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Property II
University of Georgia School of Law
Beck, J. Randy

I.    The Leasehold Estate
A. Term of Years: Tenancy that lasts for some/any fixed period of time or period computable by formula that results in fixing dates. The lease itself gives notice.
B.   Periodic Tenancy: Tenancy for a period of a fixed duration that continues for succeeding periods until one party gives notice of termination. If no notice given, tenancy automatically extended for another period. At CL, yr requires 6 mos notice.
1.     Problems pg. 446-447
a.)   Prob #1: When T moves out on 9/30 w/out giving notice under following leases:
1.)   “To T for 1 yr, beginning Oct 1.”
a.)   L has no rights against T under this term of years
2.)   “To T from year to year beginning Oct 1.”
a.)   For this periodic tenancy, recent statutes say T must give 30 days notice. Thus, T would be bound for the entire next year’s rent.
3.)   “To T at annual rental of $24K payable $2K/ month on 1st of each month.”
a.)   L’s rights would depend on whether this periodic tenancy was a month to month or year to year tenancy.
2.     Prob #2: Month to month T notified L of 11/30 move out on 11/16.
a.)   Majority of jurisdictions don’t invalidate notice just b/c given at wrong time.
b.)   B/c notice should have been given on 10/31, T likely obligated to pay Dec rent.
C.   Tenancy at Will: Tenancy of no stated duration that endures so long as both LL & T desire. Either party can terminate at any time w/ notice.
1.   If modified by statute requiring 30 days notice, TAW differs from periodic tenancy in only admin ways. (TAW can be terminated at death of 1 party- not periodic tenancy).
2.   Most jurisdictions will treat a lease which doesn’t specify fixed term & provides rent to be paid on 1st of each month (month to month) as a periodic tenancy & not a TAW.
3.   Payment of rent converts a tenancy at will into a periodic tenancy.
4.     Garner v. Gerrish (pg. 447)
a.)   F: L leases “to T so long as T should wish.”
b.)   Where lease language silent as to LL’s termination right, some jurisdictions will infer a reciprocal termination right, thereby creating a Tenancy at Will.
c.)    However, crt adopts RS approach by construing grant as determinable LE where prop only goes back to LL at T’s death. They say this best effectuates parties’ intent.
5.     Problems, pg. 450
a.)   Problem #1: “To T for as many years as L desires.”
1.)   In jurisdictions implying reciprocity of termination, construed as tenancy at will. 
b.)   Problem #2: “For $500/year, L leases to T for duration of the war.”
1.)   Is this a Periodic Tenancy Determinable? Not a term of years b/c no fixed duration. Not a periodic tenancy either b/c either party can terminate whenever they want. Not a tenancy at will either.
D. Tenancy at Sufferance (Holdovers): Where tenant who was rightfully in possession wrongfully remains in possession after termination of tenancy. (Not trespasser or tenant)
1.     Crechale & Polles, Inc. v. Smith, pg. 451
a.)   F: L leases to T for 5 years ending 11/4/99 at $7K/year. T holds over & surrenders possession on 11/27/99 after lease expired.
b.)   At LL’s option, a holdover tenant will take on a periodic tenancy w/ periods calculated based on (i) how rent was determined in original lease or (ii) by length of original term. In either event, this can’t exceed 1 year.
2.     Note #3 (456): If T leaves furniture, LL might be entitled to rent for time b/f removal.
II. The Lease
A. Conveyance v. Contract: Under the purview of separate bodies of law. While at CL, leases treated more like conveyances, modern trend is to treat as K.
B.   SOF: In most jurisdictions, leases > 1 yr, must be in writing. Any greater t/f creates TAW
III. Selection of Tenants (Herein of Unlawful Discrimination)
      A.    Prob #3 (463): M advertises apt in her “white” home & rejects black person. Violations?
1.     FHA § 3604(c):Disallows indicating discriminatory preference in dwelling ad.
2.     FHA § 3603(b):Nothing in §3604 except §3604(c)is applicable to owner of SF house provided that owner doesn’t own more than 3 such family houses at one time.
a.)   Here, the ad violates §3604 & is not exempted by §3603.
b.)   If ad didn’t mention “white,” would not violate advertising provision.
c.)    If ad said “rented only to persons speaking Polish, German or Swedish,” seems to violate b/c it specifies preference for certain national origins
d.)   Exclusion of minority models in RE ads could violate FHA if pattern can be shown.
