trusts & leasehold estates Flashcards
four main types of leasehold estates
Term of Years , Periodic Tenancy , Tenancy at Will
Tenancy at Sufferance
Term of Years
A lease for a fixed period (e.g., one month, one year, or 99 years).
The lease automatically ends when the term expires; no notice is required to terminate.
A 5-year lease ends exactly 5 years after it begins.
Term of Years
Periodic Tenancy
A lease that renews automatically for successive periods (e.g., month-to-month or year-to-year) until either the landlord or tenant gives notice to terminate.
Flexibility: No long-term commitment; common in residential rentals.
Termination: Requires proper notice from either party, aligned with the end of the current period.
Rent Payment: Typically paid at the start of each period.
Year-to-year tenancy: Typically requires 6 months’ notice to terminate.
Month-to-month tenancy: Usually requires 30 days’ notice.
Periodic Tenancy
Tenancy at Will
A lease with no fixed duration; lasts as long as both the landlord and tenant agree.
Termination: Either party can terminate at any time with proper notice (usually 30 days).
Creation Tenancy at Will
Express Agreement: Verbal or written agreement (e.g., “You can stay as long as you want, but either of us can end it with 30 days’ notice”).
Implied Agreement: If a tenant stays after a lease ends and the landlord accepts rent without creating a new lease.
Ending: Tenancy ends if either the landlord or tenant dies.
Tenancy at Sufferance
Occurs when a tenant remains in possession of the property after the lease has ended without the landlord’s permission (a “holdover” tenant).
Landlord’s Options: Tenancy at Sufferance
Evict the tenant.
Accept rent and create a new tenancy (usually a periodic tenancy).
Penalties: Some states allow landlords to charge double rent for holdover tenants.
If a tenant leases a property for one year and moves out without notice at the end of the term, the landlord has no further rights unless the lease specifies otherwise.
Term of Years
A month-to-month tenant who gives notice on November 16 to vacate by November 30 may still owe rent for December if the landlord cannot re-rent the property immediately.
Periodic Tenancy
If a lease allows the tenant to terminate at any time, it may be considered a tenancy at will, terminable by either party.
Tenancy at Will
A tenant who stays after the lease ends may be liable for double rent or eviction.
Tenancy at Sufferance
Requires notice to end; notice period aligns with the rental period (e.g., 30 days for month-to-month).
Periodic Tenancy
If the landlord does not accept rent payments….
no new tenancy is created
a settlor
creator of the trust
Legal Title: Held by
the trustee
trustee, who has authority to..
manage, sell, or reinvest the assets.
Equitable Title Held by the
beneficiaries
the beneficiaries, who have the right to
benefit from the trust property (e.g., income or principal).
Duties of the Trustee
trustee is a fiduciary and owes strict duties to the beneficiaries:
solely in the beneficiaries’ best interests
Spendthrift Trusts
A trust designed to protect beneficiaries from their own imprudence or creditors.
Until it is in the hands fully of the beneficiary then the creditors cant touch it
Beneficiaries cannot
transfer or borrow against their equitable interests.
Creditors cannot
reach the trust assets to satisfy the beneficiaries’ debts.
grantor of a trust
retains some control over the property in a trust.
A settlor cannot
create a trust to avoid creditors.
restrictions on beneficiaries inability to alienate income is not
against public policy
