Landlord & Tenant; Fixtures

Question 1

A leasehold is:

A. Not an estate in land
B. A freehold estate in land
C. A nonfreehold estate in land

Answer 1

C. A nonfreehold estate in land.

A leasehold is a nonfreehold estate in land. Nonfreehold estates in land (leaseholds) give possession of land for a limited time. The tenant has a present possessory interest in the leased premises, and the landlord has a future interest (reversion). A leasehold is not a freehold estate in land. Freehold estates in land (e.g., fee estates and life estates), like leaseholds, give possession, but their duration is regarded as longer than that of the nonfreehold (or leasehold) estates. A leasehold IS an estate in land. Possessory interests in land are estates in land, and as explained above, both the tenant and the landlord have possessory interests in leased premises. In contrast, nonpossessory interests in land (e.g., easements, profits, and covenants) are not estates in land. QUESTION ID: P0021A Additional Learning

Question 2

Which statement is true regarding tenancies at will?

A. Both the landlord’s and the tenant’s rights to terminate must be express and will not be implied
B. If a lease gives only the tenant the right to terminate at will, a similar right generally will be implied in favor of the landlord
C. If a lease gives only the landlord the right to terminate at will, a similar right generally will be implied in favor of the tenant
D. If a lease gives only the landlord the right to terminate at will, a similar right generally will not be implied in favor of the tenant

Answer 2

C. If a lease gives only the landlord the right to terminate at will, a similar right generally will be implied in favor of the tenant

If a lease gives only the landlord the right to terminate at will, a similar right generally will be implied in favor of the tenant. A tenancy at will is a tenancy that continues only until the landlord or the tenant gives notice and time to quit. Because in a tenancy at will both the landlord and the tenant must have the right to terminate the lease at will, courts usually imply a right to terminate in favor of the tenant if the lease gives only the landlord the right to terminate at will. On the other hand, if a lease gives only the tenant the right to terminate at will, a similar right generally will NOT be implied in favor of the landlord. Rather, most courts would interpret the conveyance as creating a life estate or fee simple terminable by the tenant (i.e., determinable). However, it is not true that both the landlord’s and the tenant’s rights to terminate must be express and will not be implied. As explained above, if the lease gives the landlord such a right, generally a court will imply the same for the tenant. QUESTION ID: P0024A Additional Learning

Question 3

In residential leases, a tenant who holds over after termination of a year-to-year periodic tenancy may be held to a new periodic tenancy from __________.

A. Week to week
B. Year to year, with rent payable annually
C. Month to month
D. Year to year, with rent payable monthly

Answer 3

C. Month to month

In residential leases, a tenant who holds over after termination of a year-to-year periodic tenancy may be held to a new periodic tenancy from month to month. If the tenant continues in possession after the termination of a lawful tenancy, the landlord may evict the tenant or bind the tenant to a new periodic tenancy. The terms and conditions of the expired tenancy (e.g., rent, covenants, etc.) apply to the new tenancy. Most courts would rule that a residential hold-over tenant becomes a month-to-month periodic tenant, regardless of the term of the original lease. Thus, even though the lease was for one year or more, the tenant may not be held to a new periodic tenancy from year to year, whether rent were payable monthly or payable annually. In contrast, a hold-over tenant under a commercial lease for one year or more may be held to a new year-to-year periodic tenancy. In residential leases, a tenant who holds over under a year-to-year periodic tenancy probably will not be held to a new periodic tenancy from week to week. While this might occur if the residential tenant were a roomer paying weekly rent, facts to that effect are not present here. QUESTION ID: P0025B Additional Learning

Question 4

If a landlord’s breach of duty renders the premises unsuitable for occupancy, the tenant may:

A. Remain in possession of the premises, continue to pay rent, and sue for damages
B. Remain in possession of the premises and refuse to pay rent until the interference ceases
C. Sue for breach only if the lease contained an express covenant for quiet enjoyment
D. Vacate the premises, terminate the lease, and sue for damages

Answer 4

D. Vacate the premises, terminate the lease, and sue for damages

If a landlord’s breach of duty renders the premises unsuitable for occupancy, the tenant may vacate the premises, terminate the lease, and sue for damages. Under the doctrine of constructive eviction, if the landlord’s breach (i.e., doing an act or failing to provide some service that he has a legal duty to provide) makes the premises untenantable, the tenant may terminate the lease and also may seek damages if the following conditions are met:1. The breach must be by the landlord or by persons acting for him.2. The breach must substantially and materially deprive the tenant of her use and enjoyment of the premises (e.g., flooding, absence of heat in winter).3. The tenant must give the landlord notice and a reasonable time to repair.4. The tenant must vacate the premises within a reasonable time. Because a tenant cannot claim a constructive eviction unless and until she vacates the premises, her remedies do not include remaining in possession of the premises and refusing to pay rent until the interference ceases or continuing to pay rent and suing for damages. The tenant is not limited to suing for breach only if the lease contained an express covenant for quiet enjoyment. Every lease contains an implied covenant that neither the landlord nor someone with paramount title will interfere with the tenant’s quiet enjoyment and possession of the premises. If a landlord does so, the tenant has the remedies discussed above. QUESTION ID: P0031B Additional Learning

Question 5

One week after a month-to-month tenant reports her landlord for housing code violations, the landlord gives the tenant 30 days’ notice that he is terminating her lease.

