Aiello – Property II – Fall, 2014
Outline – Property 2
Week 1 – Property 2 Briefs and Notes
Chapter 6 – Part A – “Leasehold Estates”
Leasehold (tenancies) à nonfreehold estates – 3 main leasehold are: (1) the term of years, (2) the periodic tenancy, and (3) the tenancy at will.
Term of Years:
· Definition: 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. à must be certain ending date but can have a conditional.
o Example: O to A until Jan 1, 1950 or until the war ends. Example: O to A from May 1, 2014 until August, 1 2014. à term of years!
· Keys:
o Once the term is created it becomes possessory.
o No Notice Required à ends automatically.
o Can be terminable earlier than the fixed date upon the happening of some event or condition.
o Must have a fixed end date that can be determined.
§ Example: Term can be a day, month, year, 10 years, 3,000 years. But can be limited to a number of years by state statute.
Periodic Tenancy:
· Definition: a lease period of some fixed duration that continues for succeeding periods until either the landlord or tenant gives notice of termination.
o Example: “to A from month to month.” or “to B from year to year.” If notice is not given then the period is automatically extended for another period. à must be actual notice.
· Note: These types of leaseholds are often created by implication.
· Rule: If period is not specified:
· Period will generally be rent payment.
· If rent is reserved for payment – may find a term of years.
Rules for Notice of Termination:
· Year to Year à at least 6 months notice is required
· Less than a year to year: Must be at least equal to the length of the period, not to exceed 6 months.
o Example: 1 month notice for a “month to month.”
· Notice must terminate on final day of the period!!
o Example: January 1 – O to “A” for Month to month à March 20 – tenant gives notice to terminate. Earliest termination date would be April 30 (not April 20).
· Death: death of landlord or tenant has no effect on the duration of a term of years or a periodic tenancy, but does on a tenancy at will.
Tenancy at Will:
· Definition: a tenancy of no fixed period that endures so long as both landlord and tenant desire.
· Rule: If the lease provides that it can be terminated by one party, it is necessarily at the will of the other as well if a tenancy at will has been created.
· Ending: tenancy at will usually ends when one party cancels or terminates – usually must be given notice by statute. à also – death.
· Notice: Common Law = no notice required / statutory usually 30 days or renti interval required
· *If there is ambiguity, then a traditional law will put it in a tenancy at will.
Garner v. Gerrish
Ct App NY 1984
· Facts: Robert Donovan decided to lease a house to Gerrish. The lease basically allowed Gerrish to stay there as long as he wants as long as he continues to pay the rent. The lease also provided that Gerrish could terminate the lease at his choosing. Gerrish lived there for about 4 years, and made all the payments. Donovan died, and the executor wanted to terminate the lease and evict Gerrish. Gerrish refused, and Garner sued. Garner won in both trial and appeals court. Both courts held that if a lease allows one to terminate at will, then it automatically allows the other to terminate at will, and is therefore construed as a tenancy at will, which automatically is terminated when either the lessor or lessee dies.
· Issue: Did the Donovan – Gerrish lease create a life estate in the property for Gerrish with a determinable tenancy or a tenancy at will.
· Rule: Restatements à There is no longer any reason why a lease granting the tenant alone the right to terminate at will should be converted into a tenancy at will terminable by either party, instead this type of lease creates a determinable life estate in the tenant, which is terminable at the tenant’s death or the tenant’s will.
· Analysis: Here, the lease specifically allows the tenant to terminate at his will or it will terminate automatically at the tenant’s death. To allow the lessor terminate at will would frustrate the intent of the contracting parties. In addition, a tenancy at will by definition is one that is not fixed or determinable but is at the will of the lessor and lessee. Here, this lease is determinable because it will terminate at the death of the lessee, or at some earlier time as decided by the tenant; therefore the lease is not indeterminate.
· Conclusion: reversed, and held that the contract created a determinable life estate in the tenant. Gerrish gets to reside in the house until he dies, he stops paying, or he decides to terminate.
Tenancy at Sufferance: Holdovers
· Definition: arises when a tenant remains in possession (holds-over) after termination of the tenancy.
· Common Law Rules: (1) landlord can evict the tenant; (2) consent (express or implied) to the creation of a new tenancy.
Holdovers can go in 2 directions:
1) treated as a periodic tenancy à period = the rent period.
a. More equitable result for policy purposes.
2) Term of years = the original terms of the K but not to exceed 1 year.
a. Probably because of statute of frauds.
· Notice: Same as period tenancy.
· Policy: usually holdover statutes favor the tenants because the landlord get to collect rent from the tenant, and is thus not injured as much as evicting a tenant.
Hypo 1-1: L to T for 3 years. Annual rent = $12K – payable in $1K monthly installments. T holds over and sends in rent
he tenant from obtainin actual possession of the premises in question.
· Majority Rule: The English Rule allows an implied covenant of possession into all leases on the first day of the lease, and therefore the landlord can be held responsible for an illegal holdover. à New lessee can sue the landlord for an unlawful holdover.
· Analysis: The English Rule allows an implied covenant of possession into all leases on the first day of the lease, and therefore the landlord can be held responsible for an illegal holdover. However, the court reasons that the American Rule is a good rule because it is not the fault of the landlord that a person is illegally residing on the premises, and there is no way for the landlord to know one will commit an illegal act. Furthermore, to hold the landlord responsible for the holdover’s actions would essentially make the landlord legally responsible for the illegal acts of another person over which he has no control. The court reasons that the English Rule is unfair against landlords. The new lessee has legal rights to possess the land, and he/she can invoke those rights in a suit against the person who is preventing the assertion of such legal rights. Therefore, the new lessee can sue the old lessee – the actual wrongdoer – in order to get possession – not the landlord who is innocent in this situation.
· Conclusion: Affirmed. Landlord is not responsible for illegal holdovers. Lessee must sue the holdover in order to take possession.
Week 2 –
Subleases:
Sublessor grants to the sublessee less of an interest then the original tenant.
No privity of contract or privity of estate between the landlord/lessor.
If true sublease, then landlord cannot sue sublessor for lack of payment, landlord must sue the original lessee.
Privity of Contract
Privity of Estate
· A theory of liability against tenant for covenants that run with the land
· Relevenat covenants:
· Duty to pay rent
· Duty not to pay rent.
Assingment v. Assumption
· Rights are assigned
· Liabilities are assumed.
Example: Prof assigns you his salary, but you have not assumed the obligation to come in and teach law.
Assingment: Assignor grants her entire interest to assignee.
Week 2 Property Briefs and Notes:
Subleases and Assignments:
