What is a tenancy at will?
A tenancy at will is a temporary right for a tenant to possess land or property with the consent of the landlord for an indefinite period of time. The tenancy at will can be terminated by either the tenant or the landlord at any time. In this article, we will look at the key characteristics of a tenancy at will and when it may be used.
- The tenancy at will may be expressly agreed by the tenant and landlord or implied by the intentions of the parties.
- The agreement may be terminated by either the landlord or the tenant at any time.
- The tenant will not benefit from security of tenure once the agreement has come to an end, unlike with a lease. Therefore, if the property or land is sold, the tenant must vacate.
- The landlord must be careful not to demand rent in specific periods as this may create a periodic tenancy. The agreement must also not have a specified end date as the tenancy at will is flexible by nature.
- The agreement cannot be transferred (assigned) to a third party as it is a personal relationship between landlord and tenant. If the landlord wanted to do this, the agreement would terminate.
- A tenancy at will is usually used when one lease or licence ends and another’s terms are being negotiated. Therefore, a tenancy at will works on a temporary basis and so is usually drafted more quickly than a lease or licence.
- Unlike a lease and a licence, the rights granted over the land with a tenancy at will are limited. The tenant has an interest in the land or property and a right to occupy it.
- A tenancy at will is exempt from Stamp Duty Land Tax.
When to use a tenancy at will
The most common use of a tenancy at will is to allow a tenant to occupy the property whilst the finer details of a lease are being negotiated. This allows the tenant to use or continue to use the property or land almost immediately. As stated by Lord Justice Scarman in Heslop v Burns , a tenancy at will “can only serve one legal purpose, and that is to protect the interests of an occupier during a period of transaction”. The tenancy at will allows time for renegotiation of the terms of a new tenancy or allows the tenant early access to the property (however, this is less common).
Unlike a licence, the tenant will have the right to occupy the land rather than merely use it, allowing the tenant to have more rights over the land than they would do, by using a licence. The combination of flexibility with defined rights makes a tenancy at will a preferable option for these situations.
However, the tenancy at will is based on the good faith between the landlord and tenant as either may end the agreement at any time. This may force the tenant to leave immediately as there is no security of tenure as there is with a lease. The parties are reliant on each other to continue the agreement until a more substantial lease or licence may be agreed.
It must be emphasised that a tenancy at will may be used as a temporary measure rather than a permanent fix. If the agreement extends on for too long, the agreement may become a periodic tenancy, meaning that the tenant may have stronger grounds to occupation. It is also important that the drafting of the tenancy at will is carried out carefully as including an end date or very specific clauses may create a lease, which comes with many more obligations for both parties.