May the landlord evict the tenant after 30 days?

A. Yes, because the tenant may seek damages under the implied warranty of habitability
B. Yes, because one month’s notice is required to terminate a month-to-month tenancy
C. Yes, unless the tenant can prove the landlord had a retaliatory motive
D. No, unless the landlord can show a valid, nonretaliatory motive

Answer 5

D. No, unless the landlord can show a valid, nonretaliatory motive

No, the landlord may not evict the tenant after 30 days unless the landlord can show a valid, nonretaliatory motive. A landlord may not penalize a tenant for exercising her legal right to report housing or building code violations. Retaliatory acts include raising the rent; reducing tenant services; and terminating the lease, even as to periodic tenants to whom the landlord gives notice. Generally, retaliatory eviction statutes presume retaliation if the landlord acts shortly after the tenant exercises her rightsGenerally, retaliatory eviction statutes presume retaliation if the landlord acts shortly after the tenant exercises her rights (within 90 to 180 days in many states). Because retaliation is presumed, the tenant would be protected even if the tenant could not prove the landlord had a retaliatory motive. However, the landlord may overcome the presumption as stated above.Although one month’s notice is required to terminate a month-to-month tenancy, the tenant could claim retaliatory eviction because her lease was terminated shortly after she reported the housing code violations, as explained above. Under the implied warranty of habitability, the landlord covenants that the premises are suitable for human residence (e.g., up to the standards of the local housing code). Although the tenant may seek damages against a landlord who violates this warranty, a tenant who reports housing code violations may not be evicted in retaliation. QUESTION ID: P0033A Additional Learning

Question 6

Which of the following transfers creates a sublease from T to T2?

A. Six months into a seven-month tenancy for years, T transfers his interest “to A for the balance of the leasehold term”
B. One year into a five-year tenancy for years, T transfers his interest “to T2 for four years; however, if T2 breaches the original lease terms, T may reenter and retake the premises”
C. Two years into a four-year tenancy for years, T “assigns my entire interest to T2 for one year”

Answer 6

C. Two years into a four-year tenancy for years, T “assigns my entire interest to T2 for one year”

If two years into a four-year tenancy for years, T “assigns my entire interest to T2 for one year,” the effect of the transfer is to create a sublease between T and T2. The label given by the parties does not determine whether a transfer is an assignment or a sublease. Rather, a complete transfer of a tenant’s entire remaining lease term is an assignment, and a transfer retaining any part thereof is a sublease. Here, although T “assigned” his interest to T2, he transferred only one of the remaining two years of the lease. Thus, the transfer is a sublease rather than an assignment. If six months into a seven-month tenancy for years, T transfers his interest “to A for the balance of the leasehold term,” the effect of the transfer is an assignment of the lease from T to T2 because it includes T’s entire remaining lease term. If one year into a five-year tenancy for years, T transfers his interest “to T2 for four years; however, if T2 breaches the original lease terms, T may reenter and retake the premises,” the effect of the transfer is an assignment of the lease from T to T2. T transferred the remaining four years of the lease to T2, and by the slight majority view, T’s reservation of a right of reentry does not result in a sublease, but rather is still an assignment. QUESTION ID: P0034A Additional Learning

Question 7

The Rule in Dumpor’s Case provides that:

A. A covenant prohibiting assignment prohibits subleasing, and vice versa
B. If a landlord consents to one transfer that would otherwise violate a covenant against assignment or sublease, he waives his right to assert that future transfers breach the lease
C. A covenant against assignment or sublease is void as an unreasonable restraint on alienation
D. If a tenant transfers her interest in violation of a covenant against assignment or sublease, the transfer is void

Answer 7

B. If a landlord consents to one transfer that would otherwise violate a covenant against assignment or sublease, he waives his right to assert that future transfers breach the lease

