Abandonment & Constructive Eviction

Question 1

Abandonment

• Surrender and Acceptance Doctrine:

Answer 1

when a tenant surrenders premises to a landlord before expiration of lease and landlord accepts, tenant and landlord are no longer in privity of estate and therefore no further rents accrue after date of acceptance.
o Does duty to mitigate (e.g. relet) arise?
 Traditional rule: no obligation to mitigate damages
 Modern rule: LL has obligation to attempt to mitigate; and if damages are mitigated then the previous tenant’s liability is reduced

Question 2

• Reid v. Mutual of Omaha Insurance Co. ¬– UT (1989)

Answer 2

o F: Reid (LL) has 5yr lease with Mutual (T); two years in, T vacates; LL leases to 3d party for remainder, but then 3d party vacates
 D claimed constructive eviction (Due to other loud tenants) – Ct. rejects this
o H: LL can make clear that they are not accepting the surrender until a new tenant is found; however, must make good faith effort to re-lease in order to hold tenant liable
 Standard for mitigation is objective commercial reasonableness

Question 3

Eviction

Answer 3

• Implicit covenant in any estate for years that the landlord will not attempt to oust the tenant and if they do, then landlord forfeits the right to rent from the tenant
• Constructive Eviction: conduct that has effectively amounted to an eviction (NY case – leases an apartment but the building is actually a brothel; tenant leaves; landlord sues for rent; court says this was equivalent of ouster thus tenant not liable for rent)
o Every lease contains covenant of quiet enjoyment- a right to the undisturbed use and enjoyment of real property by a tenant or landowner

Question 4

• Petroleum Collections Inc. v. Swords – CA (1975)

Answer 4

o F: P leases to D for 10 years; gas station sign visible from interstate had to be removed, replaced by useless sign, D refuses to pay rent
 LL doesn’t usually have duty to maintain condition of premises in commercial lease; but here the sign was in lease itself
o H: For P
 Taking the sign could be constructive eviction because it was so essential to the business (econ effects sufficient)
 But D lost because he forfeited his right (he didn’t leave once the injury began)  need to vacate the premises (move-out requirement)
 Normally when condition is breached, this is K issue, not forfeiture of property