Leaseholds: Landlord and Tenant

lease

a present possessory non-freehold estate

Tenant has ___________ right

present possessory (tenant has general right to exclude, even the owner)

landlord has _______ right

reversion

A lease is both a property _____ & a contract ___

conveyance; right

leases are subject to ______ ___ *_______* (if more than one year, must be in writing)

statute of frauds

form leases

typically take it or leave it documents, w/ no negotiation terms (can create unequal bargaining power)

Term of years

an estate that lasts for a fixed period of time. NO NOTICE required to terminate

* ex: lease starts on June 30, 2016 and ends on June 30, 2017
* Fixed start and end date

Periodic tenancy

A lease for a fixed period that continues for succeeding periods until landlord or tenant gives notice of termination

• ex: “month to month”, “day to day”, “year to year”

• If notice is not given, period is automatically extended for another period

• Must give notice that you’re leaving by the first day of the period

• Under CL, 6-month notice required (LL needed notice to who was taking over field or else it would lay fallow)

• Now, generally 1-month notice (must be effective notice)

Tenancy **at will**

Tenancy of no fixed period that endures so long as both landlord and tenant desire (Garner v. Gerrish)

is notice required to terminate for tenancy at will?

no notice is required to terminate (ex: living with your parents)

• Modern statutes usually require a period of notice (30 days of a time equal to the

• interval b/w rent payments)

• If lease expressly grants tenant the sole right the terminate at will, landlord does NOT have same right to terminate (if you make a significant investment in the land that isn’t fully mobile - you want this kind of deal, ex: restaurants)

  • Courts usually follow the K terms, leases are similar to K’s

Tenancy at **Sufferance**

Holdover tenant. When you just don’t leave after your term of tenancy is over probably because if you renegotiated, L would raise prices. Often, L won’t notice right away and they will accept payments for awhile

options for landlords for holdover tenants

Landlord can either:

• 1. Eviction (plus damages), or

• 2. Consent (express or implied) to the creation of a new tenancy

• American Rule: Recognizes the lessee’s legal right to possession, but implies no such duty upon the lessor as against wrongdoers (Hannan)

  • Where an old tenant holds over, the new tenant can seek remedy against the old

• English Rule: Implies a covenant requiring the lessor to put the lessee in possession. Criticism: prohibits L from leasing while T is still there

Trespasser difference from suffrance

you could get kicked off immediately as a trespasser but with suffrance, you have to get evicted your previous authorization to be there gives you the right to eviction process

Lease v. **License**

Lodger/Roomer/Boarder different than tenant

Things to look at to determine lease or license

 if L provides services, duration of stay, furnished, shared bathrooms that is likely license, not lease

Licensee

* person privileged to use another’s land for a specified purpose (can’t stay longer than specified term)

 I.e. venue for a sporting event, ticket, your seat in class

License incidental to employment

right to use while in a certain job

* Ex: RA, camp counselor at overnight camp, military housing

how to distinguish between a sublease and an assignment

• assignment of a lease conveys the whole term, leaving no interest or revisionary interest in the grantor

• Sublease is a transaction where a tenant grants an interest in the premises less than his own or reserves a revisionary right (Ernst v. Conditt)

Sublease

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* lessee transfers ANYTHING LESS THAN ENTIRE interest to 3rd party & retains a reversion
* NO privity of contract b/w LL & 3rd party, 3rd party can’t be liable to LL to pay rent
* ex: “for a period of 1 year”

Assignment

lessee transfers ENTIRE interest in lease & retains NO reversion

• Privity of contract exists b/w LL & 3rd party, 3rd party liable directly to LL for rent (novation = release from land)

• ex: “transfers balance of the term”

Privity of Estate

Conveyance of right of possession from L to T

• Occurs when someone has an assignment of the property so they are responsible for it. You only would not have privity of estate in a sublease.

• No privity of estate between L and SL in a sublease, L can only sue T for rent

• If there is an agreement between SL and L, there is privity of contract and then L can sue SL

Privity of Contract

Promises in lease from one party to another

**Restrictions on alienability** of a leasehold are:

permitted but are to be strictly construed against the lessor because of hostility toward restraints on alienation in general (*Kendall v. Ernest Pestana*)

Do residential landlords have the reasonable standard for restrictions on alienability?

no; they have a grater ability to reject arbitrarily

Commercial Landlords have restrictions on alienability bc they

are leasing to the public

rule for restrictions on alienability for commercial landlords

Where a lease provides for assignment only with the prior consent of the lessor, such consent may be withheld only where the lessor has a **commercially reasonable** **objection** to the assignment, even in the absence of a provision in the lease stating that consent to assignment will not be unreasonably withheld

