B. The Leasehold Estate

• Library: Practical Guide to Commercial Real Estate in South Carolina (SCBar) (2012 Ed.)

B. The Leasehold Estate

1. Types of Tenancies/Leases

There are three general categories of tenancies in South Carolina law: (1) Tenancies for Years and Tenancies for Terms; (2) Period Tenancies; and (3) Tenancies at Will.

a. Tenancies for Years and Tenancies for Terms

A tenant for years is a person using or occupying real estate, other than the owner, for a term of more than one year.² On the other hand, a tenant for a term is a person using or occupying real estate, other than the owner, under a written or oral agreement.³ Therefore, where a written or oral tenancy agreement exists between two parties and provides that the tenancy must expire on a date certain, there is a tenancy for a term. South Carolina law provides that a tenancy for a term of one year or a shorter period of time may be created by an oral agreement.⁴ However, any agreement for tenancy for more than one year is void if not in writing under both a specific statutory provision⁵ and the South Carolina Statute of Frauds.⁶

A key characteristic of a tenancy for term is that it ends without notice on the last day of the term and no additional notice of the termination date is required by the tenant or the landlord.⁷ Under the South Carolina Landlord Tenant Act of 1946, a tenant for a term who holds over after the expiration of the term becomes a tenant at will and the landlord has the option of treating the tenant as either wrongfully or rightfully retaining possession.⁸

b. Periodic Tenancies

A periodic tenancy is one which will last for a certain period of time and will automatically continue for subsequent successive periods of the same length of time.⁹ A typical example of a periodic tenancy is a month to month lease. In South Carolina, a month to month lease may be terminated by either party to the agreement upon thirty days written notice.¹⁰

South Carolina statutes dictate that all tenancies, other than those involving agricultural lands, are deemed month to month tenancies unless there is an agreement otherwise.¹¹

c. Tenancies at Will

A tenancy at will encompasses every person occupying or using real estate, other than the owner, without any oral or written agreement.¹² Two key characteristics of a tenancy at will are: (1) uncertainty as to the length of the term; and (2) that either party may terminate the lease with proper notice.¹³ A tenancy at will is terminable by any act of ownership on the part of the landlord that is inconsistent with the nature of the estate, such as a conveyance or lease by the landlord, where there is notice or knowledge on the part of the at-will tenant.¹⁴Additionally, once given twenty days notice, a tenant at will is required to vacate the property.¹⁵

A tenancy at will can be created when a person occupies property without the owner's permission and the owner waives the tort. By waiving the tort of trespass, the owner becomes entitled to receive a reasonable rental fee from the tenant at will.¹⁶ A tenancy at will can also be created when, following the termination of a lease, a tenant continues to occupy the premises absent a new agreement, thereby constituting a tenant at will.¹⁷

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