Chapter 29

The Legal Relationship Between Landlord and Tenant

Disclaimer regarding the Lease: Even though legal information appears in this chapter it is not intended to be legal advice as per that stated by an attorney. When dealing with a lease the tenant and the landlord are advised to seek legal advise from an attorney.

29.01  INTRODUCTION

A landlord and tenant relationship starts when the owner of real property conveys to the tenant the rights to use, enjoy, and possess that property.  In return for this transfer of rights, the tenant makes payments to the landlord in an agreed upon form that can include a specific amount of money, an exchange of property, services, or a percentage of the tenant’s sales.  If the contract does not specify the time for payment, the law will presume that the rent will be due at the end of the rental period.  Typical leases require payment in advance. Any contract for rental based upon some unlawful purpose or that is contrary to public policy is void.

29.02  USUFRUCTS

If the term of the rental agreement between the landlord and the tenant, known as a contract for rent, is for less than five years, the law presumes that no transfer of an estate takes place (O.C.G.A.  § 44‑7‑1). The landlord merely contracts to subordinate some of the landlord’s rights to the property during the existence of the relationship.  In Georgia the term “usufruct” describes the bundle of rights and privileges that a tenant holds that is less than the interest that passes when an estate for years is created (O.C.G.A. § 44‑7‑1).

29.03  ESTATE FOR YEARS

Although the term “lease” normally refers to contracts for rent, technically the term refers to the creation of an “estate for years.” An owner creates an estate for years when the owner carves an estate from his or her estate and grants it to someone else for a fixed period of time with the condition that it reverts to the owner when that time has expired.  (O.C.G.A.  § 44‑6‑100).  For example, a landowner contracts to give a tract of land to a private school for use as a playground for 99 years at a cost of one dollar ($1.00) a year.  After that time the land will return to the landowner’s control.  The owner has created an estate for years.  An estate for years differs from a usufruct in that a tenant holding a usufruct receives only a limited right to use and enjoy the property, whereas the recipient of an estate for years possesses an estate in that property and has the rights and powers of ownership for a limited time.  (O.C.G.A. § 44‑6‑102).  These differences, unless otherwise specified in the rental agreement itself, affect who is responsible to pay real property taxes and the rights to assign or sublet the property, to pledge the property as security for a debt, to obtain title insurance on the property, and to force the sale of the tenant’s interest in the property to satisfy a judgment in a lawsuit.

Although a lease for a period of five years or more is presumed to create an estate for years, it may in fact be a simple rental agreement or usufruct; and the parties can specify their intentions in that respect in the agreement.  (O.C.G.A. § 44‑7‑1).

29.04  TENANCY FOR A DEFINITE TERM

Rental agreements most often are specific as to the period of their duration.  Generally these are “tenancies for a definite term.” If the time period specified is one year or less, the agreement can be oral and will still be binding on the parties.  However, if the period is for more than one year, it must be in writing.   (O.C.G.A.  § 44‑7‑2).

29.05  TENANCY FROM YEAR TO YEAR

A tenancy from year to year is the most common form of residential rental arrangements.  A landlord and tenant produce a written agreement creating a tenancy for one year with an option to renew for each succeeding year.  Unless the agreement states otherwise, the arrangement does not automatically renew the contract at the end of a year’s time but requires the parties to reaffirm their intention to continue the arrangement and allows for the renegotiation of the terms.  If, however, the parties do not reach an agreement at the end of the specified time, the tenant becomes either a tenant at will or a tenant at sufferance.

29.06  TENANCY AT WILL

If the parties do not specify the time for the termination of a tenancy, they create a “tenancy at will.” (O.C.G.A. §  44‑7‑6).  A landlord and tenant can create a tenancy at will by express contract, by implication, or by operation of law.  For example, Mr. A orally agrees to rent an apartment to Mr. B for two years.  As Georgia law requires that rental agreements for more than one year must be in writing, this verbal agreement is invalid and a tenancy at will would result.  In Georgia a landlord must give a tenant sixty days notice before terminating a tenancy at will, and a tenant must give the landlord thirty days notice before termination of the tenancy.  (O.C.G.A. §  44‑7‑7).  As a tenancy at will requires the implied or express consent of the landlord, a dispute over the term of the tenancy will not ordinarily create a tenancy at will.  Instead, a tenancy at sufferance will result.

