The term Estate at Will can be confusing to many preparing to take a real estate exam. But, interestingly, it has nothing to do with inheritance (as many suspect) when first hearing the term.
In real estate, an estate at will is essentially a type of lease agreement that is also called a lease at will. What sets an estate at will apart from other lease agreements is that it does not have a defined duration, meaning that it doesn’t have an ending date.
This time of lease arrangement will continue indefinitely until either the lessor or lessee choose to end the agreement.
Let’s take a look at an example.
Jessica owns her two-bedroom apartment in San Francisco, but she’s looking to increase her savings so that she can buy an investment property. Jessica knows that the spare room would earn a good income because of how high rental rates are in San Francisco. Her friend, Kristen, is looking for a room to rent and agrees to rent Jessica's guest bedroom. Because they are friends, they don't draw up an official lease agreement and agree that Kristen will pay a set monthly amount for rent and utilities.
Kristen, the now tenant, is allowed to stay in the room at her own will, while Jessica, now the landlord, allows Kristen to stay under their agreed terms.
When you start working in the real estate industry, it's important to remember that each state and, in fact, each city can have its own tenancy rules and regulations. Not all states will acknowledge an estate at will.
You also need to know that even though an estate at will is not a formal agreement, there are still some laws in place to protect both the tenant and landlord.
Tenants are entitled to a safe and habitable living environment and should not be subject to a landlord inspection with less than 24 hours’ notice, except for in the case of a fire emergency. If the tenant is to be evicted, the landlord or their agent will have to give ample notice and comply with their state’s proper eviction process.
In exchange for living in the landlord’s property, the tenant is obligated to pay the agreed regular rent payments. During the lease period, the tenant is also required to maintain the property and return it to the landlord in the same condition in which they leased it, except for general wear and tear.
Damage to the property either directly or through negligence is the tenant's financial obligation. If the tenant causes damage, the landlord can either withhold the deposit or request that the tenant completes the necessary repair.
Additionally, suppose the tenant is found to be engaging in criminal activities or has become a nuisance as stated by state housing laws. In that case, the tenancy can be terminated by the landlord.
In most cases, an estate at will is not the best lease arrangement, however, it can be useful in short-term agreements. A formal lease contract will always provide better security for both the lessor and lessee.
While this information gives you the basic overview of an estate at will, which you need for your real estate exam, you must also understand your state's laws to understand any additional or deviant rules that must be followed.
If you want to see some examples of questions that will be on the actual real estate exam, check out our free real estate practice exam. We have been named as the best real estate exam practice for 7 years in a row!
If you need to get your required educational hours done, check out our partners for online real estate education that can be done at your own pace from home or where ever you have internet access.
7 Tips For Generating Real Estate LeadsDon’t like ads? Remove them by enrolling!Finding real estate leads is often challenging. However, if you’re willing to try different marketing tactics, you can…
5 Steps For Agents To Reach Their Real Estate GoalsDon’t like ads? Remove them by enrolling!Real estate is a field that’s always busy and thriving. There are slower seasons, but you’ll have your…
The CE Shop Review: A Definitive GuideTake Advantage Of The Current Discount From The CE Shop. Click The Banner Below Right Now! Don’t like ads? Remove them by enrolling!Quick Look…
6 Convincing Reasons to Start a Career in Real EstateDon’t like ads? Remove them by enrolling!In the twenty-first century, most individuals ponder why they still need to work with real estate brokers. Isn’t…
What Does Abstract Title Mean In Real Estate?Don’t like ads? Remove them by enrolling!What Does An Abstract Title Mean In Real Estate? In real estate, there’s no such thing as a…
How To Get a Real Estate License in Rhode IslandDon’t like ads? Remove them by enrolling!How to Get a Real Estate License in Rhode Island Earning your real estate license in Rhode Island…
Share This Article