Term
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Definition
| Exclusive right to enjoy the possession and use of a parcel of land or other asset for an indefinite period |
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Term
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Definition
includes leases, an estate that exists for a limited period of time and does not impart title to the grantee |
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Term
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Definition
a document that an owner of land and a tenant execute to create a leasehold in the tenant |
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Term
| Are Modern leases both conveyances and contracts? |
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Definition
Yes
Conveyance-convey a leasehold estate
Conveyance relationship is governed by contract terms |
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Term
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Definition
the act of creating a leasehold, verbally or in writing |
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Term
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Definition
an estate in land with a present possessory interest and a reversionary interest
§ In most leases, the LL retains a right of entry for breach
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Term
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Definition
Common law, property law-no warranties implied in a lease
Modern contract law- Implies various warranties or guarentees into contracts to give mutual protection to the parties, even if not spedifically sought |
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Term
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Definition
Property-Covenants are independent and the nonperformance of one party does not excuse the other party from performance
Contract-Although a party is not excused from performance if the other party breaches, contract law provides damages to the non-breaching party |
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Term
| Modern Approach: Exceptions to Performance |
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Definition
When Breach DOES excuse performance:
1.Doctrine fo actual and constructive eviction
2.Implied warranty of habitability
3. Statutory changes
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Term
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Definition
-Question of Law
-Lease (interest in land)
-License (right to use)
-The distinction is possession, lease=possess some estate, License= right to do a particular act
Lease- caveat emptor
License-Duty of Reasonable Care |
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Term
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Definition
Tenant is entitled to possession and exclusive occupancy/control of the premise
Landloard is not liable for injuries caused by defective condtitions because they are not in control of the premise |
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Term
| License-Duty of reasonable care |
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Definition
| Licensee merely has a contract for use without a transfer in an interest in land EX. seasonal rental of a cottage |
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Term
| Four Types of Leasehold Estates |
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Definition
Term of years
Periodic Tenancy
Tenancy at will
Tenancy at sufferance |
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Term
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Definition
Duration-Fixed time
Creation-Written or oral(only good if under a year) (SOF)
Termination-End automatically at its termination date,must be certain, Death does not terminate the lease
Also:1. breach of covenant, 2. failure to pay rent, 3. Surrender |
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Term
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Definition
Duration- (week to week, month to month), Automatic Renewal
Creation-Express agreement, Implication, operation of law
Termination-By either party, upon given proper notice
*Automatically renewed until proper notice |
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Term
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Definition
Duration-no fixed duration
Creation-agreement(w/o duration), taking of possession with consent, void lease prior to payments, after periodic payments lease becomes a periodic
Termination-Common Law- either party could terminate w/o formal notice(reaonable time given to vacate)
Operation of law-Death of either party
Conveyance of LL reversion
T's attempted conveyance |
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Term
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Definition
Duration- Until demand for possession is made, or different tenancy is made
Creation- T wrongfully remains in possession after the expiration of a lawful tenancy
Termination-no notice is required, 2 choices:
1. Eviction
2. Bind to a new tenancy-Commercial leases=T may be held to a new year to year lease on same terms, Residential leases-T may be held to new month to month lease, regardless of old term |
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Term
| Covenant for Quiet Enjoyment |
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Definition
(1)Guarentees LL will keep premise open to lessee's entry, both legally and actually (majority, english)=he who lets agrees to give possession
Minority(American)-Cov is not implied, LL only has duty to give legal possession
(2)LL will not interfere with T's sole right to possess
(3) No 3rd person who has better right will disturb T's possession |
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Term
| Breach & Damages of Cov for Quiet Enjoyment |
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Definition
General Damages- The difference between the actual/fair rent value and the rent agreed upon in lease(for time T was deprived possession
Specific Damages-cant be speculative must be specifically proven (lost future profits) |
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Term
| Covenant of Power to Demise |
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Definition
(always implied in leases)
One who purports to lease should have the power to transfer the estate contemplated by the parties |
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Term
| Covenant to Occupy or Covanents in Aid of Percentage Rental clause |
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Definition
T has no duty to occupy or use the the premise
Exeception:Majority-unless fixed minimum rent is zero or nominal
Minority-despite a fixed minumal rent above the nominal level, the parties may have intended that the tenant occupy and conduct business |
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Term
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Definition
"Let the buyer beware"
Residential-modern trend is that LL must disclose all defects
Commercial-no disclosure required unless:LL has knowledge of latent defect, T would not reasonably discover upon inspection with due diligence |
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Term
Duty to Repair (common Law)
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Definition
| Absent any agreement, neither the LL nor T has any duty to make any kind of repairs(but T cannot commit waste, and wind and water tight) |
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Term
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Definition
| General-stipulates that either LL or T will Make all the repairs |
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Term
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Definition
| T must return the property to Ll in good or same condition |
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Term
| Destruction of Premises without fault |
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Definition
Without express contract term or statute, neither party must restore property, but the T must still pay rent
(most states by law or statute, allow T to terminate the lease even without an agreement) |
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Term
| Actual, Parital and Constructive Eviction are under what kind of law |
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Definition
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Term
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Definition
Occurs when: LL excludes T from entire premise, must include phyisical ousting
LL breach of Cov of Quiet Enjoyment=termination of T's obligaiton to pay rent
Purpose=T's defense to payment of rent |
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Term
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Definition
Occurs when: A portion of the property becomes uninhabatible or untenable, Notice and oppurtunity to repair are required, T MUST vacate that part of premises
LL breach of cov of quiet enjoyment
Purpose:T's defense to payment of whole or part of rent |
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Term
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Definition
Occurs when: LL does/doesn't do somehtin that SUBSTAINTIALLY renders the property uninhabitable or untenable, LL failure to meet express or implied obligaiton
Written notice & oppurtunity to repair required
LL failure to perform an affirmative duty
Purpose: Common Law=defense to payment of rent, Modern=Termination and damages |
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Term
Implied and Statutory Warranties of Habitability applies to residential or commericial?
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Definition
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Term
| IWoH abandons what 4 concepts |
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Definition
1. Caveat Emptor in Residential leases
2. Assumption of risk
3. Constuctive Eviction doctrine
4. Abandonment requirement |
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Term
| IWoH applies to what types of Tenancies. |
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Definition
| All but Tenancy at sufferance |
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Term
In General what must LL supply in IWoH?
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Definition
| Drinking water,heat(in cold), sewer, safe/working electricity, smoke detector, locks, no rodents/bugs, Sanitary conditons inside and out |
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Term
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Definition
CANNOT by either party, even if expressed
"as is" may be a breach |
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Term
When is LL not liable for breach of IWoH?
