I. Leasehold Estates—a legal interest that entitles the tenant to immediate possession of designated land, for either a fixed period of time or for so long as the tenant and landlord desire.
A. Four Types
1. Term of years tenancy
a. Statute of Frauds applies if greater than one year.
(1) Basic lease terms
(2) Rent
(3) Parties
(4) Description of property
(5) Signature (Some states only require lessor to sign.)
2. Periodic tenancy—initial fixed period, automatically renews until terminated by giving advance notice.
3. Tenancy at will—no fixed duration; at will.
4. Tenancy at sufferance—person in rightful possession wrongfully continues possession after right ends.
B. Modern Rules
1. the L is obligated to maintain the premises in habitable condition;
2. the T has not obligation to pay rent if structures crucial to the lease are destroyed;
3. the T may terminate the lease and stop paying rent if the L materially breaches any lease obligations; and
4. the L may be obligated to mitigate damages if the T abandons the premises.
C. Javins v. First National Realty Corp., leases of urban dwelling units should be interpreted and construed like any other K.
1. honors the legitimate expectations of the parties,
2. produces results that are consistent with contemporary values and standards.
D. Fair Housing Act
1. Bars discrimination based on race, color, religion, sex, familial status, national origin, or handicap.
2. Violations would be:
a. Refusing to rent or sell;
b. Refusing to negotiate for rental or sale;
c. Discrimination in terms, conditions, facilities or services;
d. Falsely representing that the property is not available for inspection, rent or sale;
e. Publishing any advertisement that indicates any preference or limitation on prospective tenants or buyers.
E.Delivery of Possession:
1. American: right of possession. (Min.)
2. English: actual possession. (Maj.)
F.Condition
1. CL:
a. caveat lessee; let the tenant beware.
b. If lease silent, L had no duty to repair.
G. No Duty to Repair: Exceptions
1. short-term lease of furnished premises;
2. fraudulently represented the condition of premises;
3. L aware of hidden or “latent” defects.
H. Permissive Waste
1. T obligated to exercise reasonable care to protect premises from injury.
I. Lease assigns repair duty to T.
1. Criteria to determine responsibility for govt.-required repairs between L and T include:
a. the cost of the upgrade in relation to rent.
b. the length of the lease term.
c. whether the cure was structural or non-structural.
d. whether the cure would interfere with the enjoyment or business of the tenant.
e. which party benefited the most from the upgrade.
f. the likelihood that the parties contemplated the application of the particular law involved.
J. Duty to Occupy
1. Typically, none.
2. Business: sometimes an Implied Covenant to Operate Business
a. Where all or most rent calculated as % of sales. Not applicable if “substantial” minimum rent.
K. Fixtures
1. CL: became property of L.
a. Exception: trade fixtures could be removed before lease ended.
2. Modern: depends on intent of T.
II. Warranty
A. Caveat Lessee
1. Landlord typically has no duty to repair, except:
a. L knows or should have known of a defect, and T could not be expected to notice by inspection.
b. Common areas under L’s control.
c. K obligated repair.
d. Short-term, furnished.
e. Lease for building under construction.
2. At CL: In case of breach, the T’s only option was to keep paying rent and sue for damages.
3. T may be responsible for repairs under the doctrine of permissive waste.
B. Implied Warranty of Habitability
1. Breach
a. Standard rule for breach: objectively, if a normal person would find the dwelling unfit for occupancy.
b. Pugh v. Holmes: breach: “the defect must be of a nature and kind which will prevent the use of the dwelling for its intended purpose to provide premises fit for habitation by its dwellers.”
2. Remedy
a. Remain in possession and sue for damages
b. Vacate and sue for damages
3. Assessing damages
a. Rent – Fair Market Value(as is) = damage
b. FMV (as warranted[implied]) – FMV(as is) = damage
c. Rent – Loss of Use = damage
(1) This is a “percentage reduction of use” formula.
4. Applicable only to residential leases; not commercial.
C. Statutory Warranty of Habitability
1. Usually broader than the Implied Warranty.
2. Can be waived by tenant (not so, in CL warranty of habitability).
D. Substandard housing.
1. Typical 1960s housing code might require:
a. heat
b. hot and cold water
c. operable plumbing facilities
d. adequate windows and ventilation
e. no infestation of insects, vermin, or rodents
f. safe electrical wiring
g. a watertight roof
E.Personal Injury
1. A residential L has a duty to use reasonable care under all relevant circumstances to prevent foreseeable harm.
F.Liability for Criminal Attack
1. Foreseeable criminal attacks in common area
ed transferee;
(2) The nature of the new use proposed for the premises;
(3) The suitability of the proposed use for the premises;
(4) The legality of the use;
(5) The need for alterations to the premises; and
(6) Whether the use will compete with L’s business or other existing Ts.
3. Maj.: If no standard is specified, Sole Discretion is applied.
4. Min.: If no standard is specified, Reasonableness Standard.
5. C to D. Future transfers are impliedly granted by a previous consent.
IV. Termination of Estate
A. Notice
1. CL: any time, any cause or no cause.
2. Year to Year: six months notice (now, 2 or 3)
3. Month to Month: 1 month notice from end of current month.
B. Constructive Eviction
1. If the tenant can show 1) active interference with its possession (or interference that results from inaction in the face of an independent duty to act), and 2) that this interference is attributable to the landlord’s agent, or a paramount title holder, then the landlord has breached the covenant of quiet enjoyment, and tenant will have available the standard contract remedies for that breach.
C. Surrender—mutual agreement; T surrenders and L accepts.
D. Abandonment—occurs when tenant
1. Vacates without justification.
2. Lacks present intent to return.
3. Defaults on the payment of rent.
4. Consider:
a. T’s statements,
b. Amount/nature of property left behind,
c. Duration of absence,
d. Other factors
E.Three options after abandonment:
1. Leave vacant and sue later.
a. Good for solvent tenant; not if insolvent.
b. CL: sue monthly or just wait until the end of lease.
c. Modern views:
(1) “acceleration clause” all rent for future is due immediately upon abandonment, or
(2) must terminate lease or mitigate damages
2. Mitigate damage by reletting on tenant’s behalf.
a. Better option if insolvent tenant. The modern trend embraces this theory. Some states (a minority) only apply mitigation requirement to residential L.
b. If L can increase rent, he
