CHAPTER 6 – LANDLORD-TENANT LAW
1. Landlord & Tenants
A. Note:
1. If LL retains right to possession at the end of lease, FI = reversion.
2. If provision made for 3rd party to take possession, FI = remainder.
B. Term of Years –
1. Length – Fixed or computable period of time w/ beginning & ending dates.
a. Term must be fixed but can end earlier upon happening of some condition.
b. May be less than a year.
c. Computable – Agricultural lease implies term of years b/c full year req’d for cycle
d. Limits
a. CL – no limit on # of yrs permitted.
b. But now, some states limit.
2. Notice – Termination date stated from outset so no notice reqd.
3. Language – “For ten yrs from the date of this lease” “For one year from next Xmas”
a. Terms of Yrs Determinable – “for 10 yrs so long as used for a sawmill”
4. Special Case: tenancy of no fixed period terminable on some event: “for the duration of the war.”
a. Term of yrs is closest b/c can’t be terminated unilaterally.
b. But could also be periodic tenancy, tenancy at will, or if in control of T, a LE determinable.
c. SO don’t try to classify, just enforce how its written.
5. Term of yrs and periodic tenancy can be made determinable..
C. Periodic Tenancy –
1. Length – Period to period for succeeding periods until notice given.
a. NOTE: can be year-to-year like term of years but periodic has NO ENDING DATE.
2. Notice – Notice must terminate tenancy on the final day of the period.
a. How Much Notice Req’d:
a. CL:
i. ≥1 yr = 6 months notice
ii. 6 months
b. Today – Many states have shortened time and permitted month-to-month tenancy to be terminated at any time following 30 days notice.
b. Effect of No Notice – If notice not given, period automatically extended for another period and BOTH are bound for another period.
c. Ineffective Notice: Notice that doesn’t give LL the full period of notice
a. Some cts -No Effect. Doesn’t even terminate the periodic tenancy at the end of the following period.
b. RS & rest of cts – Treat the notice as effective on the earliest date it COULD be effective.
3. Language – “to A from month to month” “to B from year to year”
a. Implied “at an annual rental of $24K payable $2K per month of the first of the month.”
a. CL & majority = estate is from year to year, with rent paid in monthly installments.
b. This matters b/c if year-to-year, 6 mos notice req.
c. At end of yr, would auto-renew for month-to-month.
b. Period Tenancy Determinable – from month to month so long as used for a sawmill”
D. Tenancy at Will – No stated duration & either party can terminate.
1. Notice – Continues until either LL or T gives notice.
a. CL = stops when one party terminates it.
b. Today = CL subject to statutory limitations in certain jurisdictions which might require 30 days or time equal to interval btw rent payments.
2. Presumption – No fixed period & either party can terminate.
a. BUT periodic payment of rent converts it to periodic tenancy by implication.
3. CL = If tenancy at will has been created, its necessarily at will of each party.
a. Unilateral power of termination can be Ked into trm of yrs or periodic => This is called a determinable tenancy (terminable at T’s will or on his death).
a. “to T from yr to yr. T has right to terminate at anytime.” While T can terminate at any time, L can only terminate according to law of periodic tenancies.
b. “to T for one year, with proviso that L can terminate at any time.” While T can terminate at any time, L can only terminate according to law of term of yrs.
b. Unilateral power of termination but with no fixed duration:
a. CL = Tenancy at will, w/ implied power of termination in the other party (destroy unilateral power).
b. RS = “for as long as T desires to stay on the land” = LE determ terminable at T’s will or on his death.