The Rule in Dumpor’s Case provides that if a landlord consents to one transfer that would otherwise violate a covenant against assignment or sublease, he waives his right to assert that future transfers breach the lease. The landlord must expressly reserve the right to object to future transfers at the time of granting consent to the initial transfer. A covenant prohibiting assignment does NOT prohibit subleasing, and vice versa. Covenants against assignment or sublease are strictly construed against the landlord, and absent an express restriction in the lease, a tenant may freely transfer his leasehold interest, in whole or in part. A complete transfer of the tenant’s entire remaining term is an assignment, and a transfer retaining any part thereof is a sublease. A prohibition of either type of transfer does not prohibit the other type. If a tenant transfers her interest in violation of a covenant against assignment or sublease, the transfer is NOT void. However, the landlord usually may terminate the lease under the lease terms or a statute or sue for damages. A covenant against assignment or sublease is NOT void as an unreasonable restraint on alienation. All jurisdictions enforce such covenants. QUESTION ID: P0035B Additional Learning

Question 8

May a trespasser remove her annexed chattel from the landowner’s property?

A. No, unless the chattel increased the value of the land
B. No, regardless of whether the chattel was installed in good faith
C. Yes, if the chattel was installed in good faith
D. Yes, regardless of whether the chattel increased the value of the land

Answer 8

B. No, regardless of whether the chattel was installed in good faith.

No, a trespasser may not remove her annexed chattel from the landowner’s property, regardless of whether the chattel was installed in good faith. A fixture is a chattel that has been so affixed to the realty that it has ceased being personal property and has become part of the realty. A trespasser (e.g., an adverse possessor before the running of the statute of limitations) normally loses her annexations whether or not affixed in good faith and regardless of whether the chattel increased the value of the land. However, if the trespasser acted in good faith and the chattel increased the value of the land, she may recover the value added to the land. QUESTION ID: P0085A Additional Learning

Question 9

Which of the following leases does not create a month-to-month periodic tenancy?

A. “L leases to T at an annual rent of $6,000, payable at $500 per month”
B. “L leases to T from month to month”
C. “L leases to T at a rent of $500 per month”
D. L orally leases to T “for the next few years” and accepts monthly rent payments

Answer 9

A. “L leases to T at an annual rent of $6,000, payable at $500 per month”

“L leases to T at an annual rent of $6,000, payable at $500 per month” does not create a month-to-month periodic tenancy. A periodic tenancy is a tenancy that continues from period to period until terminated by proper notice by either the landlord or the tenant. It may be created in three ways: (i) by express agreement; (ii) by implication if a lease with no set termination date provides for the payment of periodic rent; or (iii) by operation of law if the tenant holds over or pays rent periodically under an invalid lease. Although a lease at an annual rent, payable monthly creates a periodic tenancy, the majority view is that the tenancy is from year to year rather than month to month. “L leases to T from month to month” creates a month-to-month periodic tenancy by express agreement. “L leases to T at a rent of $500 per month” creates a month-to-month periodic tenancy by implication because the lease reserves a monthly rent. If L orally leases to T “for the next few years” and accepts monthly rent payments, the lease is invalid because most states require that a lease creating a tenancy for more than one year be in writing to satisfy the Statute of Frauds. However, the tenant’s monthly payment of rent converts what would otherwise be a tenancy at will, terminable at the will of either the landlord or the tenant, into a month-to-month periodic tenancy. QUESTION ID: P0023 Additional Learning

Question 10

If L leases property to T, and L subsequently assigns L’s interest to L2, whom may T hold liable when X, a paramount title holder, ejects T?

A. L or L2
B. L only
C. Neither L nor L2
D. L2 only

Answer 10

A. L or L2.

If L leases property to T, and L subsequently assigns L’s interest to L2, T may hold L or L2 liable when X, a paramount title holder, ejects T. A landlord may assign the rents and reversion interest that he owns. The assignee is liable to the tenants for performance of all covenants made by the original landlord in the lease, provided that those covenants run with the land. The original landlord also remains liable on all of the covenants he made in the lease. X’s evicting T from the entire leased premises breaches the covenant of quiet enjoyment, which runs with the land. Thus, L and L2 are personally liable to T. L only is incorrect because L2, the assignee, is liable for all lease covenants that run with the land, and the covenant of quiet enjoyment runs with the land. L2 only is incorrect because L, the original landlord, also remains liable on all covenants in the original lease after assignment. Neither L nor L2 is incorrect because the original landlord (L) remains liable on all covenants in the original lease after assignment, and the assignee (L2) is liable for all lease covenants that run with the land, including the covenant of quiet enjoyment. QUESTION ID: P0036 Additional Learning

Question 11

If the government condemns __________ of the leased land, the tenant’s liability for rent __________, and the tenant __________ entitled to compensation for the taking.

