Chapter 1: General Landlord-Tenant Law
1.1Creation of a Tenancy1
A landlord-tenant relationship is created when the owner of an estate conveys to another a lesser interest in the property for a term less than the owner’s for valuable consideration. Grant v Detroit Ass’n of Women’s Clubs, 443 Mich 596, 605 (1993). In a landlord-tenant relationship, the lessee has “the use and enjoyment of the premises during the period stipulated.” Id.; Dep’t of Natural Resources v Bd of Trustees of Westminster Church of Detroit, 114 Mich App 99, 104 (1982). According to the Grant Court, the following elements must be present for a landlord-tenant relationship to exist:
“permission or consent on the part of the landlord to occupancy by the tenant, subordination of the landlord’s title and rights on the part of the tenant, a reversion in the landlord, the creation of an estate in the tenant, the transfer of possession and control of the premises to [the tenant], and . . . a contract, either express or implied, between the parties.” Grant, 443 Mich at 605 n 6.
See also Ann Arbor Tenants Union v Ann Arbor YMCA, 229 Mich App 431, 441-442 (1998).
Consideration may be satisfied by services as well as money. Grant, 443 Mich at 606; Munson v Menominee Co, 371 Mich 504, 512-513 (1963).
The conveyance must be consensual, and the relationship may be express or implied. See Grant, 443 Mich at 605-606. In fact, the existence of title to property in one person and possession of the property by another creates the presumption of a tenancy. Butler v Bertrand, 97 Mich 59, 64-65 (1893); Hogsett v Ellis, 17 Mich 351, 367 (1868). Michigan courts have recognized implied tenancies in such diverse situations as the letting of a summer cottage for a week, Heward v Borieo, 35 Mich App 362, 363 (1971), and caretaking for an athletic club, Grant, 443 Mich at 605-606.
A tenancy is different from a license. A license simply involves permission to do some act on the land of another. McCastle v Scanlon, 337 Mich 122, 133 (1953); United Coin Meter Co v Gibson, 109 Mich App 652, 655 (1981). A license gives permission for use without any permanent interest in land. Macke Laundry v Overgaard, 173 Mich App 250, 254 (1988); United Coin Meter Co, 109 Mich App at 655. Placing a sign on property, for example, is a form of license. Lewis v Baxter Laundries, 254 Mich 216, 217 (1931).
A common area of confusion is identifying the relationships of innkeeper-guest and landlord-tenant. Distinguishing the two is important for purposes of determining whether or not an owner possesses certain lien rights on the guest’s or tenant’s property. “[T]he traditional distinction[] . . . between a ‘guest’ and a ‘tenant’ [is] . . . the right of a tenant to exclusive legal possession and control and the right of a guest to mere use of the premises.” Ann Arbor Tenants Union, 229 Mich App at 447 (holding that residents in single room occupancy units at a YMCA were guests because the essential characteristics of a tenancy—most notably, exclusive possession and control—were not present), citing Poroznoff v Alberti, 161 NJ Super 414, 419-421 (1978).
To determine whether a person is a guest or a tenant requires a look at the totality of circumstances, including the description of the relationship used by the parties, the payment (weekly or monthly rather than daily), and the type of accommodations. Ann Arbor Tenants Union, 229 Mich App at 446-447, citing Layton v Seward Corp, 320 Mich 418 (1948). Also of importance is whether the occupant has another residence and is on the premises temporarily, or whether the occupant intends to reside on the premises for an indefinite time. See generally, Layton, 320 Mich at 421, 423-425 (the totality of circumstances involved whether the guest was a resident of the city in which the inn was located, whether there was a lease or term of tenancy established, the name of the place where the guest stayed, i.e., “hotel” as opposed to “apartments,” notice posted in the rooms referred to a hotel and guest relationship, the guest occupied a single room rather than a suite, and the innkeeper relied on the Innkeeper’s Act of Michigan in its defense).2 The nomenclature used to describe the relationship is not necessarily probative of the nature of the relationship and does not preclude the establishment of a tenancy. Grant, 443 Mich at 606, 608 (holding that “where the essential characteristics of a landlord-tenant relationship are present, an [agreement titled ‘Contract of Employment’] may create a tenancy”).
1.Tenancy for Years or for a Definite Term
A tenancy for years or for a definite term is “[a] tenancy whose duration is known in years, months, or days from the moment of its creation.” Black’s Law Dictionary (9th ed). If the period is for longer than one year, the lease must be in writing to comply with the statute of frauds. MCL 566.108.
“It is a general rule that where a tenant under a valid lease for years holds over, the law implies a contract to renew the tenancy on the same terms for another year. It is also the rule that a presumption arises from the holding over by the tenant and acceptance of rent by the landlord that the parties intend to renew the tenancy.” Kokalis v Whitehurst, 334 Mich 477, 480 (1952). “‘Where there is no express agreement for a renewal of an annual lease and the tenant remains in possession after the term has expired, the landlord may treat him [or her] as a trespasser or may acquiesce in his [or her] continuing in possession, and in the latter event the law presumes that the tenant holds for another year subject to the terms of the previous lease.’” Kokalis, 334 Mich at 481, quoting Rice v Atkinson, Deacon, Elliott Co, 215 Mich 371, 372 (1921) (alterations added).