Tenants who default

When T is in possession > The only lawful means to dispossess T who has not abandoned nor voluntarily surrendered but who claims possession adversely to a landlord’s claim of breach of written lease is by resort to judicial process (*Berg v. Wiley*)

Tenants who abandon possession

L has duty to mitigate > there has been a shift to considering contract principle of good faith (Sommer v. Kridel)

Actual Eviction

When the tenant is deprived of the occupancy of some part of the demised premises

* After termination the lease and all liability under it for future rent are extinguished

Elements of constructive Eviction

(1) L, without intending to oust T, does an act by which T is deprived of the benefit of enjoyment of some part of the premises, (2) it is substantial enough to warrant T leaving, (3) T leaves (village commons)

\-If tenant leaves within a reasonable period, he is not obligated to continue paying rent

Implied Warranty of Habitability

L will deliver and maintain premises that are **safe, clean, and fit** for habitation throughout tenancy. Can be oral or written. T cannot assume the risk and the warranty cannot be waived (*Hilder v. St. Peter*)

how to determine a breach of the implied warranty of habitability

Can be done by violation of an applicable housing code. Where there is none, look at impact on health and safety of T. T must notify L

what can T do if the implied warranty of habitability is breached?

T can withhold rent and must show (1) notice to L and (2) that condition existed during period. T can repair and deduct from rent due

illegal lease--what happens with rent?

No rent due bc of unsafe and unsanitary conditions in violations of housing code

• Minor technical violations do not render a lease illegal,

• Does not apply if code violations develop after lease, Landlord must have actual or constructive notice for this to apply

Garner v. Gerrish

Held a **life tenancy** is created when the lessee has the sole termination rights and can terminate at a date of their choice

Hannah v. Dusch

**American Rule:** A landlord is not bound to put the tenant into actual possession, but is bound only to put her in legal possession, so that no obstacle in the form of superior right of possession will be interposed to prevent the tenant from obtaining actual possession of the demised premises.

* **The Restatement and the Uniform Residential Landlord and Tenant Act (URLTA) adopts the English Rule**
* The English rule did require landlords to provide tenants with actual possession
* The URLTA is like the UCC in that it is a template for states to adopt as they please
* The URLTA has been adopted in 21 states, with state specific modifications (again, like the UCC)

Ernst v. Conditt

• If the instrument purports to transfer the lessee's estate for the entire remainder of his term it is an assignment, regardless of its form or the parties' intentions

• Conversely, if the instrument purports to transfer the lessee’s estate for less than the entire term, even for a day less, it is a sublease, regardless of the form or intention of the parties

• BUT SEE, Modern Rule (intention): in construing deeds or another written instrument, the cardinal rule is to ascertain the intention of the parties

Kendall v. Ernst Pestana, Inc.

• Court adopts minority rule; where a lease provides for assignment only with the prior consent of the lessor, such consent may be withheld ONLY where the lessor has a commercially reasonable objection to the assignment.

• Majority rule: where a lease contains an approval clause, the lessor may arbitrarily refuse to approve a proposed assignee no matter how suitable the assignee appears to be and no matter how unreasonable the objection is.

Berg v. Wiley

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• A landlord may rightfully use self-help to retake leased premises from a tenant in possession without incurring liability for wrongful eviction provided two conditions are met:

  • The landlord is legally entitled to possession, such as where a tenant holds over after the lease term or where a tenant breaches a lease containing a reentry clause

  • The landlord’s means of reentry are peaceable

• BUT the additional rule created during this case: A landlord must always resort to the judicial process to enforce his statutory remedy against a tenant wrongfully in possession.

  • The court explicitly disfavored self-help in this case as a matter of policy.

Sommer v. Kridel

**Duty to Mitigate adopted from contracts;** the landlord’s duty to mitigate consists of making reasonable efforts to re-let the apartment and the landlord bears the burden of proof that he was reasonably diligent to secure a new tenanth

how to determine whether a landlord has satisfactorily mitigated with a tenant?

turns on the facts of the individual case and may include:

• 1. Have they offered or shown the property

• 2. Have they advertised it?

• 3. Did the defaulting tenant produce a replacement tenant and the landlord refused?

Village Commons, LLC v. Marion County Prosecutor’s Office

**Quiet Enjoyment and Constructive Eviction**: a tenant is relieved of any obligation to pay further rent if the landlord breaches the quiet enjoyment doctrine (i.e. possession and beneficial use of and enjoyment of any part of the premises) through eviction

Hilder v. St. Peter

**Warranty of habitability (that landlords provide clean, fit, and safe living spaces),** tenant must show she notified the landlord of defects and allowed him reasonable time to make repairs. **Abandonment is not required**