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Property II
University of Georgia School of Law
Appel, Peter A.

Property Outline – Spring 2009 – Peter Appel
 
Tradition, Tension, and Change in Landlord-Tenant Law
Leasehold Estates
leasehold – right to possession of land by the permission of another; the basic leasehold estates –
term of years – an estate that lasts for some fixed period of time or for a period computable by a formula that results in fixing calendar dates for beginning and ending, once the term is created or becomes possessory; can be less than a year
“to A for 10 years”
no notice required to bring term of years to an end
periodic tenancy – period to period (ie month to month) until notice of termination given
“to A from month-to-month” OR “to A, with rent payable on the 1st day of every month” OR landlord elects to bind holdover tenant for additional term
if notice is not given, the period is automatically extended for another period; the notice must terminate the tenancy on the final day of the period, not in the middle of the tenancy
at common law, ½yr notice required to terminate year-to-year; for different periods, just must give full period of notice
tenancy at will – no stated duration, continues until landlord or tenant desires an end
“to T for and during the pleasure of L” OR “to T for as many years as T desires” (either of these is at the will of either party, even though only one party stated)
if a lease is terminable only at the will of one party, a determinable life tenancy is created (Garner v. Gerrish)
tenancy at sufferance (holdover tenancy) – tenant wrongfully remains in possession after the end of the tenancy
landlord’s options – (1) treat as trespasser and evict; (2) hold him to new term
**main difference between periodic tenancy and tenancy at will – tenancy at will can end at death of one of the parties
if lessee has option of terminating lease when he pleases, determinable life tenancy is created
Garner v. Gerrish – defendant rented land from Donovan (lease pg. 365); when Donovan died, plaintiff (executor of Donovan’s estate) told defendant to leave the premises; defendant refused to leave and plaintiff brought this suit to have defendant ejected
holding – ruled for defendant; court reverses old CL and allows parties to create a determinable life tenancy
old CL rule was that a lease for so long as the lessee shall please is a lease at will of both lessee and lessor
quiet enjoyment – a covenant, implied if not expressly incorporated into a lease, which states that a lessor shall not interfere with the lessee’s ability to enjoy the premises
issue as to whether or not the decision violates numerus clauses (prohibition of new or customized property)
with holdover, once a landlord elects to either hold a tenant over or treat him as a trespasser, he may not change his mind
Crechale & Polles v. Smith – defendant leased land from plaintiff for 5 years; at the end of the lease, defendant asked for an extension on a month-to-month basis; plaintiff said no because he was trying to sell; defendant held over, plaintiff accepted payment for the 1st month over, but didn’t cash 2nd month check because endorsed “final payment”
holding – plaintiff awarded $1750 in back rent payment and $760 for damages
rationale – since landlord elected at first to evict tenant, he could not later attempt to hold him to a new term; with holdover tenant, landlord can either (1) treat him as trespasser and evict, OR (2) holdover for new term, but CANNOT change mind and switch between two options
a few select states have (3) option – charge double rent
what plaintiff’s steps meant – first, told defendant to get out = evicted him; then, cashed the check for 1month rent = accepting as month-to-month tenant
The Lease
considerations for determining whether or not a document is a lease – intention of the parties; number of restrictions on use; exclusivity of possession; degree of control retained by the granting party; presence or absence of incidental services
a lease is both a conveyance and a K
statute of frauds says leases for more than one year MUST be in writing
bargaining power – courts want to make sure there is equal bargaining power between the parties; especially comes up with form leases; decisions vary from jurisdiction to jurisdiction
Housing Discrimination
federal and state statutes now prohibit discrimination on various grounds – including race, religion, or national origin
Shelley v. Kraemer – US SC held state courts could NOT enforce racially restrictive land use agreements entered into by neighbors
42 U.S.C.A. § 1982 – Civil Rights Act of 1866 – all citizens of US shall have same right, in every state and territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property
only bars discrimination based on race or ethnicity
applies to sale or rental of all property (whereas FHA applies only to housing)
typical remedies – injunction against landlord/seller or damages
Fair Housing Act – makes it unlawful to refuse to sell or rent a dwelling to any person because of race, color, sex, religion, or national origin
exemptions from FHA – private clubs, religious organizations, qualifying owner of 1 to 3 single-family dwellings or with 4 or fewer units, qualifying senior citizen housing
§3604 – can’t discriminate because of race, color, religion, sex, familial status, or national origin
exception – §3603(b)(2) – nothing in 3604 applies if rooms or units in dwellings containing living quarters occupied or intended to be occupied by no more than 4 families living independently of each other, if owner actually maintains and occupies one of such living quarters as his residence
exception to the exception – §3604(c) – make, print, publish, or cause to be made, printed or published, any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status or national origin, or an intention to make any such preference, limitation, or discrimination
legislative rationale – can’t control what people think, but can control what they advertise
**note – if Mrs. Murphy (or any other) didn’t take out an advertisement, but discriminated based on race, she would violate §1982 (which bars all racial discrimination), but would be fine under Fair Housing Act
Mrs. Murphy exception – person is exempt if she is offering to lease a room or an apartment in her building of 4 units or less, 1 unit of which she occupies, and she does not advertise in a discriminatory manner
discrimination based on familial status – existence of children under age 18 in the family unit
FHA prohibits discrimination on basis of “familial status; whether restrictions limiting the number of occupants/bedroom discriminate is subject of much litigation
exemption – retirement communities are okay – under §3607
discrimination based on handicaps – §3604(f)
handicap – physical or mental impairment that interferes with life’s functions
regarding someone as having a handicap and therefore discriminating against them is considered discrimination even if the person doesn’t actually have a handicap
however, dwellings need not be made available to people whose condition would create a direct threat to the health and safety of others or result in substantial damage to property, but landlords must try to make reasonable accommodations (from Roe v. Boulder)
reasonable accommodations – FHA says it is discrimination for a landlord not to provide reasonable accommodations to afford a handicapped equal opportunity to use and enjoy a dwelling (ie a “no pet” apartment may be required to allow seeing-eye dogs)
examples of unacceptable words to place in housing advertisements – able-bodied, bachelor, near churches, couples only, empty nesters, exclusive, executive, responsible, no smokers (it is a disability if someone is addicted to smoking, however can say “no smoking”)
Delivery of Possession
physical possession v. legal possession –
physical possession – who is actually on the land
legal possession – who has title
English Rule – require that a landlord deliver actual possession (RST 6.2 adopts English)
rationale: tenant contracts for possession and not for a lawsuit to evict a holdover; landlord is in a better position to assess whether current tenant will holdover; landlord is financially benefiting from the transactions; actual intent of parties
even when jurisdiction follows English Rule, parties can K out the risks
American Rule – require only that a landlord deliver the legal right to possession
rationale: unfair to hold the landlord liable for the wrong of another; up to tenant to take possession of property if he wants it; tenant has right to evict holdover, therefore no reason to get the landlord involved
Hannan v. Dusch – defendant leased R/E to plaintiff for 15 years; defendant was to make land suitable for plaintiff (by ousting current occupier) but refused to do so; there was no covenant stating who bore the risk (if there was, covenant would prevail)
holding – ruled for defendant; landlord need not place a tenant in possession, the landlord need only give a right of possession
new tenant v. old tenant – can bring action of ejectment because has legal title
once tenant takes actual possession, he is assumed to have accepted the landlord’s title as adequate for his use of the property; tenant has no rights unless actual interference with his enjoyment
Subleases and Assignments
sublea

