Entry and occupation under an invalid oral lease creates a tenancy which is either from year to year, from month to month, or strictly at will, depending on the circumstances of the case. Perhaps the leading indicator of a year-to-year tenancy where the nature and duration of the tenancy is left undetermined by the lease agreement is an agreement to pay annual rent.
The parties negotiated a lease agreement. The tenants were experienced dairy farmers. The parties eventually agreed that the tenants would lease the farm for three years for an annual rate of rent that was to be paid in equal monthly installments. The landlords drew up a lease incorporating certain rental terms. The tenants objected to some provisions of the lease agreement and refused to sign it. From the outset of their tenancy, the tenants experienced problems. Some of their cows died. The tenants vacated the farm without giving the landlords prior notice. When the landlords filed a case for nonpayment of rent, the court found that a year-to-year tenancy was created and adjudged the tenants liable for one year's rent.
Should the tenants be charged for the unpaid rent?
In affirming the decision, the court found that the agreement to pay annual rent, the payments made pursuant to that agreement, and the character of the lease agreement converted the estate to a year-to-year tenancy. Both parties had to provide six-month notice prior to termination. Absent such notice, the tenants remained liable for the annual rent. Since the cause of the damages suffered by the tenants was not established, the tenants' counterclaim had to fail. An agreement to lease property for more than one year had to be signed by the party to be charged or his agent pursuant to Vt. Stat. Ann. tit. 12, § 181(5).