Picture this: you’ve just successfully completed college and did the whole cap-and-gown, smile-for-your-mother-while-getting-handed-your-diploma graduation thing. As you load up your car and leave the days of dorm rooms behind, you begin your journey to adulthood. In just a few short weeks, you’ll (hopefully) start working at your new salaried job while cultivating a career. And when you leave your desk behind at the end of the day, you’ll go home to your very first apartment.

When young people start living on their own after college, it’s highly likely that they will rent their new abode. Very few individuals are able to buy a home fresh out of college. When you rent, you have what is considered a leasehold, in which the tenant (you) has a present possessory interest in the leased property, and the landlord (the person you pay in order to live there) has a future interest when your lease has expired. The contract that governs the relationship between you and your landlord is called a lease.

As a first time renter, it is important to understand the nature of your leasehold. In this article, we’ll talk about the different types of leaseholds, and what this means for you and your landlord. Specifically, we’ll look at tenancies for years, periodic tenancies, tenancies at will, and tenancies at sufferance.

First, let’s explore tenancies for years.

Tenancies for years are leaseholds which continue for a set period of time. For example, if you sign a lease for twelve months, or one year, you have a present possessory interest in the premises for that fixed period of time. The landlord from whom you are renting has a future interest in that when that fixed period of time is up, the property reverts back to the landlord.

A tenancy for years will likely be created through a written lease, especially if the specific period of time is more than one year. You do not, however, have to terminate the leasehold with a written document. Once you reach the end of the fixed period of time set forth in the lease, your leasehold interest will terminate automatically.

Let’s use a hypothetical to illustrate a tenancy for years. After college, you move to a new city and find an apartment complex that you really like. You walk into their office, and you agree to sign a lease indicating that your move-in date will be August 1st, and your move-out date will be July 31st of the following year. This is a tenancy for years because you have an interest in the property for a fixed period of time—specifically one year. On July 31st of the following year, absent a new lease agreement, your interest in the premises will automatically terminate, and it will revert back to your landlord.

It is important to know that there are certain situations in which your interest could be terminated prior to the contracted date. If, for example, you breach one of the covenants in your lease (e.g. you have dogs in your apartment and the lease specifically says no animals are to be on the premises), your landlord could terminate the lease early. In fact, in most states in the U.S., a landlord may terminate your lease if you fail to pay your rent on time. As a tenant, you could also terminate the lease earlier than the fixed period of time you initially contracted for. Let’s say you get a new job, and you have to relocate prior to the termination date on your lease. You can surrender your lease, and if your landlord accepts, then your lease will terminate. In most situations, landlords will allow you to do this; however, the majority of landlords will require you to pay an early termination fee (and this should be spelled out in your lease agreement).

Next, let’s discuss periodic tenancies.

A periodic tenancy is a leasehold in which you as the tenant have an interest in the premises that continues from period to period until it is terminated by proper notice by either you or your landlord. For example, let’s say you’re unsure how long you’re going to be living in one place because your boss tells you that you’re going to be relocated, but he’s not sure when. Under these circumstances, you decide to enter into a lease by which you rent your apartment on a month-to-month basis. This is a periodic tenancy, where a "month" constitutes the period under which you rent.

A periodic tenancy can be created a number of different ways, but it is most typically done via a written lease agreement. If the period is less than one year, the lease does not actually have to be in writing. In fact, your landlord could simply tell you to pay him a certain sum on a monthly basis, and this in and of itself would create an implied periodic tenancy. Finally, a periodic tenancy could be created by operation of law. For example, let’s say that you sign a lease to rent an apartment for one year. At the end of your lease, instead of moving out, you pay another month’s rent to the landlord, and your landlord cashes the check. By doing this, you and your landlord have essentially created a periodic tenancy under which the period consists of a "month."

Until the tenant or the landlord gives proper notice to the other party, a periodic tenancy will be automatically renewed for successive periods. Proper notice usually consists of notice given one full period in advance, after which you must vacate the premises at the end of the following period. For example, under a month-to-month lease, you must give your landlord one month’s notice prior to terminating your periodic tenancy. If your landlord tells you on January 1st that your lease is being terminated, you have until the end of February to vacate the premises. The only exception to this, absent any other agreement between the parties, is when a "year" constitutes the period under which you rent. If you are renting year-to-year, then you or the landlord must give six months’ notice prior to ending the periodic tenancy.

Next, let’s take a look at tenancies at will.

A tenancy at will is a leasehold that can be terminated at any time by either the tenant or the landlord. Typically, this type of leasehold must be created with the express understanding that the lease can be terminated at the will of either party. If an express agreement does not exist, then a court of law may treat the leasehold as a periodic tenancy based on the frequency of the tenant’s payment of rent to the landlord.

Termination of a tenancy at will can be done without any notice by either the landlord or the tenant. For example, let’s say you expressly agree to rent an apartment from your landlord, with the understanding that it can be terminated at any time by either party. You pay your landlord on a month-to-month basis. Four months down the road, you land a new job in a new city, and you have only four days to move. You can pack your stuff into the moving truck and hand your landlord the keys, and your leasehold will be considered terminated. On the other hand, a tenancy at will can also be terminated by operation of law. For example, let’s say you are renting an apartment, and your landlord has a heart attack and dies. Death of one of the interested parties will likely terminate the leasehold.

Next, let’s take a look at tenancies at sufferance.

A tenancy at sufferance is a leasehold under which a tenant remains in possession of the premises after a tenancy has been terminated, and the tenant’s possession is wrongful. Let’s take a moment to separate this from a previous example we discussed. Earlier, when discussing periodic tenancies, we talked about a situation in which you agreed to sign a lease to rent an apartment for one year. At the end of your lease, instead of moving out, you paid another month’s rent to the landlord, and your landlord cashed the check. By doing this, you and your landlord had essentially created a periodic tenancy under which the period consisted of a "month." This type of situation must be distinguished from a tenancy at sufferance, which deals with tenants who remain in wrongful possession after termination of their lease. If, in the previous hypothetical, your landlord told you that at the end of your year-long lease (on July 31st) you had to vacate the premises, and on August 1st you were still there, you would have created a tenancy at sufferance.

A tenancy at sufferance is terminated once the landlord takes the appropriate measures to evict the tenant who remains in wrongful possession of the premises. Under these hostile circumstances, no type of notice is required to terminate a tenancy at sufferance.

Finally, let’s wrap this article up by reflecting on a few key points.

Over the course of this article, we looked at the different types of leaseholds created by different situations. We’ve explored the basics of tenancies for years, periodic tenancies, tenancies at will, and tenancies at sufferance. As a first time renter, it is important to understand the nature of your leasehold, and what the leasehold means for you and your landlord.