Lease – Term

Lease – Term

Art. 2678. Term. The lease shall be for a term. Its duration may be agreed to by the parties or supplied by law. The term may be fixed or indeterminate. It is fixed when the parties agree that the lease will terminate at a designated date or upon the occurrence of a designated event. It is indeterminate in all other cases.

Art. 2679. Limits of contractual freedom in fixing the term. The duration of a term may not exceed ninety-nine years. If the lease provides for a longer term or contains an option to extend the term to more than ninety-nine years, the term shall be reduced to ninety-nine years. If the term’s duration depends solely on the will of the lessor or the lessee and the parties have not agreed on a maximum duration, the duration is determined in accordance with the following Article.

Revision Comment- 2004: This article imposes a quantitative limit on an otherwise unrestricted power of the parties to fix in advance the duration of the term of a lease. This limitation is dictated by public policy considerations. A lease for a duration of longer than ninety-nine years differs little from a perpetual lease. It binds the parties and their successors for a period much longer than most people are able to envision and thereby imposes upon them the risk of changing circumstances that they cannot anticipate. Such a lease also binds the property for too long a period and thus keeps it out of commerce for most practical purposes.

Art. 2680. Duration supplied by law; legal term. If the parties have not agreed on the duration of the term, the duration is established in accordance with the following rules:

(1) An agricultural lease shall be from year to year.

(2) Any other lease of an immovable, or a lease of a movable to be used as a residence, shall be from month to month.

(3) A lease of other movables shall be from day to day, unless the rent was fixed by longer or shorter periods, in which case the term shall be one such period, not to exceed one month.