Property II – Petersen – Spring 2011
I. The Leasehold Estates
a. Term-of-years
i. An estate that lasts for a period that is
1. Fixed; or
2. Set by a formula that sets dates
ii. Could be 1 day, 2 months, 3 years, etc
iii. It can terminate early if some specified thing happens
iv. It states when it will end
v. No notice-of-term is necessary
b. Periodic Tenancy
i. A period-to-period lease continues until L or T gives notice of termination
1. Termination date must be the last day of the period
2. Many states have shortened the notice period for termination
ii. To terminate under common-law, you must give notice
1. Year-to-year lease: 6 months
2. Lease shorter than year-to-year
a. Same as the period
b. But it can’t be longer than 6 months
iii. In many states, if a lease reserves an annual rent, there’s a year-to-year tenancy
1. Periodic Tenancy
2. Requires 6-month or 1-month notice
3. In other states it’s a month-to-month tenancy if rent is paid monthly
a. Requires a 30-day notice
c. Tenancy-at-will
i. A tenancy of indefinite duration—as long as L and T agree
ii. Majority Rule: if only one party can terminate it
1. IF T can terminate the lease it is probably a determinable-life-estate
2. If only L can terminate, its probably a tenancy-at-will of either L or T
a. Inconsistent with the lease terms and the parties’ intent
d. Garner v. Gerrish
i. If a T can terminate a lease at any time is it a determinable-life-tenancy or tenancy-at-will?
ii. Problems in the case:
1. At Common Law, life estates required livery-of-seisin, which didn’t happen in this case
2. At Common Law, granting one party a right to terminate implied the other had the same right, at least to the majority
iii. Holding
1. Courts have abandoned old rules like livery-of-seisin, thus allowing for a life-estate determinable
2. This was probably closest to the parties’ true intent
II. Tenancy at Sufferenace
a. A T who stays after the lease terms ends
i. L may:
1. Evict T and get damages
2. Consent to a new tenancy
b. At Common Law, if T held over and wasn’t evicted
i. Majority View
1. Results in a periodic tenancy
ii. Minority View
1. Results in a term-of-years
c. The term length depends on (max for both is one year)
i. How rent is computed in the original lease OR
ii. The length of the original term/period
d. The original lease’s terms apply unless:
i. The parties otherwise agree
ii. Circumstances dictate otherwise
III. The Lease
a. Conveyance or Contract?
i. A conveyance transfer property rights
1. This is how courts historically treated leases
ii. Now contract-law controls
1. It includes contract principles
a. Duty to mitigate
b. Warranties and etc.
2. Courts interpret leases using contract-law principles
b. Statute of Frauds
i. Leases more than one year must be in writing
ii. If a state doesn’t have SoF, they say it’s a periodic tenancy
c. Form Leases and Bargaining Power
i. Landlords sue form leases
ii. Posner: form leases aren’t they problem, monopoly power is the problem
d. Two meanings for Term
i. Terms of a contract (lease)
ii. Length of a lease
IV. Selection of Tenants: Unlawful Discrimination
a. 3 Key Statutes
i. Federal Fair Housing Act
1. Broad
2. Numerous exemptions
ii. Fourteenth Amendment to U.S. Constitution
1. Guarantees equal protection
iii. 42 USC Section 1983
1. Applies only to race
2. There are no exemptions
b. Fair Housing Act
i. Section 3604 (a)-(b)
1. Discrimination in the sale or rental of housing
2. To refuse to sell or rent after the making of a bona fide offer . . . a dwelling to any person because of race, color, religion, sex, familial status, or national origin
3. To discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling . . . because of race, color, religion, sex, familial status, or national origin
ii. Section 3604 (c)
1. It shall be unlawful too
iii. Only L can evict before new lease begins
iv. Only L can get promises from the prior T
v. T gets less than it bargained for if it has to sue the prior T
V. Subleases and Assignments
a. Three Types of Assignment (Sublease) Provisions in a Lease
i. T may assign the lease. The lease may be silent—have no provision
ii. T may assign the lease—only if L consents
iii. T may assign the lease—only if L consents, but L can’t unreasonably withholds its consent
b. Ernst v. Conditt
i. The Ernsts’ leased land to Rogers and Rogers couldn’t sublet without permission
1. If Rogers did sublet his duties would remain
2. Ernst let Rogers sublet to Conditt and extended the term
3. Rogers stopped paying rent, but kept in possession
ii. Ernst sues for
1. Unpaid rent
2. The cost of removing Rogers’ improvements
iii. Ernst (leases to) Rogers (assign or sublease?) Conditt
iv. Arguments
1. Ernst: Rogers assigned the lease to Conditt so Conditt is directly liable
2. Conditt: he and Rogers had a sublease so Rogers is directly liable
v. Privities
1. Privity of Estate
a. Rogers gets in privity-of-estate with Ernst—he took possession
2. Privity of Contract
a. Rogers gets in privity-of-contract with Ernst—he signed a lease and agreed to pay rent
vi. Holding
1. Conditt is liable—it was an assignment and not a sublet
2. PoE was terminated when Rogers stopped possessing the property
3. PoC continued
vii. Holding 2
1. Sublease-there’s no PoC between Ernst and Conditt
a. Conditt is not liable to pay rent or the cost of removing the improvements
2. Assignment-PoC exists so Conditt is liable