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Definition
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Term
| T must allege what elements of Breach in IWoH? |
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Definition
1. Entry into lease for residential property
2. Subsequent development of dangerous or unsanitary conditions, affecting life, health, and safety of T
3. Reasonable notice (30 days)
4. Failure of LL to repair |
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Term
| T's Burden of Proof in Breach of IWoH? |
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Definition
| T must prove: Notice to LL, Reasonable Time for correction |
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Term
| Possible Remedies for T in breach of IWoH |
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Definition
1. Vacate and terminate
2. Repair and deduct
3.Sue for damages
4. Sue to force LL to make repairs |
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Term
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Definition
Standard-LL's morally culpable conduct, ethical indignation
Willful/wanton/fraudulant breach through ill will,insult, oppression, or reckless disregard of T's rights |
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Term
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Definition
Affirmative defense to unlawful detainer action
Rule
A LL may NOT terminate a lease or otherwise penalize T in retaliation for T’s exercise of his legal rights Retaliatory actions include:
Attempting, threatening or actually evicting T
Increasing rent
Decreasing services
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Term
Purpose, Elements, & Presumption of
Retaliatory Eviction |
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Definition
Purpose:(1) Public policy of maintaining effective enforcement of housing codes
(2) Protect 1st Amendment rights of T
Elements:
(1) A protective housing code exists
(2) LL is in the business of residential rentals
(3) No material default by tenant
(4) Tenant’s complaint was in good faith and with reasonable care
Presumption:
LL acts in retaliation if eviction, threat, or attempt occur within 90-180 days of tenant’s:
Complaint to government
Complaint to LL
Organizing or joining a tenant’s union
But, T must be current on rent obligations
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Term
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Definition
Statutory limits:
Limited to one month rent
Notice within 14 days of damages/termination of lease
T can claim damages if not returned
Landlord duties:
Provide a written, itemized state of damages to the departed tenant
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Term
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Definition
Rule:
LL may terminate lease, seek damages, and/or seek an injunction if T uses the property for illegal purposes
But, occasional unlawful conduct by T does not breach |
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Term
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Definition
Common law v. Modern Trends
Common law- rent was due at the end of the lease term
Modern- statutes that provide that is the lease terminate before the time originally agreed upon, the tenant must pay a proportionate amount of the agreed rent
LL’s remedies
Rent: Although T’s failure to pay rent may terminate the lease, most courts give T chance to cure this at trial
Unlawful retainer: the only issue presented is the right to possession and T cannot raise counterclaims |
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Term
LL’s Tort Liability Under common law |
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Definition
Common law- no duty to make premises safe
Modern Common Law- no duty to make premises safe, with SIX exceptions:
(1) Concealed dangerous latent defects
LL must disclose, not necessarily repair
(2) Reasonable care for common areas
(3) Public use
(4) Furnished short-term lease
LL has strict liability for both known and unknown defects
(5) Negligent repairs by LL
(6) LL promises to repair
**(7) SOME courts hold LL liable for 3rd party criminals if LL failed to:
Comply with housing codes dealing with security
Maintain ordinary security measures
Provide an advertised extraordinary security measures |
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Term
LL’s Tort Liability Modern Trend |
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Definition
Modern Trend
General duty of reasonable care
LL will be liable for injuries resulting from ordinary negligence if LL has notice of defect and the opportunity to repair
LL is generally held to have notice of defects existing before T takes possession but NOT for defects that arise after T takes possession, unless L should have known about them
Legal duty to repair- if L has a statutory duty to repair (i.e. housing code) LL will be liable for injuries resulting from his failure to repair or negligent repair |
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Term
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Definition
Assignment- a complete transfer of the entire remaining term
Partial assignment- assignor relinquishes possession of part of the premises for the full remaining term
Sublease- tenant retains any part of the remaining term (other than a right to terminate upon breach, which does not convert a sublease into an assignment under the majority rule)