4. Termination: Can’t be assigned. Terminates
5. Garner v. Gerrish – Lease states “Lou has privilege of termination of this agrmt at date of his own choice.”
a. 2 ways to construe lease:
a. Life Estate Determinable – terminable at will of tenant. (event that terminates is based on T’s will)
b. Tenancy at will
i. Lower ct construed as month-to-month since he paid monthly rent & could terminate whenever he wanted.
b. LL died so:
a. If life tenancy, tenant wins/keeps possession.
b. If tenancy at will, then executor wins b/c landowner died so can no longer have will to use the land.
c. Ct rejects CL rule that terminable by one party means terminable by both parties.
d. Ct adopts RS rule that lease can grant one party power of termination but not the other. Allows determinable LE.
a. Lease which clearly & unambiguously terminate at the will of only one party are to be controlled by their express terms. But ambiguous leases are subject to a rebuttable presumption that they’re at the will of both.
b. But practical PROBLEM = There are various obligations that landlord owes tenant but if life estate (freehold in T) then holder of reversion (LL) wouldn’t have obligations that landlord normally does.
· SO here, LL would have no incentive to fix problems or pay taxes.
NOTE: with determinable LE:
· If L can’t terminate, duty = keep building standing forever.
· If T can’t terminate, duty = pay rent forever.
· RS says this is okay UNLESS unconscionable.
Tenancy at Sufferance (Holdover) – T remains after end of tenancy.
Effect: Cts Split
Majority – Periodic tenancy.
Minority – Term of yrs.
Length of extension: two methods but max length is 1 yr.
Way rent is computed in orig lease (annual basis, even if payable monthly, makes yr-to- yr.)
Length of the original term
Exceptions:
Leaving office equip behind = no holdover. b/c didn’t interfere with LL’s use of premises.
Not moving b/c dr said not to move ill son = no holdover, b/c T didn’t stay voluntarily.
Legislation to deal with holdovers:
Specify length of new term
Convert holdover into tenancy at will & say T liable for reasonable value (even if less than rent agreed upon in orig lease)
Allow for double rent. (Like Miss in Chrechale, which held it the exclusive remedy as far as money damages.)
CL: LL options for holdover T:
Treat as trespasser – Sue for eviction & damages (fair rental value plus any special damages. Amt in lease is usually fair rental value.)
· Incoming tenant can ALSO sue for eviction & damages. RS extends that so incoming T can hold a holdover tenant to a new tenancy.
Treat as new tenancy -. The amt of extension would be the original term but limited to a year. Terms stay the same.
i. After electing not to accept lease extension, LL can’t, after failing to evict, then hold T for new term.
ii. BUT even after expressly refusing to extend the lease, LL’s acceptance of rent check for month beyond period amts to extension of the lease for the period of time for which the check was accepted.
iii. Crechale v. Polles – Smith alleged there was oral agrmt that Crechale said “oh go ahead” to extend the lease. Ct held that SOF would allow oral extension of lease.
Term of Years
Periodic Tenancy
Tenancy at Will
Tenancy at Sufferance
Language
To A for 10 yrs
To a for month to month. Or
To A with rent payable on the first day of every month.
To T for and during the pleasure of L. Or To T for as many years as T desires.
Duration
Fixed period with calendar dates
Period-period until notice given
None stated. Continues until either party terminates.
T remains after end of tenancy
Notice
Not req’d b/c termination date stated at outset
≥1 yr = 6 mos
6 mos
CL = non req’d
Modern = 30 days or 1 period
Terminate
End of period or earlier upon happening of some condition.
Upon notice
CL = both parties have right to terminate
Modern = Recognizes a term of yrs determinable with unilateral power to terminate. Also, lease terminated if L assigns.
Eviction (by L or incoming T) or consent to new tenancy
Effect of Death
None
None
Ends tenancy
Ends tenancy
Presumed where:
No fixed termination date but periodic rent due at first of month.
No fixed duration & no periodic rent
2. Lease v. License v. Life Estate
A. Duties:
1. Contractual license = have rights but no duties.
2. Lease = establishes the LL-T relation.
B. Factors for lease interp: American Law of Property
1. Intention of parties
2. # of restrictions on use
3. Exclusivity of possession
4. Degree of control retained by granting party
5. Presence/absence of incidental services
C. Conveyance v. Contract: classically saw lease as conveyances of land that creates property rights but it also contains covenants so modern law looks it more as K law.
