically 30 days.

Similarly, tenancy at will can continue indefinitely until ended by one or the other party. This type of arrangement can appeal to individuals who value flexibility, such as those who may need to relocate quickly and unexpectedly for work or personal reasons.

Both landlords and tenants must adhere to state and local laws governing notice periods and eviction procedures. For example, landlords cannot evict tenants without proper notice, and tenants are required to pay rent on time and maintain the property.

In a tenancy-at-will arrangement, it’s incumbent on both parties to understand their rights and responsibilities to avoid potential disputes.

Advantages of Tenancy-at-Will

Tenancy at will can be beneficial for both landlords and tenants. Here are five advantages of a tenancy at will:

Flexibility for both parties: Tenancy-at-will agreements allowing either landlord or tenant to end the lease with minimal notice. This is particularly advantageous for tenants who may need to relocate quickly or landlords who wish to sell or repurpose their property without being tied to a long-term lease.
Simplified lease terms: These agreements typically involve fewer formalities and less paperwork compared to traditional leases. This can save time and reduce legal complexities, making it easier for both parties to understand and manage their obligations.
Cost-effective solution: Without the need for extensive legal documentation, landlords and tenants can save on legal fees and other costs associated with drafting and maintaining a more complex agreement.
Ideal for short-term needs: Tenancy at will serves the requirements of students or others seeking short-term housing solutions or temporary property management.
Ease of negotiation: The informal nature of tenancy at will agreements allows for easier negotiation of terms.

Potential Disadvantages of Tenancy at Will

A landlord reaching an agreement with tenants.

Tenancy-at-will arrangements also come with potential disadvantages. Here are five that you should consider:

Lack of long-term security: Tenancy-at-will agreements do not provide long-term security for tenants, as either party can terminate the agreement with minimal notice.
Potential for frequent rent increases: Without a fixed-term lease, landlords have the flexibility to adjust rent more frequently. This can result in unexpected rent hikes.
Limited legal protections: Tenants in a tenancy-at-will arrangement may have fewer legal protections against changes in lease terms compared to those with a formal lease.
Challenges in planning for the future: Tenants may have difficulty committing to a job or enrolling children in local schools, which impact long-term personal and professional decisions.
Potential for miscommunication: Without a formal lease, there may be a higher risk of miscommunication between landlords and tenants regarding responsibilities and expectations. This can lead to disputes and misunderstandings that could have been avoided with a more structured agreement.

How to Vacate a Tenancy at Will

When a tenant decides to vacate a tenancy at will, the first step is to provide the landlord with written notice. This notice should clearly state intention to leave and the date the property will be vacated.

It’s important to check the lease agreement and local regulations to ensure compliance with the required notice period, which is often 30 days. Providing written notice fulfills legal obligations helps maintain a positive relationship with the landlord, which can be beneficial for future rental references.

Conducting a final walkthrough of the property with the landlord can help a tenant recover a security deposit. During the walkthrough, address any repairs or cleaning that may be needed and document the condition of the property with photos or videos. This documentation can serve as evidence in case of any disputes regarding the return of the deposit.

Bottom Line

Tenants and a landlord meeting to discuss the termination of a lease.

Tenancy at will allows either landlord or tenant to terminate the lease at any time, provided they give reasonable notice, which is typically 30 days. Unlike fixed-term leases, tenancy at will does not bind the parties to a specific duration, making it an ideal choice for those who require adaptability due to changing circumstances. One of the main advantages of tenancy-at-will is its simplicity and ease of modification.

Tips for Investment Planning

If you want to create a real estate investment portfolio, a financial advisor could help you identify real estate opportunities and manage those investments. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you’re investing in real estate, you’ll need to include estimates of your property taxes in your financial analysis. SmartAsset’s property tax calculator will help you get an estimate.