29.07  TENANCY AT SUFFERANCE

A tenancy at sufferance results when a tenant comes into possession of real property lawfully and retains possession after the lawful right to possess has ended.  In this way the rightful possession of property has become wrongful.  Unlike a tenancy at will, the law does not require sixty days notice of termination to the tenant.  For example, Mr. A rents an apartment to Mr. B for one year, and both parties sign a contract to that effect.  At the end of one year’s time, Mr. A asks Mr. B to vacate the property, but Mr. B refuses to leave.  Mr. B has become a tenant at sufferance, and Mr. A is not required to provide additional notice in order for him to have Mr. B removed from the property. A tenant at sufferance is also known as a holdover tenant.

29.08  LEGAL TERMINATION OF LEASES

The parties can legally end leases in several ways as the following discussion illustrates.

(a) EXPIRATION OF THE TERM OF THE LEASE – The most usual way for a lease to end is by the expiration of the mutually agreed upon period of tenancy.  At that time, the tenant surrenders possession and use of the property to the landlord, and the landlord regains the leasehold estate and, consequently, all the rights of ownership in the property.

(b) MUTUAL AGREEMENT TO TERMINATE – The lease may end before its expiration date if the landlord and tenant agree to its termination.  For example, the tenant may hold a lease on the property for a definite period of time and may find during the term of the lease that it would be beneficial not to remain in the property for the full lease term.  In this event, the tenant approaches the landlord and asks to be relieved of the responsibilities and obligations specified in the lease. If the landlord grants the request, he or she will regain possession of the leasehold; and the lease will terminate.

This process of mutual agreement is also known as surrender and acceptance.  The tenant offers to surrender the property to the landlord, and the landlord accepts the property.  The terms of the lease end.

The process of surrender is different from abandonment since a lease does not automatically end when the tenant walks away or abandons the leasehold estate.  In that case, the tenant is still legally liable for the unpaid portion of the rent through the expiration date of the lease.

(c) MERGER OF THE FREEHOLD AND LEASEHOLD ESTATES – A lease can terminate if the tenant purchases the property.  In this case, the owner of the leasehold estate becomes the owner of the freehold estate, thereby canceling the lease.

29.09  BREACH OF COVENANTS

A breach of the conditions of the lease by either party can bring about its termination.

(a) BY THE TENANT – DISPOSSESSION PROCEEDINGS – If the tenant retains the possession of the rented premises beyond the agreed upon time, fails to pay the rent when due, or otherwise breaches the contract or if the tenant holds the property at will or sufferance, the landlord may demand return of the property.  Should the tenant refuse to relinquish possession of the property, the landlord or the landlord’s agent may institute an action for “dispossession”, the eviction of the tenant in a Superior Court, State Court, or any other court with jurisdiction over the matter in the county where the property is located.  (O.C.G.A.  § 44‑7‑50)

When a tenant breaches the conditions of the lease, the landlord has several alternatives.  First, if the breach is nonpayment of the rent and the tenant has left the property, the landlord can sue for the rent that is in default.  The landlord files the suit in the county where the tenant currently lives.  This increases the landlord’s difficulty especially if the tenant moves to another part of the state, or leaves the state.  If the landlord obtains a judgment against the tenant, he or she can file a garnishment against the tenant’s bank account and/or earnings and can file a lien against any property held by the tenant  free and clear of debt.

If the breach of contract involves nonpayment of rent and the tenant retains possession of the property,  the landlord can undertake a legal action known as summary proceedings or  dispossessory proceedings.  The landlord petitions the appropriate court in the county where the property is located to regain possession of the property.  The landlord files a statement that describes the tenancy and sets forth the breach of contract that occurred.  The court evaluates the petition, gives the tenant an opportunity to respond, and then decides the case.  If the tenant fails to respond or if the court rules against the tenant, the court issues an order to the tenant to vacate the property.  If the tenant does not peaceably leave the property after the court order, a local public official (a sheriff or a marshal) may forcibly remove the tenant.

(b) BY THE LANDLORD – CONSTRUCTIVE EVICTION – A landlord may breach the contract by depriving the tenant of use or possession of the entire leased property or a substantial portion of that property by either a positive act or a default.  This action or default, which must be intentional and permanent, is constructive eviction by the landlord.  It occurs when the landlord’s direct action or  failure to act when there is a duty to act restricts the tenant’s use of the property.  Examples of constructive eviction are demolition of a stairway or access point to the leased property, failure to repair an elevator that serves the leased property, failure to repair and maintain the property in conformity with housing codes and the warranty of implied habitability, failure to provide heat on cold days, allowing the property to be infested with vermin, and not repairing clogged sewage pipes that cause noxious odors and can be a health hazard.