Prescott v. Smits

Brief Fact Summary.

The Smits appealed a lower court judgment claiming that a year-to-year tenancy is only created when there is continuous possession of property over a period of years.

Synopsis of Rule of Law.

A tenancy at will transfers into a year-to-year tenancy if a tenant agrees and actually pays rent on an annual basis.

Facts.

The Smits leased a farm from the Prescotts that they agreed would last for three years. Six months later, the Smits left the farm and stopped paying rent and the Prescotts sued for rent nonpayment. Because the lease was oral and leases longer than a year are required to be in writing, the oral lease created a tenancy at will. A dispute arose regarding whether a year-to-year tenancy was created, requiring the Smits to pay rent for a full year. The lower courts granted judgment in favor of the Prescotts and the Smits appealed.

Issue.

Whether a tenancy at will transfers into a year-to-year tenancy if a tenant agrees and actually pays rent on an annual basis?

Held.

Yes. The judgment of the lower court is affirmed. A year-to-year tenancy was establish because the Smits agreed to pay rent on an annual basis and acted in accordance with that agreement prior to vacating the premises.

Discussion.

Continuous possession is not required to transfer a tenancy at will into a year-to-year tenancy. A tenant must agree to pay rent on an annual basis and act in accordance with that agreement to create a year-to-year tenancy.