1. License = permission to be somewhere where you wouldn’t normally be allowed to be.
2. Unlike a deed which coveys seller’s interests forever, a lease implies a continuing relationship btw LL & T.
D. Statute of Frauds – Leases for more than one yr must be in writing.
1. Majority: P
so.
c. T remedies:
a. Terminate lease & sue for damages.
b. Affirm lease, refuse rent for portion he was excluded from, & sue for damages
· Damages = cost of renting other premises in excess of rent in lease, costs of ousting holdover T, loss of anticipated business profits (that LL could’ve foreseen)
2. American Rule – Unless contracted otherwise, LL has no duty to deliver actual possession; only legal possession so T has all rights needed to obtain possession.
a. Rationale:
· Lease conveys leasehold to T so LL has not business interfering.
· T can evict by summary proceedings.
· LL shouldn’t be liable for tortuous acts of another.
b. Remedies against Holdover T: New T can’t sue LL.
· New T has same rights LL would have.
i. Sue to evict/recover damages.
ii. Treat as T for another term.
3. Under either rule, LL only responsible for giving possession on first day. After that, T’s responsible for trespassers.
4. Even if L violates by leasing to another, as long as T continues to use/possess the prop, he’s liable to T for rent.
5. Delayed Possession: Clause in lease excuses L for liability for not giving possession in prop still under construction. Cases looked at in 3 diff ways:
a. Hartwig: even with exculpatory clause, L still has to deliver in rzble time. Not excused forever.
b. Fox Paper: enforced the clause in favor of L. But the provision drafted by T’s attny.
c. Seabrook: Long lease with the provision not highlighted so ct found it to be unconscionable.
5. Subleases & Assignments
A. Privity of Estate – Makes orig party & assignee liable to each other for covenants in the orig lease that runs with the land. Creates L-T relation.
1. Only 1 T and L can be in Privity of E at once.
2. Paying rent and keeping property in good repairs are covenants that run with the land.
B. Privity of K – parties have agreed with each other & their obligations binds them whether or not they’re in privity of estate (unless released).
1. Orig party can sue assignor (privity of K) and assignee (privity of estate).
a. But if L collects from T based on privity of K, T can sue T1 since T1 has the benefit of possession.
2. Unlimited # of people can be in privity of K.
3. No privity of K btw assignee & orig party UNLESS there’s a new agreement as part of the transfer.
4. 3rd party beneficiary theory: where one party enters into K for benefit of a 3rd party, the 3rd party can enforce the K as well as the actual contracting party.
a. EX: T assigns to T1 & makes K that T1 was going to perform all covenants of orig lease (to benefit L). So L could enforce the K.
C. HYPO: L leases to T with covenants to pay rent & keep prop in good repair. T then assign entire interest to T1 who agrees to assume all covenants. T1 assigns to T2 who says nothing about covenants. T2 assignes to T3. T3 defaults on rent & fails to keep in good repair.
1. Liable to L?
a. T = yes. Privity of K.
· If L sues, T could recover from T1? Yes, since they contracted that T1 would fulfill covenants.
b. T1 = maybe. Privity of K if juris allows 3rd party beneficiary.
· NO?
c. T2 = No. There WAS privity of E after T1 assigned to T2 and before T2 assigned to T3 but not at time of breach.
d. T3 = Yes. Privity of E.
· NO?
e. Subrogation – Since T is in K with L, he acquires his rights to sue.
Assignment
By L
Assignment
By T
Sublease
By T
Consent
Not req
Maybe req by lease
Maybe req by lease
Privity
Of E
Assignee & T = Yes
Aee & L = Yes
T1 & L = No.
T & L = Yes.
Privity
Of K
Aee & T = NO.
Orig L & T = Yes.
Aee & L = No.
T & L = Yes
T1 & L = No.
T & L = Yes.
