Crechale & Polles, Inc. v. Smith

Brief Fact Summary. Tenants of property remained after expiration of lease despite the landlord telling them to vacate. Once the landlord accepted a rent payment, tenants treated lease as a month-to-month lease, which landlord argued was actually a renewal of the full five-year term. Landlord sued to enforce a new five-year lease.

Synopsis of Rule of Law. Once the landlord accepts rent from a tenant at the end of the lease, he effectively agrees to a month-to-month extension of the lease.

Facts. The Plaintiff, Crechale & Polles, Inc. (Plaintiff), entered into a lease agreement with the Smiths, the Defendants (Defendants), for a term of five years and monthly rent of $1,250.00. At the end of the lease, the Defendants were informed that the new building they were planning on occupying would not be ready by the end of his current lease. The Defendants met with the Plaintiff to attempt to extend the lease. The Plaintiff alleges there was no agreement made. The Defendants allege that an oral agreement establishing a month-to-month lease was reached. The Plaintiff alleges that the Defendants are holdover tenants and thus held to another five-year lease. The lower court found for the Plaintiff and awarded $1750.00 in back rent and $760.00 in damages. The Plaintiff appealed the ruling.

Issue. Whether the Defendants are holdover tenants and bound to a new five-year lease or were effectively trespassers.

Held. Affirmed, the Defendants are not required to pay rent for a new term of the rent for the following reasons:
When a tenant continues in possession after the termination of his lease, the landlord can elect to evict the tenant, treat him as a trespasser or hold him as a tenant.
In this case, the Plaintiff sent a letter to the Defendants, which effectively treated them as trespassers. The Plaintiff cannot at a later date change his treatment of the Defendants to the status of a tenant.
When a landlord elects to treat a tenant as a trespasser, but accepts rent, he in effect agrees to an extension of the lease on a month-to-month basis.

Discussion. The court discussed whether the actions of the landlord created a month-to month lease, an eviction proceeding, or made the tenants hold over tenants. The court focused on the fact that the landlord accepted a rent payment from the tenants. Despite a written communication to the contrary, this created a month-to-month lease.