Assignments |
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Term
| General Rule For leases when it comes to subleasing and assigning? |
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Definition
| Absent an express restriction in the lease, a tenant may freely transfer leasehold, in whole (assignment) or in part (sublease). |
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Term
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Definition
Consequences of Assignment
Privity of Estate- T-2 (assignee) “stands in the shoes” of the original tenant in a direct relationship with the LL
T-2 and LL are liable to one another on all covenants running with the land
Retention of the Right of Termination in Assignments
Majority- reservation of a right to terminate the transferred interest prior to the end of the term does NOT make the transfer a sublease rather than an assignment
Minority- reservation of a right to terminate for failure to pay rent makes the transfer a sublease and not a true assignment |
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Term
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Definition
Additional or Different Terms in Assignment
An assignment need NOT contain identical terms to the original lease
New or different terms do NOT change the assignment into a sublease
I.E. Assignor can charge assignee higher rent than LL charged Assignor
Covenants that Run with the Land (Privity of Estate)
A covenant runs with the land IF:
(1) Original parties to the lease so intended
(2) Covenant “touches and concerns” the land
Benefits LL and burden T, or vice versa and concerns the parties’ rights with respect to interest in land
Result:
Assignee (T-2) owes covenants directly to LL (privity of estate)
Obligation of performance of covenants that directly affect the rights of the parties with respect to their interests in the land passes to the succeeding owner of the interest of the promisor (i.e. the assignee T-2)
Assignor (T-1) acts as a surety for T-2 for LL (privity of contract)
Exception: LL releases T-1 OR LL agrees to a novation
Privity of Contract in Assignments
T-1 (the assignor) ALWAYS remains in privity of contract with LL, unless LL releases T-1 or agrees to novation
T-2 is NEVER in privity of contract, unless he agrees to assume the contractual obligations of the lease (novation)
As a result, T-2 is not liable for rents accrued before the assignment
But if T-2 assumes contractual obligations of the lease, he IS liable for rents accrued before the assignment
Today, if T-2 agrees to novation, LL may enforce obligations by:
(1) Traditional property law
(2) Contract law of third-party beneficiaries
Sublease |
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Term
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Definition
Consequences of a sublease
T-2 is the tenant of T-1, who is still the tenant of LL
T-2 pays rent to T-1, who pays rent to LL
Privity of T-2 Sublessee (NONE)
T-2 (sublessee) is NEITHER in privity of contract or privity of estate with LL
T-2 is liable only to T-1, and is not directly liable to LL
Exception: Assumed Liability
Sub-lessee is NOT personally liable to the LL for rent or for performance of any of the covenants in the main lease UNLESS the sublessee expressly assumes the covenants
Privity of T-1 Lessee (ALL)
T-1 in in BOTH privity of contract and privity of estate with LL
Continued liability
T-1 remains liable for rent accruing after the sublease
T-1 may purse breach of contract remedies against T-2
Landlord Remedies
Terminate the main lease (if power is stated in lease or by statute)
Sublease automatically ends
Assert a lien on the personal property found on premises
Affects both the lessee AND sub-lessee’s property
Rights of Sublessee (T-2)
In general, T-2 cannot enforce ANY lease covenant against LL
Exception: Implied warranty of habitability |
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Term
Covenants AGAINST Assignments or Subleases
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Definition
Interpretation
Strictly construed against LL
I.E. Covenant prohibiting assignment does not prohibit subleasing, and vice versa
Not favored by courts as a restraint on alienation
But, contractual restrictions on the alienability of leasehold interests are permitted
Waiver- Rule from Dumpor’s Case
Occurs if:
LL is AWARE of assignment
Did not object to assignment (i.e. by knowingly accepting rent from the assignee)
Once the LL consents to one transfer, he waives his covenant restricting assignments and subleases UNLESS he expressly reserves it
Transfer in violation of lease
Voidable, not void
LL may:
Accept transfer, or
Terminate, or
Sue for damages
Landlord’s discretion permitting assignment and subleasing
Majority- A lessor may arbitrarily refuse to approve a proposed assignee no matter how suitable the assignee appears to be and no matter how unreasonable the lessor’s objections
Grounds for majority rule:
(1) As a conveyance, LL is free to exercise personal choice
(2) Approval clause is an unambiguous contract reservation
(3) Stare Decisis
(4) Tradition
Minority- Where a lease provide for the lessor’s exclusive consent to an assignment, consent may be withheld only where the lessor has a commercially reasonable objection, even in the absence of a provision in the lease stating that consent will not be unreasonably withheld.
