PROPERTY OUTLINE SPRING 2013
Non-Freehold Estates: Cannot sell or pass at death like a traditional conveyance.
1) Term of Years- An agreement that will continue for a set designated period of time.
· Ex: “to T for four years,” or “to T from January 15, 1998 through March 15, 1998”
· Term of years determinable: “to T for 25 years, so long as Greenacre is used as a farm”
· Future Interest: a reversion, if it is to a third party it is a remainder.
· There is no notice of termination required.
· How to terminate: The happening of an event, the tenant abandons the leased premises, mutual agreement, condemnation (legally unfit for occupancy), or eminent domain (government acquires the property for public use), or it ends naturally.
· Can be a term of years determinable or term of years subject to a condition subsequent.
· In NC, if longer than 3 years it must be in writing.
2) Periodic Tenancy-A lease for a period of some fixed duration that continues for succeeding periods, until either landlord or tenant gives notice of termination.
· Ex: “to A from month to month”
· Common Law Rules-Half a years’ notice is required to terminate a year to year tenancy, or for less than a year the notice of termination must be given equal to the length of the period but not to exceed 6 months.
· Modern Days Rule: Only 30 days’ notice is required.
· This is continuous, indefinite, and expressly created.
· Expressly created: “form year to year,” or “ from month to month”
· By Implication:
-Most looks like a tenancy at will.
– Unspecified period of time where rent will be paid periodically. Ex: “to T from January 20, 1999 for $500 per month.” Or where the tenant remains in possession with the landlords consent and continues to pay rent after the prior tenancy has terminated. Or where the tenant takes possession under a void lease and makes periodic rent payments.
· Must give proper notice to terminate; either written or oral notice. Apartments are 60 days, month to month=7days, and week to week=2 days.
· If notice is given 60 days in advance before the end of the rental period, it doesn’t matter what type of place you live in. (NC).
3) Tenancy at Will-A tenancy of no fixed period that endures so long as both the landlord and the tenant desire.
· Created through an express agreement between the landlord and tenant.
· These are rare agreements.
· Terminated through the death of either party, abandonment by the tenant, mutual agreement, condemnation, or notice of termination.
· How much notice is required to terminate? In NC no notice is required, either party can terminate, and the tenant is givien reasonable time to vacate.
· Common Law: Both parties can terminate.
· Modern Law: Landlord can terminate.
4) Tenancy at Sufferance- Only happens when a tenant under another type of lease holds over after the expiration of the lease.
· The possession is not for a definite length of time and that tenant is known as a holdover tenant (they are wrongfully on the premises).
· Holdover Tenant: A tenant that stays in possession (must be voluntary) of the property after the lease has ended.
· The landlord may either: Evict the tenant with damages (self-help is not allowed), or give consent to a new tenancy.
· If the tenant pays rent then this becomes a tenancy at will.
· There is no notice needed to terminate the tenancy (tenant can be evicted, landlord consents to termination, tenant quits premises, or the landlord accepts rent).
· In NC the courts will determine the new tenancy by what the old agreement was. Ex: A year or longer agreement will become a year to year agreement, and anything less than that will be looked at by how the rent was reserved (i.e. monthly payments, or weekly payments). The terms of the lease will be the same as the original lease.
· The max duration on a new tenancy is 1 year.
Numerus Clausus: The prohibition of new or customized property interests, you can only use legally recognized property interests.
The Lease: The lease transfers a possessory interest in land, so it is considered a conveyance that creates property rights. It is also considered a contract because of the promises that it creates.
· American Statutes and the Statute of Frauds state that the lease must be in writing.
· Form leases have little bargaining power, so the government will police the leasing terms that give people unequal bargaining power.
Fair Housing Act: Enacted in 1968 prevents the discrimination of potential tenants by landlords.
· Does not apply to single owner houses, unless the owner is renting or owns more than 3 single-family houses at any time.
· Defendant can only win if the claim is truly frivolous or in bad faith, and even then they can only recover attorney’s fees from the plaintiff.
· Policy: To prevent discrimination against people while
essee transfers anything less than the entire interest and keeps a reversion interest then the conveyance is a sublease.
· Signing a sublease does not extinguish the privity of estate or privity of contract between the tenant and landlord.
· The only way the tenant can be released is through novation.
· The subtenant is in privity of estate with the tenant and not the landlord.
· In order for the subtenant to be in privity of contract with the landlord, the subtenant must agree with the terms of the head lease.
· If the tenant stops paying then the landlord can terminate the head lease for breach of promise to pay rent. Some jurisdictions will allow the landlord to get the unpaid rent from the subtenant. The tenant will owe rent from the time that the subtenant was in possession and the rent was not recieved
2) Assignment-If a lessee transfers his entire interest without a reversion then the conveyance is an assignment.
· An assignment creates privity of estate between the landlord and the assignee because the assignee took possession.
· When a tenant assigns his leasehold to a subtenant, privity of contract still exists between the landlord and tenant unless the landlord expressly releases the tenant from his contractual obligations, or if there is an implied release (novation)
· Do not have to expressly agree to terms that run with the land.
· If there is no possession then there is no privity of estate.
· If an assignee expressly agrees to be bound by the terms in the head lease then the assignee is in both privity of estate and privity of contract with the landlord, otherwise the subtenant is only in privity of contract with the tenant.
Privity: A voluntary transactional relationship between two or more people or entities.
Privity of Estate: The conveyance between a landlord and a tenant when one takes possession.
Privity of Contract: The lease agreement contains promises by one party to the other creates a privity of contract.