A. part; is apportioned; is not
B. all; continues; may be
C. all; is extinguished; may be
D. part; is extinguished; is

Answer 11

C. all; is extinguished; may be.

If the government condemns all of the leased land, the tenant’s liability for rent is extinguished, and the tenant may be entitled to compensation for the taking. Because both the leasehold and the reversion merge in the condemnor, the lease is terminated. Thus, the tenant’s rent liability does NOT continue. If the government condemns part of the leased land, the tenant’s liability for rent is NOT extinguished. The tenant may be entitled to have rent apportioned and may be entitled to compensation for the taking. QUESTION ID: P0037 Additional Learning

Question 12

Under the growing trend of modern case law, a landlord will be held liable for personal injuries of residential tenants and their guests resulting from the landlord’s __________ negligence.

A. comparative
B. ordinary
C. slight
D. contributory

Answer 12

B. ordinary.

Under the growing trend of modern case law, a landlord will be held liable for personal injuries of residential tenants and their guests resulting from the landlord’s ordinary negligence. This duty of reasonable care is ordinarily not imposed until the landlord has notice of a particular defect and a reasonable opportunity to repair it. Slight negligence involves the failure to exercise great care. A landlord generally will not be held to this high standard of care. Contributory and comparative negligence are defenses to negligence. At common law, a plaintiff’s contributory negligence completely barred his right to recover. Under a comparative negligence system, a contributorily negligent plaintiff may recover a percentage of his damages. QUESTION ID: P0039 Additional Learning

Question 13

The three major types of leasehold estates in land are:

A. Tenancies at sufferance, hold-over tenancies, and implied tenancies
B. Tenancies for years, periodic tenancies, and tenancies at will
C. Joint tenancies, tenancies in common, and tenancies by the entirety

Answer 13

B. Tenancies for years, periodic tenancies, and tenancies at will.

The three major types of leasehold estates in land are tenancies for years, periodic tenancies, and tenancies at will. A tenancy for years is a leasehold estate that continues for a fixed period of time and then automatically expires. A periodic tenancy is a leasehold estate that continues from period to period until terminated by either the landlord or the tenant giving proper notice. A tenancy at will is a leasehold estate that continues only until the landlord or the tenant gives notice and time to quit. Tenancies at sufferance, hold-over tenancies, and implied tenancies are not the three major types of leasehold estates in land. A tenancy at sufferance arises when a tenant wrongfully remains in possession (i.e., “holds over”) after the expiration of a lawful tenancy. Tenancies at sufferance are considered by some authorities not to be estates in land, as the tenant remains in possession only until the landlord takes steps to evict him. Alternatively, the landlord may choose to accept rent and bind the hold-over tenant to a new periodic tenancy. While this creates a periodic tenancy by operation of law, periodic tenancies also can be implied from a lease that states no definite time period but provides for periodic rent payments. However, the type of leasehold estate created is a periodic tenancy. Joint tenancies, tenancies in common, and tenancies by the entirety are not leasehold estates in land. They are forms of concurrent ownership in land, wherein multiple persons have the right to the enjoyment and possession of the land at the same time. QUESTION ID: P0021B Additional Learning

Question 14

Which tenancy continues for a fixed period of time and then automatically terminates without the landlord or the tenant giving notice?

A. Tenancy for years
B. Periodic tenancy
C. Tenancy at sufferance
D. Tenancy at will

Answer 14

A. Tenancy for years.

A tenancy for years continues for a fixed period of time and then automatically terminates without the landlord or the tenant giving notice. A periodic tenancy continues from period to period until terminated by proper notice by either the landlord or the tenant. The termination date of a periodic tenancy is uncertain until notice is given. A tenancy at will continues until terminated by the landlord or the tenant. Sufficient notice must be given to allow the tenant a reasonable time to quit the premises. Such a tenancy also terminates by operation of law if:1. Either party dies;2. The tenant commits waste;3. The tenant attempts to assign his tenancy;4. The landlord transfers her interest in the property; or5. The landlord executes a term lease to a third person. A tenancy at sufferance arises when a tenant wrongfully remains in possession after the expiration of a lawful tenancy. It lasts until either the landlord evicts the tenant or the tenant becomes a periodic tenant by virtue of the landlord’s declaring him so or accepting additional rent. QUESTION ID: P0022A Additional Learning

Question 15

__________ waste results when a tenant intentionally or negligently damages the leased premises.

A. Voluntary
B. Ameliorative
C. Permissive

Answer 15

A. Voluntary.

Voluntary waste results when a tenant intentionally or negligently damages the leased premises. It also results when a tenant exploits minerals on the property, unless the property was previously so used or the lease provides that the tenant may do so. Permissive waste results when a tenant fails to make ordinary repairs to keep the leased premises in the same condition as at the commencement of the lease term, excluding ordinary wear and tear (unless the tenant covenanted to repair ordinary wear and tear). Ameliorative waste results when a tenant makes substantial alterations to the leased premises that increase the value of the property. Modern courts will permit a change in the character of premises that have significantly decreased in value over time if:1. The change increases the value of the premises;2. The change is performed by a long-term tenant (e.g., 25 years) or a life tenant; and3. The change reflects a change in the nature and character of the neighborhood. QUESTION ID: P0026A Additional Learning

Question 16

A tenant leases premises that are destroyed without the fault of either the landlord or the tenant.

