Nature of Leases
· Lease is an agreement between owner of property (landlord) and lessee (tenant) for exclusive possession of property.
· Leaseholds are estates in land.
· Modern leases are both conveyances and contracts.
Leaseholds vs. Licenses
· Distinction turns on whether the person is merely in “possession” or has the right to “use” the land.
· Licenses, easements, and profits a prendre involve using the land, not possessing it.
o Profits a prendre are rights to remove a substance, e.g., sand and minerals, from another owner’s land.
o A licensee has only a privilege to use, not right of possession.
· Licenses are revocable at-will by the landowner.
· Exceptions:
o Mortgagee in Possession – Mortgagee is allowed to possess the mortgaged land (has possession but no leasehold/estate).
o Contract Purchaser – Installment sales contract still paying on the purchase price and therefore has no deed.
· Hotel guests/lodgers are not viewed as having possession.
Requirements to have Leasehold Estate
· Must arise from a contract, express or implied.
· Reversion in the landlord.
· Creation of an estate in the tenant, either at-will or for a term less than that which the landlord holds.
· Transfer of exclusive possession and control to tenant.
Leasehold
Occupy fixed space
Set off from rest of property
Little control of LL
“Tenant” or “Lessee”
Payment is called “rent”
License
May be moved around at-will
Not set off from remainder
Greater control of LL
“Licensee”
Payment is not called “rent”
Types of Tenancies
· Years
· Periodic
· Will
· Sufferance
Tenancy for Years
· Created by express agreement.
· Expires at end of defined period as set forth in lease.
· Termination at end of lease w/ no notice req’d
· Need not commence when lease is executed/delivered.
Periodic Tenancy
· Created by express agreement or implied when term for years expires and T continues to pay which LL accepts.
· If agreement has no express length term, length will correspond to frequency of rent payment.
· Termination by express notice by either party, notice equal to period of tenancy with a termination date.
o Ex: rent on 7/1, notice on 7/14, terminate on 9/1
· Periods > 1 yr only need 6m notice; some courts only 1m
Tenancy at Will
· Created by express or implied agreement.
· Not transferable or assignable.
· Termination by wish (or death) of either party.
o At C/L, terminable with no notice.
o Most statutes require 30d notice.
· If state’s SOF requires writing, all oral leases are at-will.
Tenancy at Sufferance
· Not really tenancy at all; only created after T enters into a valid lease of one of the other three types, then holds over past end of lease term.
· Can’t hold over only part of premises; it’s all-or-nothing.
· T at sufferance is not a trespasser; main reason is to prevent T from using adverse possession claim.
· LL can either (1) evict T and sue for dmgs or (2) consent to T’s continued possession and hold him liable for another term.
o Evict: No notice req’d; oust through judicial process, not self-help. Once LL chooses to evict, he cannot change his mind and try to extend lease. Dmgs recoverable for (1) failure to surrender premises and (2) reasonable rental value of time occupied. LL may have special right to double or treble dmgs.
o Renew: Some cts renew lease for same duration as original lease; other courts renew for period of one rent payment. If LL notifies T of renewal w/ increased rent, T will impliedly assent if he remains silent or fails to express non-assent.
· If LL evicts, his dmgs are tortious (trespass); if LL renews, his dmgs are contractual (rent).
· T’s holding over must be voluntary AND if T leaves PP on premises he is not liable if it doesn’t interfere with LL’s possession. (Policy: Limits imposed because of holdover doctrine’s overall harsh effect on tenants.)
Statute of Frauds
· If LL creates tenancy by oral agreement for term longer than permitted by SOF, agreement as to duration is void.
· Results in tenancy at will, which converts to periodic upon first rent payment.
Covenant of Quiet Enjoyment
· Implied in every lease.
· Secures T against acts or hindrances by LL and any persons deriving rights from LL and from those w/ paramount title.
· Does not secure T against acts by strangers.
· CQE requires that (1) T has sole right of possession, or alternatively, (2) no third-party w/ better right of possession will disturb T.
o 3rd-party usually someone w/ mortgage pre-dating T’s lease, who forecloses on the LL and ret
ses to claim constructive eviction. (Inequitable to allow tenant to have it both ways.)
o Hood Says: Problem w/ requiring abandonment is that poor people living in slums have nowhere else to go.
· Noxious odor, failure of essential services, interference w/ easements, etc. are constructive, not actual evictions.
Housing Code Approach to Residential Premises
· LL’s req’d to provide residential T’s with decent, safe, and sanitary living spaces, especially in multi-family housing. Established minimum standards for: (1) structural elements; (2) facilities; (3) services; and (4) occupancy limits.
· Housing Codes didn’t work because there weren’t enough inspectors, many inspectors were crooked, and T’s feared retaliation by LL for filing complaints.
Implied Warranty of Habitability
· C/L Rule: Followed same rule as commercial leases; “lessee beware.”
· Modern Rule: Lease is a contract b/t LL and T wherein LL promises to deliver and maintain premises in habitable condition in consideration for T’s promise to pay rent.
o Policy: T has inferior bargaining power and less experience than LL and needs law’s protection.
o IWOH is not limited to multi-family housing.
o Promise to maintain premises and promise to pay rent are dependent conditions; therefore, T’s promise to pay rent is predicated on LL’s obligation to maintain premises.
· “Habitable” means “fit for human habitation”.
· Req’s premises be safe, sanitary and weather-tight.
· Req’s “essential” services: heat, water, plumbing, sewage, and working locks throughout the facility. [Decoration not req’d.]
· Covers both patent and latent defects, even if known to T.
· Cannot be waived; no assumption of risk by T for entering premises known to be uninhabitable.
Cause of Action for Breach of IWOH
· T must:
o Show he notified LL of defect(s).
Allowed reasonable time for repair.
