Leaseholders — more commonly referred to as tenants — and occupants have rights and obligations under state and federal laws. A tenant, however, has signed a contract binding them to the lease while an occupant is merely a resident of the property with no predetermined contractual obligations. The existence of a lease dramatically increases a tenant's rights and entitles most tenants to certain legal protections, even if those protections are not written into the lease. A leaseholder or tenant is an occupant of a property. The critical difference is that he is an occupant who is also protected by his contract and by state laws governing tenants.
An occupant is under no obligation to give a landlord advance notice prior to moving, but a tenant must honor the moving provisions outlined in the lease agreement. If there is no lease, the notice a tenant must give is outlined in each state's laws. Most states require 30 to 60 days notice for a tenant to move out. It is also more difficult for a landlord to remove a tenant from a property than to remove an occupant. Tenants must be evicted or given notice in accordance with the terms of the lease. Occupants also have some protections when a landlord wants them to move. Most states require 15 to 30 days advance notice, but some states require as few as three days.
All rental properties must meet city and state housing code standards. Occupants, however, are unlikely to be able to get landlords to make any additional repairs. Landlords have not signed contracts agreeing to do so. Moreover, unlike tenants, an occupant has not performed a walk-through of the property. When tenants sign a lease, they are agreeing to accept the property as is. Anything that breaks after that point must be repaired.
Leaseholders may have more obligations than occupants. When no lease is signed, an occupant is only bound by relevant state laws. Tenants, however, may sign agreements agreeing not to paint the property, promising to avoid smoking, etc. As long as these agreements do not conflict with state law, they are enforceable. Many states allow a landlord to evict a tenant for breaches of the lease with as little as three day's notice.
A leaseholder, by definition, always pays to reside in a property. An occupant may not. For example, if a parent allows his adult child to live in his property without payment, he is an occupant rather than a tenant. However, not all occupants are non-paying. A roommate, for example, who is not on the lease but who pays his roommate some portion of the rent is considered an occupant. Some states have laws regarding squatters, occupants who live in a property without paying for it.