Code III - Leases

Question 1

What is a lease?

Answer 1

A lease is a bilateral contract by which one gives the use of a thing for a term in return for a rent.

Question 2

What are the three elements of a lease?

Answer 2

The thing; the rent; and conent. 1. A lease conveys possession of a thing, whereas a sale conveys ownership. 2. The rent must be certain or determinable through a method agreed upon by the parties. Rent need not be in money. The court cannot fix the rent if it has been left up to a third party, unless the rent has been established and then is subject to redetermination, then the court may fix the rent.

Question 3

What are the form requirements for a lease?

Answer 3

Leases are valid between the parties whether oral or written. Leases are subject to the public records doctrine. An unrecorded lease cannot be enforced against a third pary who purchases the property from the lessor. Notice of lease can be recorded.

Question 4

What are the types of leases?

Answer 4

1. Residential–when the thing is to be occupied as a dwelling; and 2. Agricultural–when the thing is a predial estate to be used for agricultural prupoes; 3. Mineral–when the thing is to be used for the production of minerals; 4. Commerical; 5. Consumer–movalbe intended for person/familial use. When the lease is mixed-use, the dominant purpose controls.

Question 5

Who may grant a lease?

Answer 5

One who has possession of a thing of another may lease it. Because such a lease is binding on the parites, the non-owner lessor warrants the lessee’s peaceful possession.

Question 6

Does a lease need to contain a precise term to be valid?

Answer 6

No, the term may be fixed or indeterminate.

Question 7

What are the limits on the duration of a lease?

Answer 7

Duration of a term may not exceed 99 years. A lease in excess of 99 years is not invalid for that reason, the term can be reduced.

Question 8

What happens with a lease with an indefinite term?

Answer 8

1. Agricultural lease–will be deemed year to year. 2. Non-agricultural lease of an immovable/residential lease of a movble–will be deemed month to month. 3. Non-residential lease of a movable will be day to day.

Question 9

What is tacit reconduction?

Answer 9

A lease with a fixed term is tacitly reconducted if the lessee continues in possession and no steps are taken to terminate the lease for: 1. 30 days in agricultural leases; 2. One week in on-agricularal leases with fixed terms of longer than one week; and 3. One day in leases with fixed terms equal or less than one week.

Question 10

What is the effect of tacit reconduction?

Answer 10

1. Lease continues under the same provisions of the old lease except that it is treated as an indeterminate term lease.

Question 11

How does the lease terminate?

Answer 11

1. If lease has fixed term, lease terminates upon the expiration of that temr. 2. Lease with indeterminate term–may be temrinated by either party by notice. (written for immovables/residential leases of movables). Notice must be given 30 days before the end of the period in a lease with a term of longer than one moth; 10 calender days in month to month; 5 calendar days for leases less than amonth; any time prior to expiration for less than one week.

Question 12

What are the lessor’s three basic obligations?

Answer 12

1. Deliver the thing; 2. Maintain the thing in a condition suitable for the purpose for which it was leases; 3. Protect the lessee’s peaceful possession of the thing.

Question 13

What is the lessor’s delivery oblgiation?

Answer 13

Thing must be delivered at the agreed time in good condition.

Question 14

What is the lessor’s mainteance obligation?

Answer 14

1. Must mae all repairs necessary to maintain thing in condition suitable for its purpose; 2. Lessess is liable for repairs caused by his fault; 3. Lessee must tolerate all repaires that cannot be postponed until the end of the lease.

Question 15

What is the lessee’s right to repair and deduct?

Answer 15

If lessor refuses to make necessary repairs, the lessee may make the reapries and demand immediate reimbursement or deduct the cost from the rent. Lessee must first make demand.

Question 16

What is the lessor’s dury to maintain lessee in peaceful possession?

Answer 16

Warranty of peaceful possesion includes distrubances by person with acceess to the thing with the lessor’s consent/occupy adjacent property belonging to the lessor.

Question 17

What is lessor’s liability for destruction/changes in the thing?

Answer 17

So long as lessor is not at fault, damages are not recoverable by the lessee. 1. Total loss–lease is terminated if no lessor fault, but the lessor does not owe damages. 2. Partial loss–if lessee was not at fault, may obtain dissolution/reduction in rent. However, if the impairment was caused by external circumstances (e.g., zoning) to the leased thing, lessee is entitled to dissolution only, not reduction.

Question 18

What are lessor’s responsibilities for vices and defects?

Answer 18

1. Lessor is liable for all defects and vices that prevent thing from being used for its intended prupose, unless it arises from the lessee’s fault.

Question 19

Can the warranty against vices and defects be waived?

Answer 19

Yes, may be waived by clear and unambiguous langauge that is brought to the attention of the lessee. Cannot waive if 1. Lessor knew/should have known of defects; 2. Cannot limit liability for gross negligence/intentionala acts; 3. They relate to vices that are seriously dangerous.

Question 20

What are the lessor’s obligations to third parties for lessee’s activities?

Answer 20

An owner lessor can be liable for a lessee’s activities on the premises. (615 Bourbon Street)

Question 21

What are the duties of the lessee?

Answer 21

1. Pay the rent; 2. Use the thing as a prudent adminsitratior according to the purpose for which it was leased; 3. Return the thing in the same condition, minus normal wear and tear. If lessee uses thing for different purpose/damaging way, lessor may get injunctive relief/dissolve lease/recover damages.

Question 22

What happens when the lessee fails to pay rent?

Answer 22

If the lessee fails to pay rent when due, the lessor may dissolve the lease and regain possession of the thing.

Question 23

Can the lessor act as the lessee’s agent in reletting premises?

Answer 23

Yes, if lessee has abandoned the premises, the lessor has the right to retake possession of the premises and to relet them as a mandatary for the lessee. If this occurs, the lease is not terminated, and the lessee is not relieved of his obligations under the lease. (unless lessor acts in way incompatible with earlier lease.)

Question 24

What is the lessee’s right to sublease, assign or encumber?

Answer 24

A lessee can sublease the leased thing, or assign and encumber his rights under the lease unless this right has been expressly prohibited in the lease contract.

Question 25

What is asiignment of a lease?

Answer 25

An assignemnt is a transfer of a contract, I.e., both rights and duties, while a sublease is a transfer of a right only. Effects of assingment is that two parties have agreed to pay the lessor. Unless lessor agrees to novation, the two debtors are solidary obligors.

Question 26

What is a sublease?

Answer 26

A sublease is a transfer of the lessee’s right of occupancy. Sublessee does not promise to pay the lessor anything. No third party beneficiary in sublease.

Question 27

Can a lessor abuse his right to reject assignment of sublease?

Answer 27

No, abuse of right occurs when the right is exercised with predominant intent to harm the other party.

Question 28

What is the lessee’s failure to remove improvements?

Answer 28

If the lesee does not remove the improvements, the lessor may either appropriate ownership of the improvements paying the lessee the lesser of their costs/enhanced value fo the leased thing OR demand that the lessee remove them within a reaosnable time. If lessee fails to remove on notice, lessor may remove them at lessee’s expense or appropriate ownership with notivce by certified mail.