le efforts to relet an apartment wrongfully vacated by tenant (and landlord has to prove that he attempted to mitigate)
landlord’s remedies and security devices –
failure to pay rent – landlord can sue for back rent and damages caused by breach if tenant is in possession; may also terminate lease and recover possession
security deposits – protect landlord in event of default or damages; landlord supposed to return deposition minus compensation for damages
Duties, Rights, and Remedies
dealing specifically with facts that landlords lack incentives to do everyday repairs and tenants lack incentive to maintain property (especially towards the end of the term)
at CL – unless there was a clause stating otherwise, tenant took premises “as is”
a tenant may vacate premises and terminate the lease if his quiet enjoyment is interfered with by the landlord
Reste Realty v. Cooper – defendant leased office space from Donigian for 5 years; each time it rained, H2O would flood defendant’s area; Donigian said he would see to it that H2O was removed, but he passed away and for 9 months no one would answer defendant’s complaint; defendant left on 12/30/61; plaintiff acquired building 1/19/61 and brought this action for back rent on 11/9/64
holding – judgment for defendant because was constructively evicted
another option for defendant – stay and sue plaintiff for rent for those months
constructive eviction – tenant can say “it is as if you have evicted me by having such poor conditions on your property and therefore I’m leaving”; substantial interference with use and enjoyment of premises
big risk taken by tenant – if court finds premises are not bad enough for constructive eviction, tenant will still be liable for rent
actual/partial eviction v. constructive eviction –
with actual eviction – tenant can remain in possession of the rest of the premises and refuse to pay rent
total actual eviction – physical expulsion from possession of entire premises(partial actual eviction is expulsion from part of premises)
with constructive eviction – if the tenant wants to stop paying rent, he must abandon the premises and terminate the tenancy
quiet enjoyment – doctrine which asserts that a tenant is entitled to possession free of interference from the landlord; implied in lease
general rule – landlord isn’t responsible for acts of others, unless he is somehow able to control it
implied warranty of habitability – safe, clean, and fit for human habitation
advantages to tenant for suing under implied warranty of habitability rather than just suing for damages – covers all latent (hidden) and patent (apparent) defects; can’t be waived like quiet enjoyment can; punitive damages are allowed
typically does NOT apply to commercial leases
Hilder v. St. Peter – plaintiff rented apartment from defendant; plaintiff paid all her monthly rental payments on time; plaintiff’s apartment had many defects that defendant promised to fix, but never did
holding – ruled for plaintiff; implied covenant of habitability in every lease
however, tenants must give notice to landlord and give landlord reasonable amount of time for correction (VT says 30 days)
tenant’s remedies for breach of I.W.O.H. – terminate lease and recover damages (difference between rent and cost of substitute premises); continue lease and recover damages (rent reduction, difference between rent and FMV); continue lease and use rent to repair; continue lease and withhold rent (place rent in escrow until default is eliminated); use as defense against landlord’s action for rent
illegal lease – if premises were uninhabitable when the lease was signed, lease is unenforceable
disadvantages – doesn’t address what happens when conditions get bad over time; lease is void, but lease is what gives tenant a right to be there