Evolved from an increasingly urban society
Reasonableness= comparing the justification for a particular restraint on the quantum of restrain actually imposed
Grounds for minority rule:
(1) Policy against restraints
(2) Good faith doctrine
Question of fact, factors:
(1) Financial responsibility of proposed assignee
(2) Suitability of use for the particular property
(3) Legality of the proposed use
(4) Need for alteration of the premises
(5) Nature of the occupancy |
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Term
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Definition
In general:
LL may assign:
Rents
Reversion interest
Done by deed when LL conveys building to new owner
T’s consent is NOT required
BUT:
There can be an assignment of rent without an assignment of the reversion, as well as an assignment of the reversion without the rent
An assignment of only the reversion transfers to the assignee the benefits and burdens of covenants running with the land
But, the assignee and the original LL are liable for the performance of the covenants
Attornment
Once tenants are given reasonable notice of the LL’s assignment to a new owner, they must:
(1) Recognize new owner
(2) Pay rent to the new owner |
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Term
“Natural” Termination v. Other Grounds for Termination
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Definition
Natural
Term of years- ends automatically at its termination date
Periodic- automatically renewed until proper notice is given
Tenancy at will- by either party, without formal notice, as long as T is given reasonable time to vacate
Also by operation of law (death of either party)
Tenancy at sufferance- ends when LL takes step to evict tenant, without notice
Other Grounds
Breach of covenants
Failure to pay rent
Abandonment and surrender
Unlawful Detainer
When any person willfully and without force holds over any property, after termination of the time of lease
Statutes governing unlawful detainer are strictly construed
Harshness of the remedy allowed for unlawful detainer action- double rents and profits
Landlord held to high standard in observance of every requirement of the common law, unless waived in the agreement
I.E. Notice |
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Term
Termination in Periodic Tenancies: Notice Requirement
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Definition
Majority
Where the notice purports to require the tenant to vacate less than thirty days after the end of the month in which the notice is given, the notice is completely invalid and ineffective to terminate the tenancy at any date
Favors tenant
Minority (Second Restatement)
If the date stated in the notice for termination is not the end of a period or is too short a time before the end of a period, the notice will be effective to terminate the lease at the earliest possible date after the date stated
Favors landlord |
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Term
Termination Notice General Requirements
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Definition
(1) Statement that the party giving it, landlord or tenant, elects to terminate the tenancy
(2) Description of the premises, adequate to meet any requirements for description under state law
(3) Reference to the time of termination, either to a specific date or to the end of the next period of the leasehold after the date of service
(4) Date of the notice
(5) Signature by the landlord or tenant |
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Term
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Definition
Modern
Majority: NO self-help
Forcible Entry and Detainer Statutes (FED)
Enacted in response to potential for violent conflict in forcible reentry
Protection for Tenant:
Made it a criminal offense for a party to forcibly oust another from possession of real property, and also provided a judicial remedy to the tenant who had been wrongfully put out of possession
Protection for Landlord:
Provided LL with summary judicial proceeding- an alternative to cumbersome and expensive ejectment action
If a state does NOT have a FED, they give Landlord remedy through unlawful detainer action
Minority: English rule of “peaceful” self-help
In addition to FED and UD statutes, a small number of states continue to allow landlords to use some degree of self-help when seeking to regain possession of residential property
Reasoning:
Unless so declared in the statute, summary judicial proceedings are merely cumulative and do not abolish the existing common law remedy of self-help |
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Term
Summary Actions for Recovery of Possession
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Definition
Common law
LL could recover possession from a tenant ONLY WHEN:
(1) Leasehold had terminated by expiration of the term of the lease
(2) By proper notice when the tenancy was of indefinite duration
(3) By the exercise of a right of entry (or power of termination) expressly reserved in the lease
In the absence of an express right of entry, breach by the tenant (including the promise to pay rent) did NOT confer on the LL the right of eviction
Why?
