MAY v. SHARP (2025)

MEMORANDUM DECISION

[1] When Stefan May's one-year lease expired in October 2022, he remained in the rental property and continued paying the $600 monthly rent provided by the lease. His landlord, Brian Sharp, continued accepting these payments for over a year. In March 2024, May began complaining about water and mold in the basement. Two months later, Sharp gave May notice to vacate the rental property within thirty days. May vacated the property and then sued for breach of contract and retaliatory eviction, based on May's belief that his lease was automatically renewing for additional twelve-month tenancies. The dispositive issue is whether the lease signed by the parties automatically renewed for additional 12-month tenancies or created a month-to-month tenancy that Sharp could lawfully terminate with thirty-day notice. Because the lease unambiguously created a month-to-month tenancy, we affirm the trial court's judgment for Sharp.

Facts and Procedural History

[2] In October 2021, Stefan and Abigail May entered into a written lease agreement with Brian Sharp for a duplex in Michigan City, Indiana. The lease term ran from October 10, 2021, to October 9, 2022, with monthly rent of $600. The lease contained a “Holdover” provision that stated:

If Tenant maintains possession of the Premises for any period after the termination of this Lease (“Holdover Period”), Tenant shall pay to Landlord lease payment(s) during the Holdover Period at a rate equal to 150% of the most recent rate preceding the Holdover Period. Such holdover shall constitute a month-to-month extension of this Lease.

(Appellant's App. Vol. II at 16.) After the lease expired in October 2022, the Mays remained in the residence and continued paying $600 monthly rent. The parties did not sign a new lease agreement.

[3] In March 2024, May began texting Sharp about water accumulation and mold in the basement. Sharp responded by checking the sump pumps, re-grading the property, and arranging for a basement water mitigation company to inspect the property. The mitigation company provided a $12,000 estimate for remediation work, which Sharp contracted to have completed at the earliest opportunity, which was approximately two and a half months later. On May 6, 2024, Sharp sent the Mays notice of the termination of the lease, which informed the Mays that they needed to vacate the property by June 9, 2024. May and his family vacated the property in early June 2024.

[4] On June 3, 2024, May filed a small claims action against Sharp alleging retaliatory eviction in violation of Indiana Code chapter 32-31-8.5 and breach of contract. Sharp filed a denial and requested a bench trial. Following a bench trial on November 22, 2024, the court entered judgment in Sharp's favor.

Discussion and Decision

[5] When the trial court entered judgment in favor of Sharp, it included findings of fact and conclusions of law. As such, we review the trial court's decision for clear error. Olympus Properties, LLC v. Plotzker, 888 N.E.2d 334, 336 (Ind. Ct. App. 2008). We will affirm if the evidence supports the findings and the findings support the judgment. Samples v. Wilson, 12 N.E.3d 946, 950 (Ind. 2014). A lease is a contract and interpretation of the meaning of a contract is a question of law. Meridian North Investments LP v. Sondhi, 26 N.E.3d 1000, 1003 (Ind. Ct. App. 2015) (discussing commercial lease). We review questions of law de novo. Olympus Properties, LLC, 888 N.E.2d at 336.

[6] Regarding May's claim for breach of contract, May explained to the trial court: “My understanding of the law is that when a lease expires and a tenant continues to pay rent, that a lease is renewed underneath the same terms and conditions as the lease.” (Tr. Vol. II at 6.) The trial court concluded May had failed to establish that claim by a preponderance of the evidence after finding a “clear reading of the LEASE AGREEMENT provides that from and after October of 2022, MAY was a holdover month-to-month tenant[.].” (Appellant's App. Vol. II at 36.) We cannot say the trial court committed clear error in its finding and conclusion.

[7] The nature of a tenancy after the original contract period depends on the agreement contained in the original contract. See Fields v. Conforti, 868 N.E.2d 507, 515 (Ind. Ct. App. 2007) (rejecting argument that year-to-year lease had to renew for another year because the original lease “specifically provided that any holdover tenancy would be construed as a ‘month-to-month tenancy’ ”) (quoting appellate record). The lease signed by the parties herein explicitly provided – as quoted above – that a tenant who maintains possession after the termination of the lease is a holdover, which would constitute a month-to-month tenancy. (See Appellant's App. Vol. II at 16.) Moreover, by the very terms of the lease, it “terminate[d] on October 9, 2022.” (Id. at 15.) Thus, May was a holdover tenant with a month-to-month tenancy, which could be terminated with one-month notice. See Ind. Code § 32-31-1-4 (providing that, to terminate tenancy of repetitive term, landlord must give tenant notice equal to the term of the tenancy). Accordingly, Sharp did not commit breach of contract by giving May notice that his month-to-month tenancy was ending one month later.¹ See, e.g., Fields, 868 N.E.2d at 515 (“A month-to-month tenancy may be terminated ․ by the landlord giving a one-month notice to the tenant.”).

[8] Regarding May's claim for retaliatory eviction in violation of Indiana Code section 32-31-8.5-5, the trial court determined that May “failed to establish by a preponderance of the evidence” that Sharp committed a retaliatory act in violation of the statute. (Appellant's App. Vol. II at 36.) While the trial court ruled based on the evidence before it, May could not win as a matter of law because he was a month-to-month tenant. The statutory prohibition against retaliatory acts by a landlord does not prohibit a landlord from “[d]eclining to renew a rental agreement at the conclusion of the term of the rental agreement.” Ind. Code § 32-31-8.5-5(b)(1). Because May was a month-to-month tenant, Sharp could terminate the tenancy with proper notice without regard to May's complaints about the premises, and May cannot succeed in his claim for retaliatory eviction.

Conclusion

[9] The trial court correctly determined that May became a month-to-month holdover tenant following expiration of the initial lease term. Sharp's termination of this month-to-month tenancy with proper notice did not constitute breach of contract or retaliatory eviction. We affirm the trial court's judgment in favor of Sharp.

[10] Affirmed.

FOOTNOTES

1.   We also note that Sharp's decision not to enforce the 150% rent increase in the holdover provision does not impact the applicability of the month-to-month tenancy provision because the lease contained a waiver clause that provided: “The failure of either party to enforce any provision of this Lease shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Lease.” (Appellant's App. Vol. II at 18.)

May, Judge.

Weissmann, J., and Scheele, J., concur.