3.     Civil Rights Act of 1866 (42 USC §1982): All citizens shall have same rights to inherit, purchase, lease, sell, hold & convey real & personal prop.
a.)   This is violated only when M denied black’s application not in merely placing ad.
4.     Civil Rights Act narrower than FHA in that it reaches only race, doesn’t deal w/ services/ facilities, doesn’t apply to non-citizens & doesn’t prohibit advertising. It’s broader in that it contains no exemptions.  
a.)   Under FHA, would be racial discrimination if LL wouldn’t rent to German b/c national origin considered element of race. But, no CRA violation b/c Act only applies to citizens.
b.)   Reserving units to prevent “white flight” held to violate FHA. Opponents argued they were only trying to accomplish integration which is purpose of FHA.  
B.    Soules v. HUD (pg. 465) (Even if you Keep Calling, You Won’t Get This Apartment)
1.     F: Π sued under FHA based on denial of rental, ostensibly due to her familial status (child).
2.     To prove FHA violation:
a.)   Π must establish prima facie case showing: (i) Π member of protected class; (ii) Π applied & was qualified but didn’t get housing; (iii) housing remained available.
b.)   Burden then shifts to Δ to produce evidence that refusal to rent was motivated by legitimate considerations having nothing to do w/ Π’s status.
c.)    Once Δ introduces evidence of his alleged legitimate reasons, burden shifts back to Π to show that alleged legitimate reasons were pretextual & not the real reasons.
3.     Crt held while apt was eventually rented to woman w/out children, no FHA violation b/c Δ had contacted another family w/ children & keeping noise out was legitimate purpose.
C.    Problems pg. 474-476
1.     Problem 2: Discrimination based on Familal Status & Sex:
a.)   LL limits house occupancy to 4 persons & refuse to rent to couple w/ 3 children. ?
b.)  LL regularly rents 1BRs to 2 adults & 2BRs to 2 adults + 2 children. If he won’t rent 1BR to 1 adult +1 child or 2 BR to 1 adult + 3 children, this was deemed FHA violation.
        c.)    LL won’t rent to heterosexual couple b/c they’re unmarried. Wouldn’t violate FHA
d.)   LL won’t rent to gay couple. Sexual Orientation not covered by FHA- no violation
e.)    LL harasses female T. Unless LL would sexually harass men too, would violate FHA.
2.     Problem 3: Discrimination based on handicap:   
a.)  LL won’t rent to gay couple b/c afraid of AIDS. Crt found violation b/c AIDS is handicap
b.)   FHA requires reasonable accommodation for both physically & mentally handicapped, but if T poses threat to others/prop, no violation. 
c.)    LL’s refusal to reasonably accommodate dog schizoid was dependant on was a violation.  
3.     Problem 4: State & Local Legislation
a.)  LL refused to rent to unmarried couple based on L’s religious beliefs. While 9th circuit ruled in LL’s favor on constitutional grounds, most crts hold this to be a violation.
b.)  LL refused to rent to lawyer. This would be OK under FHA b/c jobs aren’t covered.  
4:    Problem 5: Bad Words
a.)   LL’s ad said “Wanted- Female Roommate.” Although this would violate ad provision of FHA, some courts have held you can’t ban an ad if the transaction is legal.
IV.       Delivery of Possession
A. Default Rules for Holdover Responsibility
1.   English Rule (RS/Majority): There’s an implied covenant requiring LL to put T into both legal & actual possession. All of T’s remedies are against LL.
a.) T can (i) terminate lease & recover damages vs. LL or (ii) affirm lease, not pay rent for time he was kept out of possession & recover damages vs. LL.
2.   American Rule: LL not required to put T into actual possession, but is required only to put him in legal possession. All of T’s remedies are against holdover T.
a.) T can (i) sue to evict holdover & recover damages or (ii) extend holdover’s lease into next applicable term. [American rule adopted in Hannan v. Dusch (pg. 478)] 
3.   If trespasser enters prop after T already moved in, LL not responsible for ejectment
B.    Problems (pg. 482)
1.     T leases land that has no public access
a.)   In English rule jurisdiction, LL violated obligation to make premises actually available.