A tenancy at will is for an indefinite period of time and continues until terminated by either party “upon the tender of sufficient notice.” Frenchtown Villa v Meadors, 117 Mich App 683, 689 (1982).
“The general rule is that a month-to-month tenancy is a tenancy at will[.]” Aspen Enterprises, Ltd v Bray, 148 Mich App 9, 14 (1985).
A tenancy by sufferance is “[a] tenancy arising when a person who has been in lawful possession of property wrongfully remains as a holdover after his or her interest has expired.” Black’s Law Dictionary (9th ed). A tenancy by sufferance need not originate from a landlord-tenant relationship. Felt v Methodist Educ Advance, 251 Mich 512, 517 (1930). “As a general rule, when a tenant comes rightfully into possession of land by permission of the owner and continues to occupy the same after the time for which, by such permission, he [or she] had the right to hold the same, he [or she] becomes a tenant by sufferance.” Id.
The following cases concluded that, under the facts of each case, a tenancy by sufferance was created:
•Harrington v Sheldon, 196 Mich 388, 391 (1917) (life tenant of property died, and the life tenant’s lessee became a tenant by sufferance of the owner of the reversion).
•Bennett v Robinson, 27 Mich 26 (1873) (property was sold and seller remained in possession without apparent right).
•Durda v Chembar Development Corp, 95 Mich App 706, 708, 714 (1980) (defendant-tenant failed to pay on land contract and remained in possession of property beyond the cure period).
B.New Owners Affecting an Existing Tenancy
Generally a tenancy is an estate in land and takes precedence over later interests arising during the existence of the tenancy. Plaza Investment Co v Abel, 8 Mich App 19, 24-25 (1967). Thus, if an owner leases his or her property and then sells it before the lease expires, the new owner is subject to the term remaining of the lease. Id. at 19, 23.
Compare Harrington, 196 Mich at 391, where the Court held that “the death of a life tenant terminates the lease of the premises existing between him [or her] and his [or her] lessee, and that the latter becomes a tenant by sufferance of the owner of the reversion.” See also Marks v Corliss’ Estate, 256 Mich 460, 462 (1932), where the Court stated, “Where the lease terminates by the substitution of a landlord not bound by the lease, the tenant continues in possession by sufferance[,]” citing Harrington, 196 Mich at 388. This principle has been applied by district courts to require a mortgagee who forecloses to treat tenants of the former mortgagor as tenants by sufferance with the right to a 30-day notice before eviction pursuant to MCL 554.134.3
C.Status of Caretakers and Other Employees Who Reside in Employer Housing
Rent may be paid in the form of services as well as money. Grant, 443 Mich at 606; Shaw v Hill, 79 Mich 86 (1889). In Grant, 443 Mich at 599, the plaintiff was granted the use and occupancy of an apartment pursuant to an employment contract in exchange for full-time caretaking services for a clubhouse. When he was fired and summarily locked out of his apartment without further notice, he brought an action in circuit court for injunctive relief under the anti-lockout statute, MCL 600.2918.4 Grant, 443 Mich at 600, 607-608. The Supreme Court held that an implied landlord-tenant relationship existed, entitling the plaintiff to bring an action for unlawful interference with his or her possessory rights as a tenant. Id. at 608. The Court stated:
“[T]he essential characteristics of a landlord-tenant relationship are present. [The p]laintiff agreed to provide his services as caretaker in exchange for use and occupancy of the apartment at [the] defendant’s clubhouse; [the] plaintiff’s consideration for the use and occupancy of the apartment was his labor; [the] defendant transferred possession and control of the premises to [the] plaintiff; [the] plaintiff occupied the apartment exclusive of [the] defendant; and the length of the tenancy was for an agreed-upon duration—the length of the employment relationship. That the agreement is labeled a “Contract of Employment,” as noted by the dissent, is not probative of the nature of the relationship between the parties.” Grant, 443 Mich at 606.
More simply stated, “[A] landlord-tenant legal relationship may be recognized pursuant to a contract of employment where use and occupancy of an apartment are the sole and full compensation for the services rendered.” Grant, 443 Mich at 599.
Grant requires courts to look at the individual facts of each resident- employee situation to determine whether a landlord-tenant relationship exists. See Grant, 443 Mich at 605-607. Although the Grant Court cited with favor two Michigan federal court decisions which identified landlord-tenant relationships in the migrant farmworker/labor camp context,5 the Court of Appeals denied certain migrant farmworkers living in a labor camp the status of tenants under MCL 554.601 because they were paid the same wage as workers who did not live in the camp, and the Court was unable to determine any consideration for the housing provided. DeBruyn Produce Co v Romero, 202 Mich App 92, 108-110 (1993).