Under the majority view, which is true in the absence of a contrary lease provision?

A. The lease remains effective, and the tenant may cease paying rent
B. The lease remains effective, and the tenant must continue paying rent
C. The lease may be terminated at the tenant’s option, and the tenant may cease paying rent

Answer 16

C. The lease may be terminated at the tenant’s option, and the tenant may cease paying rent.

Under the majority view, in the absence of a contrary lease provision, if the leased premises are destroyed without the fault of either the landlord or the tenant, the lease may be terminated at the tenant’s option, and the tenant may cease paying rent. The common law rule differs from the majority view in that if the leased premises are destroyed without the fault of either the landlord or the tenant, the lease remains effective and the tenant must continue paying rent. Note that the harsh common law rule has been modified by statute in most states. Absent a contrary lease provision, if under applicable law the lease remains effective after destruction of the leased premises without the fault of either the landlord or the tenant, the tenant may NOT cease paying rent. QUESTION ID: P0027B Additional Learning

Question 17

In the majority of states, if a hold-over tenant is occupying the premises when a new tenant’s term begins, who must evict the hold-over tenant?

A. The landlord
B. The new tenant
C. No one, because the hold-over tenant is a tenant at sufferance

Answer 17

A. The landlord.

In the majority of states, if a hold-over tenant is occupying the premises when a new tenant’s term begins, the landlord must evict the hold-over tenant. In most states, the landlord must deliver actual possession to the tenant at the beginning of the leasehold term. The landlord is in breach of this duty if she has not evicted a hold-over tenant by the beginning of the new tenant’s term. In a minority of states, the landlord’s obligation is merely to give the tenant the legal right to possession at the beginning of the leasehold term. In these states, if the premises are occupied by a hold-over tenant, it is up to the new tenant to bring eviction proceedings. Although the hold-over tenant is a tenant at sufferance, the landlord must evict the tenant and put the new tenant in actual possession of the premises. A tenant at sufferance is a tenant who wrongfully remains in possession after the expiration of a lawful tenancy. No notice is required to end the tenancy, which lasts only until the landlord takes steps to evict the tenant. QUESTION ID: P0030B Additional Learning

Question 18

L leases property to T, and T covenants to pay rent. T later transfers the balance of the leasehold term to T2.

Whom may L hold liable for the subsequent failure to pay rent?

A. Only T
B. Only T2
C. Either T or T2

Answer 18

2

C
Either T or T2

L may hold either T or T2 liable for the subsequent failure to pay rent. A complete transfer of a tenant’s entire remaining lease term is an assignment of the lease. The assignee and the landlord are in privity of estate, with each liable to the other on all lease covenants that run with the land (e.g., the covenant to pay rent). Thus, an assignee owes rent directly to the landlord. After assignment, the original tenant is no longer in privity of estate with the landlord, but remains in privity of contract. Because T promised to pay rent in his lease with L, he can still be held liable on his original contractual obligation to pay. Thus, L may hold liable the original tenant (T) or the assignee (T2) for failure to pay rent. If, by contrast, the transfer had been a sublease rather than an assignment, L could have held only T liable for failure to pay rent. A tenant’s transfer of less than the entire remaining lease term is a sublease. The sublessee is liable to the original tenant for rent as agreed to in the sublease, but is not personally liable to the landlord for rent or any covenants made by the original tenant in the original lease. This is because the sublessee neither has a contractual relationship with the landlord (i.e., no privity of contract) nor holds the tenant’s full estate in the land (i.e., no privity of estate). Thus, the covenants in the original lease do not run with the land to bind the sublessee. Note that while, in a sublease, T2 is not personally liable to L for the rent, T2 still has a strong interest in ensuring that the rent is paid, because if it is not, L has the right to terminate the lease, thus eliminating T2’s right to possess the premises. QUESTION ID: P0034B Additional Learning

Question 19

Under the growing trend of modern case law, may a landlord be held liable for defects arising after the tenant takes possession?

