Differences in Minnesota Tenancies

What are the types of landlord-tenant relationships in Minnesota?

Minnesota law defines various private tenancies between Minnesota landlords and tenants. This article provides some of the basic distinguishing factors for the major types of tenancies, and the benefits or limitations that each may hold.

Fixed Term

Otherwise known as a “term lease” or a “tenancy for years,” a fixed term tenancy is a lease that is for a set period of time. Most often this period of time is a single year, although it can be for any duration and is not required to be in yearly increments. Generally speaking, the terms of the lease cannot be changed during the term without the consent of both the landlord and tenant. Usually, the landlord and tenant cannot terminate the lease early either, unless both sides agree.

Fixed term leases are the most common leases for residential leases, particularly in multi-family properties and apartment buildings. These term leases can provide stability for both the landlord and tenant, and help landlords reduce tenant turnover. Fixed term leases are often converted to month-to-month leases after the initial term has completed, something that will be discussed at greater length in the next section.

Month-to-Month or Periodic Tenancies

A periodic tenancy, in many cases referred to as a “month-to-month” lease, is another common tenancy in Minnesota. This type of lease is made up of a series of rental periods with no defined end point. This lease period will renew endlessly until either the landlord or tenant terminates the tenancy. In order to terminate a periodic tenancy, Minnesota law provides that either the landlord or tenant must provide notice “at least as long as the interval between the time rent is due or three months, whichever is less.” This means that in the case of a month-to-month lease, the landlord or tenant must provide notice ending the tenancy at least an entire month prior to the end of the period.

Many periodic tenancies occur after an initial fixed term lease. Minnesota law provides that after a term lease expires, if neither party takes any action to renew the term or terminate, the parties’ continuation of the tenancy becomes a month-to-month tenancy. Periodic tenancies give landlords and tenants a much greater degree of flexibility, but do not provide the same stability as fixed term leases. The parties do enjoy the flexibility to terminate the lease, typically on short notice, and also may be able to change the terms of the agreement on an expedited basis as well.

Tenancy at Will

Generally speaking, a tenancy at will is very similar to a periodic tenancy. However, a tenancy at will does not have a definite period or term, and is often created when a tenant remains on a property after termination or expiration of a lease and continues to pay rent. Many tenancies based on domestic relationships end up creating tenancies at will, including parents renting property indefinitely to their children. Tenancies at will can be terminated in the same manner as periodic tenancies, and landlords or tenants must provide adequate notice in order for the lease to property end.

Tenancy at Sufferance

A tenancy at sufferance is a difficult legal position that is characterized by a tenant holding over on property after termination of a lease, where the landlord does not accept rent. This sort of tenancy is not one that is agreed upon by the landlord and tenant, and usually results in the landlord bringing an eviction action against the tenant.

Sublease/Assignment

A sublease or assignment occurs when a tenant conveys their interest in the property to another tenant. While many landlords and tenants conflate these two terms, subleases and assignments do hold some notable differences. Specifically, a sublease occurs when a tenant transfers their interest in the property for an amount of time less than the entire term of the lease. For instance, a tenant could sublease their apartment space to another person for nine months of a twelve month lease term, and then move back in for the final three months.

On the other hand, an assignment occurs where a tenant transfers their lease interest for the full remaining portion of the lease. This means that if there are twelve months left on a lease, the original tenant would transfer the entire twelve months to the new tenant.

Because of the time and effort landlords generally put into screening tenants initially, many are reluctant to allow a tenant to sublease to a new person who has not been screened. Also, there is often little benefit to the landlord in allowing a tenant to sublease or assign their interest in the lease to another party. As a result, many landlords include lease language that limits subletting and assignment or prohibits them altogether.

The types of tenancies described in this article are among the most common in Minnesota. However, there are additional types of tenancies and many nuances to each. If you have questions about establishing a tenancy or need assistance forming or dissolving a landlord-tenant relationship, call the experienced lease attorneys at RAM Law PLLC for a free consultation. Our attorneys can be reached by phone at 651-468-2103 or through our convenient online contact form.