2.     T possesses prop but learns mid-lease he wasn’t in legal possession.
a.)   Both English & American rules require LL to make premises legally available. But, b/c his possession wasn’t interfered with, T still obligated to pay for the time he was in possession. T could terminate lease & have no furtherobligation to L.
3.     T leases building from L under lease containing clause excusing L from liability for failure to deliver by X date if still under construction. When X passes w/out delivery, what result?
a.)   Result depends on how jurisdiction interprets clause as to whether T can rescind. Some jurisdictions say L only has reasonable amount of time to deliver.
V. Subleases & Assignments
      A. Introduction
1.   Unless otherwise s

i) LL must make a peaceable reentry. Otherwise, eviction is wrongful.
a.)   Here, eviction was wrongful b/c despite T’s breach, LL didn’t reenter peaceably. While no violent reentry, that was only b/c T wasn’t there when locks changed.
b.)   Declining # of states still following CL have strict requirements for “peaceable”
c.)    Crt adopts strict eviction rule: Self-help is never available to LL. LL must now use the following judicial proceedings for removal of tenants in possession.
1.)   Unlawful Detainer Statutes & Summary Proceedings (3-10 day process to evict T)
2.)   Temporary Restraining Order. Can be obtained much quicker.
2.     Notes, pg. 506
a.)   While Berg seems to apply to both commercial & residential leases, some jurisdictions only prohibit self help for residential leases.
b.)   Jurisdictions split whether LL & T can K out self-help remedies. RS disallows.
3.     Summary Eviction Proceedings
a.)   While Berg disallowed self help partly b/c of quick judicial remedy, actual experience shows that’s not the case (DC).  As a result, rents have increased.
B.   The Tenant who has Abandoned Premises
1.     While CL (prop conveyance) said LL had no duty to mitigate damages when T abandoned, modern trend (K law) typically forces breaching party to mitigate.
2.     Sommer v. Kridel (pg. 509)
a.)   F: After signing lease, T broke it. LL let apt. stay open for 1.5 years w/out trying to re-let. LL rented all similar units w/out reletting this one to get double income.
b.)   A LL has a burden of proving he made reasonable efforts to mitigate.
1.)   LL doesn’t have to accept substitute T if he’s insolvent or it would be otherwise commercially unreasonable for LL to accept him.
3.     Hypo: LL has many empty units at a given time. Does he have to fill abandoned unit 1st?
a.)   RS says LL doesn’t have to mitigate b/c T’sabandonment invites vandalism & law shouldn’t encourage such conduct. But, shouldn’t LL be required to fill unit ASAP?
4.   If T abandons premises, LL can:
a.) Accept Offer of Surrender: T’s offer to end a tenancy.
1.) Termination: Surrender terminates lease provided that LL accepts T’s offer.
2.) Back Rent + Damages: If surrender effected, extinguishes T’s liability for future rent but not for accrued rent or past breaches of other covenants.
3.) Anticipatory Breach: Some jurisdictions statutorily provide that LL may recover the PV of unpaid future rent less amount by which he can mitigate.
b.) Rent Space on T’s Account: LL doesn’t terminate but assists T in meeting his remaining financial obligation. (Only in CL no mitigation jurisdictions).
1.) Hypo: Lease rent = $500; Market Rent = $450; Actual Mitigation = $300. T must only cover difference b/t Market & Lease Rent ($50).
2.) Hypo: If actual mitigation = $600, cases mixed whether T gets extra rent.
c.) Do Nothing & Sue for Rent under Lease (Only in CL jurisdictions) 
5.   Security Deposits
a.) If LL in security deposit jurisdiction, LL must keep that $ separate from other funds & should give back to T upon end of lease term minus damage to premises.
b.) GA § 43-7-31: Security deposit procedure: A LL of complex w/ > 10 units (or 3rd party manager) must (i) provide list of damages upon move in/out; (ii) written statement of reasons for holding $; (iii) have separate escrow or bond for $
c.) If LL tries to keep deposit w/out cause, T can get 3X damages + attorney’s fees.
VI. LL’s Duties, Rights & Remedies (Regarding Condition of Leased Premises)
A. Covenant of Quiet Enjoyment & Constructive Eviction
1.   Common Law Approach: Caveat Lessee
a.) Most covenants were independent (each party had to fulfill their covenants irrespective of other party). Breach merely gave rise to an action for damages.
b.)        Covenant to pay rent was dependant on Covenant of Quiet Enjoyment