Property law- right of entry is a property interest which can ONLY be created by expressly reserving it in a lease
Contract law- Promise to pay rent is independent from LL’s performance of his own covenants |
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Term
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Definition
Contract- where a contract’s formation or performance is expressly forbidden by a civil or criminal statute or where penalty is imposed for doing an act agreed upon
Lease
Illegal in whole:
(1) If a lease provides that the premises shall be used for, and only for, one or more stated purposes, AND
(2) That purpose is, or those purposes are all, forbidden by law, then the lease and all parts thereof are VOID, with the result that neither party may have any legal remedy
Illegal in part:
Where the lease permits legal and illegal purposes, the lease is NOT void for the legal provisions/use, and use MAY be made of the land
Supervening Illegality:
A change in the law that invalidates an agreement. The lease was legal at its formation, but whose use was later outlawed
The lease becomes unenforceable |
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Term
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Definition
Occurs when unexpected events arise which made a lease impossible to be performed (because of total, partial, and supervening illegality), entitling the frustrated party to rescind the contract WITHOUT paying damages
Majority:
In leases, total or near total frustration is required to rescind
Minority:
Allow tenant to rescind even if a portion of use remains legal and there is only “some” frustration of purpose |
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Term
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Definition
If a variance is possible, the lease is enforceable
Bulk variance- concerns larger changes to the structure of the property
Use variance- concerns the purpose for which the property may be utilized
Only granted if LL or T convinces local zoning board that the property cannot be of any profitable use without the variance |
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Term
Abandonment and Surrender
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Definition
Traditional LL responses (majority):
(1) Sit tight and continue to enforce
(2) Re-enter and mitigate for former tenant’s account
(3) Accept the surrender and re-enter for landlord’s own account
Modern Trend (minority):
(1) Re-enter and mitigate
(2) Accept surrender and terminate
NO OPTION TO DO NOTHING
Imposes a duty on landlord to mitigate, but T cannot sue LL based on breach of duty to mitigate.
T can only use LL’s failure to mitigate as a defense |
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Term
Mitigation (based on property law)
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Definition
LL will make “reasonable efforts” to fill the premises with another tenant, so as to reduce the breaching tenant’s damages instead of doing nothing
Advertisement of the premises
Possible renovations
Clean, show property
Enter into a rental agreement with a replacement tenant
Original tenant will still be liable for any of replacement tenant’s shortfalls
Modern trend: Require LL to mitigate
Why?
Prevent economic waste
Helps prevent destruction of property
Does not allow LL to seek breach of contract remedies, which are harsh and not favored by courts
Result
LL’s failure to reasonably mitigate bars recovery for damages that could have been avoided |
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Term
Surrender (based on contract law)
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Definition
Based on contract concept that parties can agree to modify or terminate their agreement
Possible issue:
Legal requirement for surrender formalities
Statute of Frauds writing requirement
But, under local statute of fraud rules, parties may not be held to the strict English standard of the rule
Process
Tenant quits the premises before the end of the term without the intent to return
“Abandonment”
Works as an offer to the landlord to accept and terminate the lease
If Landlord takes back the premises for his account= acceptance and agreement to terminate
If Landlord takes back the premises for the tenant’s account= acts as an agent to sublease to a replacement tenant, but original tenant’s lease is still enforceable
LL must be careful not to do too much to the property or alter the lease for the replacement tenant because this will work as a termination and not mitigation
Fixtures |
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Term
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Definition
Definition
A chattel that has been so affixed to the land that it has ceased being personal property
When items are incorporated into the realty so that they lose their identity (e.g. bricks, concrete), they are fixtures, as are items that are identifiable but whose removal would cause considerable damage (plumbing, heating ducts) |
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Term
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Definition
Depends on the INTENT of the parties as expressed in the agreement between the landlord and tenant
(1) Nature of the article
(2) Manner of attachment
(3) Amount of damage caused by removal
(4) Adaptation of the item to the use of the realty
Absent an express agreement, the tenant is deemed to lack the intent to permanently improve property, and may remove fixtures is removal would not damage the premises or destroy the chattel |
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Term
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Definition
Must be removed by the end of the lease term (or within a reasonable time after)
Tenant is responsible for repairing any damage caused by the removal |
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Term
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Definition
An article of personal property of the tenant that is so uniquely adapted to the real estate that it makes no sense to separate it, may be considered a fixture even if it is not physically attached to the property
Example- keys to doors, custom curtain rods |
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Term
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Definition
Life estate holders
Tenants
Licensees
BUT NOT:
Trespassers
Adverse possessors |
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Term
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Definition
Domestic
Tenant’s fixtures
Personal property belonging to a tenant which the tenant affixes to rental property, but which he or she is entitled to take with him or her at the end of the lease (i.e. picture frame)
Trade
Personal property belonging to the tenant which, instead of being attached during his tenure as tenant, is attached for business purposes (i.e. display counters) |
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