Four Leasehold and Nonfreehold Estates

Question 1

Leasehold - Definition

Answer 1

• leasehold = estate in land, under which the tenant has a present possessory interest in the lease premises and the landlord has a future interest (reversion)

Question 2

Kinds of Leasehold Interests

Answer 2

• tenancy for years
• periodic tenancy
• tenancy at will
• tenancy at sufferance

Question 3

Tenancy for Years - General Concept

Answer 3

• lease for a fixed, determined period of time
• doesn’t need to be a particular length (ex: one week or 50 yrs equally fine) as long as it’s determined

Question 4

Tenancy for Years - Termination

Answer 4

• tenancy for years ends automatically at its termination date
  -> b/c there’s a set end date, no notice is needed for termination
• landlords also often reserve “right of entry” -> means they can terminate lease if tenant breaches any of the lease’s covenants
  -> can usually terminate for failure to pay rent though even without reserved right of entry
• surrender - may terminate if tenant surrenders + landlord accepts (same conditions for this kind of agreement as formation of initial lease)

Question 5

Tenancy for Years - Writing

Answer 5

• tenancies for years are usually created by written leases
• MUST be in writing if more than one year (STATUTE OF FRAUDS)

Question 6

Periodic Tenancy - Basic Concept

Answer 6

• a lease which continues for successive intervals until either the landlord or the tenant give proper notice of termination
• continuous until properly terminated

Question 7

Periodic Tenancy - Creation

Answer 7

• can be express or by implication/operation of law

Question 8

Periodic Tenancy - Express Creation

Answer 8

• uses language like “month to month”, “year to year”, or “week to week”

Question 9

Periodic Tenancy - By Implication/Operation of Law

Answer 9

Three ways to get a periodic tenancy by implication:
1 - land leased w/ no mention of duration, but provision is made for payment of rent at set intervals
2 - oral term of years in violation of the Statute of Frauds -> lease then measured by the way rent is tendered
3 - residential lease where landlord elects to hold over a tenant who has wrongfully stayed on past the conclusion of the original lease -> lease measured by whatever way rent is tendered

Question 10

Periodic Tenancy - Termination

Answer 10

• notice must be given for termination (b/c periodic tenancy is automatically renewed until proper notice of termination is given)
  -> at common law, notice must be at least equal to the length of the period itself, unless otherwise agreed
  -> usually also has to be timed to terminate the lease at the end of a period
  -> note that parties can change these rules through private agreement though

Question 11

Tenancy at Will - General Concept

Answer 11

• tenancy of no fixed period of duration
  -> terminable at will of either landlord or tenant
• ex: “To T for as long as L or T desires”

Question 12

Tenancy at Will - Creation

Answer 12

• generally, must be created by an express agreement that the lease can be terminated at any time
• note that if parties DON’T specify that, court will automatically assume implied periodic tenancy

Question 13

Tenancy at Will - Termination

Answer 13

• if the lease gives only the landlord the right to terminate, a similar right will be implied in favor of the tenant
• vs. if lease only gives that right to tenant, landlord DOESN’T get implied equivalent
• can theoretically be terminated at any time, but most states require notice and a reasonable time to quit
  -> alternatively, can be terminated by operation of law (ex: due to death)

Question 14

Tenancy at Sufferance - Creation

Answer 14

• created when a tenant wrongfully holds over (they remain in possession past the expiration of the lease)
• the wrongdoer gets a leasehold estate designation so that the landlord can recover rent

Question 15

Tenancy at Sufferance - Termination

Answer 15

• lasts only until landlord either evicts tenant or elects to hold the tenant to a new tenancy
• no notice of termination is required

Question 16

Hold-Over Doctrine - General Concept

Answer 16

If tenant continues in possession after their right to possession has ended, landlord may:
1) evict the tenant OR
2) bind the tenant to a new periodic tenancy

Question 17

Hold-Over Doctrine - Rules for Lease Created

Answer 17

• length generally depends on how rent was computed under the lease that has ended
  -> if computed quarterly but payable monthly, quarter-quarter tenancy is created
  -> monthly if rent computed monthly
  -> annual if rent computed yearly but paid monthly
• max tenancy that can be created in this manner is year-to-year
• promises made by landlord + T in original lease become part of the tenancy for the additional term

Question 18

Hold Over Doctrine - Commercial Tenants

Answer 18

• may be held to a new year-to-year periodic tenancy if the original lease term was for one year or more
• technically, the length of new tenancy based on way rent computed, if original term less than one year, new tenancy is typically month-to-month

Question 19

Hold Over Doctrine - Residential Tenants

Answer 19

• generally held to a month-to-month tenancy, regardless of the original term
• if landlord notifies tenant before the lease expires that occupancy after the termination will be at an increased rent, the tenant, by holding over, is held to have acquiesced to the new terms (even if T actually objected to the terms)
  -> holding over equals assent

Question 20

Hold Over Doctrine - Exceptions

Answer 20

Landlord can’t bind tenant to holdover tenancy if:
- tenant remains in possession for only a few hours after termination or leaves a few articles of personal property OR
- delay is not the tenant’s fault (ex: severe illness)

Question 21

Lease - Definition

Answer 21

• a contract that governs the landlord-tenant relationship

Question 22

Dependence of Lease Covenants

Answer 22

• at common law, covenants were independent -> if one party breached a covenant, other could recover damages but the overall relationship endured
• modern: L can terminate for nonpayment of rent, + T can terminate when L breaches covenant of quiet enjoyment or implied warranty of habitability

Question 23

Lease - Options to Purchase

Answer 23

• separate contract supported by consideration that is a continuing offer to sell the land at a specified price
• as long as the option is contained within the lease itself, the consideration for the lease supports the option
• must be evidenced by a signed writing to satisfy SOF (because it’s an interest in land)

Question 24

Options to Purchase - Exercise of Option

Answer 24

• absent a contrary provision, the option lasts as long as the lease
• method of exercise is determined by the agreement
• party granting the option may generally keep the consideration regardless of whether the option is exercised (consideration is for the continuing offer, not $ for purchase)

Question 25

Options to Purchase - Enforcement

Answer 25

• although RAP applies to options, there’s an exception for options attached to leases -> such options are enforceable even if violate RAP
• usual remedy is specific enforcement, but damages are also available