Property I Outline

PROPERTY OUTLINE

Prof. Whitman – Winter 2011

University of Missouri

LANDLORD-TENANT

Land-holding terminology:

– Lease: Express or implied K giving tenant possessory rights subordinate to the landlord.

– License: Licensor grants to licensee the privilege of going on to land for specific purpose w/out passing estate in the land

o Permission to use/occupy land w/out having any interest in the land

I. Nature and Creation of Leaseholds

a. Leaseholds Distinguished from other Relationships

i. Right of Possession = Leasehold Estates

ii. Right of Use = Non-Leasehold Estates

1. Licenses and Easements

a. Roadways and utility lines over another’s land

2. Profits a Prendre

a. Rights to remove a substance (sand, minerals) from another’s land

b. “Lodgers”

i. Transients in hotels

ii. Some rooming house occupants

iii. Special Legal Categories of Possession – Other relationships easily confused w/leaseholds (not officially “estates”)

1. Mortgagee in possession

a. Holder of a mortgage on land who, under certain circumstances, is allowed to go into and to remain in possession of the mortgaged land

i. Borrower abandons the property; OR

ii. Turns it over to a lender

2. Contract purchaser in possession

a. Under long-term installment K

i. Purchaser under an installment sale K who is still paying on the purchase price

b. Has not received title to deed, but is allowed to hold possession while performing the K

b. Leases are both conveyances and contracts

i. Leasehold Estate: Landlord à Tenant — CONVEYANCE

ii. Covenant: Landlord ßà Tenant — CONTRACT

1. def: Promises made both ways

c. Types of leasehold (non-freehold) estates

i. Fixed Term

1. a.k.a. “Term of Years”, “Estate for Years”

2. ex.”To T until April 30, 1997, w/rent of $80 per month, payable in advance.”

ii. Periodic

1. “To T for a rent of $800 per month, payable in advance.” — Month-to-Month

a. No specific term or ending date are mentioned

b. Look at way rent is being paid to determine period can end

2. Could add “as tenancy at will” to make one, but VERY rare

a. Whitman has never seen one, but is possible

3. Common law rule for terminating a periodic lease:

[some states that have statute that overrides]

a. Periodic lease must be made to terminate on the last day of the regular lease period

b. Notice must be given at lease a full period in advance

i. For a ‘year-to-year’ or longer, only need 6 months notice

1. By either party

4. Periodic Termination Example (Ex: Month-to-Month)

a. Lease month coincides w/calendar month

i. Doesn’t have to coincide w/calendar month

b. On Jan 1: lease begins

c. On Feb 15: notice to terminate

i. By either party

1. Doesn’t matter which, rules same

d. Lease terminates: March 30

5. Rent Increases

a. In periodic lease, landlord can increase rent at any time and goes into effect under the same rules as termination

i. Landlord effectively terminating old lease and proposing new lease that tenant does or does not accept

iii. At Will

1. Holds possession at the will of the landlord without a fixed term

a. Nothing is said about paying rent or terms of end

b. No way for court to say there was a time where either party could terminate at a specified time

c. Usually no rent being paid.

2. Friend (P) v. Gem Intl, Inc. (D)

a. Facts: P was furniture co. that operated on 1st floor of Ds dept. store; P slip and fall on steps; D claimed licensee, not tenant

b. Held: Tenant at will (owed ordinary standard of care)

i. Court found as lease even though stores called agreement license

1. Had possessory rights

a. Definite and specific area occupied

iv. At Sufferance

1. Estate has expired, but T has not moved out

2. David Properties (P) v. Selk (D)

a. Facts: D stayed on property after lease expired; P sent letter of terms of rent if D stays on land; D never agrees, but stays on land

b. Held: If the landlord notifies the tenant at sufferance of the rent, the holdover tenant is liable

i. Even if he doesn’t expressly agree

ii. Silence = Implied consent

c. Ls options

i. Demand T to leave

1. If doesn’t à Trespasser

a. Eviction

b. Damages

ii. New Lease w/T

Leasehold Estates:

II. Duties Respecting Fitness and Repair of Leased Premises

a. Implied Covenant of Quiet Enjoyment

i. Generally

1. Applies to EVERY lease (Express or Implied)

a. Residential or Commercial

2. L has title or the right to lease the premises

3. Premise will be free of prior tenants

a. If someone on land after move in, T’s responsibility

b. Also T’s responsibility for damages after move in

i. ex. Broken window

4. L will not deprive T of any of physical possession during lease

a. Actual Eviction

i. Restricted from all property

ii. Only Landlord can evict

1. NOT Sheriff

b. Partial Actual Eviction

i. Majority: If tenant is restricted only partially and continues to occupy the remainder, tenant does not have to pay any of the rent

1. Until get rest of space left

2. “Rent is not apportionable to space”

ii. Minority: Court may say only if space restricted is substantial

1. BUT likely to follow old common law rule

a. Regardless of amount of space T deprived of

iii. Ts Other remedies

1. Lease terminated

2. Injunction

3. Damages

Constructive Eviction v. Partial Actual Eviction

ii. Constructive Eviction

1. Generally

a. Landlord’s wrongful acts substantially and materially deprive the tenant of the beneficial use and enjoyment of the premises

i. Conditions make it difficult or impossible for T to use

2. Elements

a. Wrongful act by L or failure to act

i. Interfere w/Ts possession

1. ex. Keep elevator working

AND

b. Very bad conditions

i. Substantial Interference

AND

c. T must vacate the premises

i. To show conditions are really that bad to make occupation intolerable

1. To look like ‘actual eviction’

ii. Barash (P) v. PA Terminal (D)

1. Facts: Office building not ventilated during non-business hours as per oral agreement

2. Held: Not actual eviction b/c T stayed on the premises

a. T must leave premises to claim constructive eviction

3. Not partial actual eviction

a. L did not oust T from property

iii. Problem

1. If move out and into another place and courts say not constructive eviction, T pays 2 rents

2. Can instead get declaratory J to see if would qualify for constructive eviction before moving out (and risking paying double rent)

a. But court delay makes this an unlikely scenario

3. Remedies

a. Lease termination

i. No further rent liability after move out

b. Damage