A. No, because a landlord has no duty to make the premises safe
B. No, unless the landlord knew or should have known of them
C. Yes, because a landlord is held to have notice of defects in the premises

Answer 19

No, under the growing trend of modern case law, a landlord may not be held liable for defects arising after the tenant takes possession unless the landlord knew or should have known of them. At common law, subject to a few exceptions, a landlord had no duty to make the premises safe. However, today, courts are increasingly holding that landlords have a general duty of reasonable care with respect to residential tenants and will be held liable for personal injuries of tenants and their guests resulting from the landlord’s ordinary negligence. Even courts that do not go this far still will recognize a landlord’s duty of reasonable care in certain limited situations, such as common area defects, latent defects, and defects in premises into which the public is invited. But in all cases, if the defect arises after the tenant takes possession, the landlord is liable only if the landlord knew or had reason to know of the defect. Although a landlord is held to have notice of defects in the premises that existed before the tenant took possession, a landlord may not be liable for defects arising after the tenant takes possession unless there is evidence that the landlord actually knew or should have known of them. QUESTION ID: P0039A Additional Learning

Question 20

May a tenant remove a chattel that the tenant affixed to the leased premises?

A. No, because chattels affixed to the leased premises become the property of the landlord
B. Yes, if removal occurs before termination of the lease and leaves no damage to the premises
C. Yes, because chattels affixed to the leased premises remain the property of the tenant
D. No, unless the landlord and tenant expressly agreed that the chattel would be considered a fixture

Answer 20

B. Yes, if removal occurs before termination of the lease and leaves no damage to the premises.

Yes, absent an agreement to the contrary, a tenant may remove a chattel that the tenant affixed to the leased premises if removal occurs before termination of the lease and leaves no damage to the premises. A fixture is a chattel that has been so affixed to the realty that it has ceased being personal property and has become part of the realty. At early common law, chattels affixed to the leased premises became the property of the landlord and thus could not be removed from the premises by the tenant. Today, a tenant may remove annexed chattels before the termination of the tenancy if doing so causes no damage to the premises (or any damage done by removing them is repaired by the tenant). Chattels affixed to the leased premises do NOT always remain the property of the tenant. Chattels the tenant affixes to leased premises may become the landlord’s property (i.e., fixtures) under certain circumstances, such as where the tenant fails to remove the chattels before the end of the lease term, removal of the chattels will substantially damage the premises, or the landlord and tenant agreed that the chattels were intended to become fixtures. A tenant may NOT remove an affixed chattel if the landlord and tenant expressly agreed that the chattel would be considered a fixture. An agreement between the landlord and tenant is controlling as to whether the chattel annexed to the premises was intended to become a fixture. Thus, if the landlord and tenant agree that an annexation is not a fixture, the tenant will be permitted to remove it before the end of the lease term. However, if the landlord and tenant agree that an annexation is a fixture, it becomes the landlord’s property. QUESTION ID: P0084A Additional Learning

Question 21

If L leases a residence to T for five years, ending on December 31, at $400 per month, and T remains in possession of the premises on January 1 of the sixth year, L may hold T to a __________.

A. year-to-year tenancy and may now demand $500 per month
B. year-to-year tenancy at $400 per month
C. month-to-month tenancy and may now demand $500 per month
D. month-to-month tenancy at $400 per month

Answer 21

D. month-to-month tenancy at $400 per month.

If L leases a residence to T for five years, ending on December 31, at $400 per month, and T remains in possession of the premises on January 1 of the sixth year, L may hold T to a month-to-month tenancy at $400 per month. If a tenant continues in possession after the termination of a lawful tenancy, the landlord may evict the tenant or bind the tenant to a new periodic tenancy. The terms and conditions of the expired tenancy (e.g., rent, covenants, etc.) apply to the new tenancy. Although a commercial tenant holding over after termination of a lease for one year or more generally may be held to a year-to-year tenancy, most courts would rule a residential hold-over tenant a month-to-month tenant, irrespective of the term of the original lease. If the landlord notifies the tenant before termination of the tenancy that occupancy after termination will be at an increased rent, the tenant will be held to the new rent if he does not surrender. Here, T’s five-year tenancy for years automatically expired on December 31. Thus, on January 1 he was a hold-over tenant and L could bind him to a new periodic tenancy. As a residential tenant, the period would be month to month rather than year to year. Because there is no evidence that L informed T of the rent increase prior to December 31, T will be liable only for $400 per month. L may not hold T to a month-to-month tenancy and now demand $500 per month because L did not notify T of the rent increase prior to the expiration of his five-year tenancy. L may not hold T to a year-to-year tenancy at $400 per month because T is a residential rather than a commercial tenant. L may not hold T to a year-to-year tenancy and now demand $500 per month because T is a residential rather than a commercial tenant, and because L did not notify T of the rent increase prior to the expiration of his five-year tenancy. QUESTION ID: P0025 Additional Learning

Question 22

If a residential tenant assuming possession of the leased premises discovers that the wiring is dangerously frayed and the plumbing is faulty, the landlord has breached the __________.

