Business ElementaryLeasehold Estates on the NJ Exam: Tenancy for Years, Periodic, at Will and at Sufferance
The short answer: The exam's four leasehold estates are the estate (tenancy) for years, which has a fixed end date; the periodic tenancy, which renews period to period until someone gives notice; the tenancy at will, which has no set term and can be ended by either side; and the tenancy at sufferance, where a tenant who came in lawfully stays after the right to possession ends, without the landlord's consent. Most questions ask how each one is created and how it ends. In New Jersey there is one big real-world twist: most residential tenants can be removed only for a listed good cause, whatever the textbook label (N.J.S.A. 2A:18-61.3).
For freehold estates (fee simple, life estates) and co-ownership, start with property ownership on the NJ exam.
Where do leases show up on the PSI outline?
PSI's outline doesn't use the phrase "leasehold estates," but leases appear in three salesperson areas (PSI bulletin):
- Property Ownership (10%): potential encumbrances on title, "such as probate, leases, or adverse possession"
- Contracts (19%): "Leases and rental agreements," "Lease-purchase agreements" and "Types of leases"
- Property Management (3%): "Landlord and tenant rights and obligations"
Lease payment structures (gross, net, percentage) are a different question type. See gross vs net leases.
What is a leasehold estate?
A freehold estate is ownership for an indefinite time. A leasehold (nonfreehold) estate is the tenant's right to possess the property for a time under the landlord's ownership. In textbook terms, the tenant (lessee) holds the leasehold, and the landlord (lessor) keeps the leased fee plus the right to get possession back at the end (the reversion).
How do the four leasehold estates compare?
The rows below follow standard textbook definitions, which is how national exam items are written. The NJ section afterward explains where state law changes the outcome.
| Estate | How it's created | How it ends (textbook) | Notice needed? | Ends at a party's death? |
|---|---|---|---|---|
| Estate (tenancy) for years | Lease with a definite start and end date, of any length, even a few months | Automatically on the end date | No | No |
| Periodic tenancy (week to week, month to month, year to year) | Lease that renews for successive periods, or rent accepted period by period | When either party gives proper notice | Yes | No |
| Tenancy at will | Possession with the owner's consent and no fixed term | When either party ends it | Usually | Yes |
| Tenancy at sufferance | Tenant stays after the right to possession ends, without consent | Landlord recovers possession, or consents and a new tenancy forms | Depends on state law | — |
Memory hooks: years = calendar (a fixed end date, even if it's six months); periodic = auto-renew; will = anyone can walk away; sufferance = overstayed.
How does New Jersey law change the real-world answer?
Textbook rules say an estate for years ends "automatically." For most residential rentals in New Jersey, that isn't the whole story:
- Good cause. For premises covered by the Anti-Eviction Act, a landlord "may not evict or fail to renew any lease … except for good cause" (N.J.S.A. 2A:18-61.3(a)). Owner-occupied buildings with no more than two rental units, and transient or seasonal hotel and guest-house guests, are outside the Act (N.J.S.A. 2A:18-61.1).
- New owners. A buyer of a covered building generally can't remove a protected tenant except for good cause (2A:18-61.3(b)). More: the Anti-Eviction Act for leasing agents.
- Notice periods for premises the Act doesn't cover. Before a court enters judgment for possession in these holdover cases, the tenancy must have been ended with 3 months' notice for a tenancy at will or from year to year, 1 month's notice for month to month, and one term's notice for other terms (N.J.S.A. 2A:18-56).
- Holdover after the tenant's own notice. A tenant who gives notice to quit on a date and then doesn't leave owes double rent for as long as they stay (N.J.S.A. 2A:42-5).
On exam day, answer a general leasehold question with the textbook definition. Answer a question that names New Jersey or the Anti-Eviction Act with the state rule.
How do you spot the right estate in a question?
- Is there a definite end date? Then it's an estate for years.
- Does it roll over by itself? Then it's periodic.
- No term, and both parties can end it? Tenancy at will.
- Is the tenant still there after the lease ended, without permission? Tenancy at sufferance.
Try these: A six-month summer lease from June 1 to November 30. Estate for years, because length doesn't matter, a fixed end does. A tenant pays monthly with no written end date, and the landlord accepts. Periodic (month to month). A lease ends, and the tenant stays without the landlord's consent. Tenancy at sufferance.
Look-alike traps like these are collected in confusing terms on the NJ exam. Leasing duties are covered in property management on the NJ exam. For timed drills, use NJ practice exams.
Leases and landlord-tenant law are part of NJ pre-licensing. Business Elementary's 75-hour pre-licensing course covers them.
Sources
- PSI New Jersey Candidate Information Bulletin, content outlines: https://test-takers.psiexams.com/api/content/bulletin/1667
- N.J.S.A. 2A:18-61.1 (Anti-Eviction Act; covered premises and good cause): https://law.justia.com/codes/new-jersey/title-2a/section-2a-18-61-1/
- N.J.S.A. 2A:18-61.3 (no eviction or nonrenewal except for good cause; successor owners): https://law.justia.com/codes/new-jersey/title-2a/section-2a-18-61-3/
- N.J.S.A. 2A:18-56 (notice to quit before judgment for possession): https://law.justia.com/codes/new-jersey/title-2a/section-2a-18-56/
- N.J.S.A. 2A:42-5 (double rent after tenant's notice): https://law.justia.com/codes/new-jersey/title-2a/section-2a-42-5/
Last reviewed: November 8, 2026