A. implied warranty of habitability
B. covenant against encumbrances
C. covenant of quiet enjoyment
D. implied covenant of marketability

Answer 22

A. implied warranty of habitability.

If a residential tenant assuming possession of the leased premises discovers that the wiring is dangerously frayed and the plumbing is faulty, the landlord has breached the implied warranty of habitability. Under the implied warranty of habitability for residential tenancies, the landlord covenants that the premises are suitable for human residence. The standard usually applied is the local housing code. Dangerous wiring and faulty plumbing likely violate the local housing code and will subject the landlord to liability for breach of the implied warranty of habitability. Under the covenant of quiet enjoyment, the landlord covenants that neither she nor someone with paramount title will interfere with the tenant’s quiet enjoyment and possession of the premises. The covenant of quiet enjoyment may be breached by: total actual eviction, partial actual eviction, or constructive eviction. The implied covenant of marketability is not a landlord-tenant concept but is implied in every land sale contract. It obliges the seller to provide the buyer with marketable title (i.e., title reasonably free from doubt) at closing. The covenant against encumbrances is not a landlord-tenant concept but is a usual covenant contained in a general warranty deed. It is a covenant assuring that there are neither visible encumbrances (e.g., easements) nor invisible encumbrances (e.g., mortgages) against the title or interest conveyed. QUESTION ID: P0032 Additional Learning

Question 23

In which of the following situations may L not terminate T’s lease?

A. T refuses to pay higher rent after it is increased by L because T reported L for housing code violations.
B. T refuses to refrain from growing marijuana in his apartment.
C. T ceases paying rent after L breaches her covenant to clean the carpets every six months.
D. T assigns his interest to T2 in violation of a covenant against assignment.

Answer 23

A. T refuses to pay higher rent after it is increased by L because T reported L for housing code violations..

If T refuses to pay higher rent after it is increased by L because T reported L for housing code violations, L may not terminate T’s lease. A landlord may not penalize a tenant for exercising the legal right to report housing or building code violations. This includes terminating the lease, raising the rent, or reducing tenant services. Although a tenant’s failure to pay rent generally allows the landlord to terminate the lease, T would have a retaliatory eviction defense for L’s retaliation in increasing the rent. If T ceases paying rent after L breaches her covenant to clean the carpets every six months, L may terminate T’s lease. At common law, covenants in a lease were independent of each other; i.e., one party’s performance of his promise did not depend on the other party’s performance of her promise. Thus, if one party breached a covenant, the other party could recover damages but still had to perform his promises. However, an exception exists for nonpayment of rent; in nearly all states, a landlord may terminate the lease if the tenant breaches his covenant to pay rent. Thus, if L breaches her covenant to clean the carpets every six months, T can sue for damages but may not refuse to pay his rent. Failure to pay rent allows L to terminate the lease. If T refuses to refrain from growing marijuana in his apartment, L may terminate T’s lease. A tenant has a duty to not use the leased premises for illegal purposes. If he breaches this duty, and the landlord is not a party to the illegal use, the landlord may terminate the lease or obtain damages and injunctive relief. If T assigns his interest to T2 in violation of a covenant against assignment, L may terminate T’s lease. Although a transfer in violation of a covenant against assignment is not void, the landlord may terminate the lease under the lease terms or a statute or may sue for damages. QUESTION ID: P0033 Additional Learning

Question 24

Which of the following statements is correct regarding covenants against assignment or sublease?

A. If a landlord consents to one transfer that violates a covenant against assignment or sublease, he waives his right to avoid future transfers.
B. A covenant against assignment or sublease is an unreasonable restraint on alienation.
C. If a tenant transfers her interest in violation of a covenant against assignment or sublease, the transfer is void.
D. A covenant against assignment prevents the tenant from subleasing her interest.

Answer 24

A. If a landlord consents to one transfer that violates a covenant against assignment or sublease, he waives his right to avoid future transfers.

If a landlord consents to one transfer that violates a covenant against assignment or sublease, he waives his right to avoid future transfers. This is the Rule in Dumpor’s Case. The landlord may reserve the right to avoid future transfers, but such reservation must take place at the time of granting consent. A covenant against assignment or sublease is NOT an unreasonable restraint on alienation. All jurisdictions permit and enforce such covenants. A covenant against assignment does NOT prevent the tenant from subleasing her interest. Covenants against assignment or sublease are strictly construed against the landlord. Thus, a covenant prohibiting assignment does not prohibit subleasing and vice versa. If a tenant transfers her interest in violation of a covenant against assignment or sublease, the transfer is NOT void. However, the landlord usually may terminate the lease under the lease terms or a statute or sue for damages. QUESTION ID: P0035 Additional Learning

Question 25

A tenant who goes into possession of the premises under an invalid lease and pays monthly rent is a:

A. Tenant at will
B. Tenant for years
C. Periodic tenant
D. Tenant at sufferance

Answer 25

C. Periodic tenant.

A tenant who goes into possession of the premises under an invalid lease and pays monthly rent is a periodic tenant. A periodic tenancy continues from period to period until terminated by proper notice by either the landlord or the tenant. If a lease is invalid (e.g., because it does not satisfy the Statute of Frauds), but the tenant nonetheless pays rent periodically, those payments will create a periodic tenancy by operation of law. A tenant who goes into possession of the premises under an invalid lease and pays monthly rent is not a tenant at will. A tenancy at will is a tenancy that continues only until the landlord or the tenant gives notice and time to quit. Although a tenancy at will can arise when a tenant goes into possession under an invalid lease, periodic rent payments will convert this into a periodic tenancy. A tenant who goes into possession of the premises under an invalid lease and pays monthly rent is not a tenant at sufferance. A tenancy at sufferance arises when a tenant wrongfully remains in possession after the expiration of a lawful tenancy, and it lasts only until the landlord takes steps to evict the tenant. A tenant who goes into possession of the premises under an invalid lease and pays monthly rent is not a tenant for years. A tenancy for years is a tenancy that continues for a fixed period of time. It generally is created by a written lease with either a stated termination date or a set duration. QUESTION ID: P0023B Additional Learning

Question 26

What is the result when a tenant at will assigns the tenancy?

A. The tenancy terminates
B. The assignee is in privity of estate with the landlord
C. The assignee is in privity of contract with the landlord

Answer 26

A. The tenancy terminates.

When a tenant at will assigns the tenancy, the tenancy terminates. A tenancy at will is a tenancy that continues until terminated by the landlord or the tenant. Sufficient notice must be given to allow the tenant a reasonable time to quit the premises. Such a tenancy also terminates by operation of law if:1. Either party dies;2. The tenant commits waste;3. The tenant attempts to assign his tenancy;4. The landlord transfers her interest in the property; or5. The landlord executes a term lease to a third person. When a tenant at will assigns the tenancy, the assignee is NOT in privity of estate with the landlord. Privity of estate is the term used to describe why the tenant’s assignee and the landlord are liable to each other on the covenants in the original lease that run with the land. If assignment is permitted, the assignee will be in privity of estate with the landlord. However, tenancies at will may not be assigned, and the attempt to do so terminates the tenancy. When a tenant at will assigns the tenancy, the assignee is NOT in privity of contract with the landlord. Privity of contract is the term used to describe why the original landlord and tenant—as parties to the lease—are liable to each other on the covenants in the original lease. If assignment is permitted, the original tenant rather than the assignee will remain in privity of contract with the landlord. However, as explained above, tenancies at will may not be assigned. QUESTION ID: P0024B Additional Learning

Question 27

In commercial leases, a tenant who holds over after termination of a year-to-year periodic tenancy may be held to __________.

A. A new month-to-month periodic tenancy
B. A new periodic tenancy determined by the manner in which the rent was due under the prior tenancy
C. No new tenancy
D. A new year-to-year periodic tenancy

Answer 27

D. A new year-to-year periodic tenancy.

In commercial leases, a tenant who holds over after termination of a year-to-year periodic tenancy may be held to a new year-to-year periodic tenancy. If the tenant continues in possession after the termination of a lawful tenancy, the landlord may evict the tenant or bind the tenant to a new periodic tenancy. The terms and conditions of the expired tenancy (e.g., rent, covenants, etc.) apply to the new tenancy. Likewise, a commercial tenant holding over after termination of a fixed-term lease for one year or more generally may be held to a year-to-year periodic tenancy. If the original term had been for less than one year, the periodic tenancy would have been determined by the manner in which the rent was due under the prior tenancy. Although a residential tenant holding over after termination of a lease for one year or more generally may be held to only a new month-to-month periodic tenancy, a commercial tenant may be held to a year-to-year periodic tenancy. QUESTION ID: P0025A Additional Learning

Question 28

Absent a specific covenant in the lease, a tenant who fails to repair ordinary wear and tear commits __________.

A. Permissive waste
B. Voluntary waste
C. Ameliorative waste
D. No waste

Answer 28

D. No waste.

Absent a specific covenant in the lease, a tenant who fails to repair ordinary wear and tear commits no waste. A tenant has no duty to repair ordinary wear and tear unless the tenant covenanted to do so. In contrast, permissive waste results when a tenant fails to make ordinary repairs to keep the leased premises in the same condition as at the commencement of the lease term, excluding ordinary wear and tear absent a specific covenant. Voluntary waste results when a tenant intentionally or negligently damages the leased premises. It also results when a tenant exploits minerals on the property, unless the property was previously so used or the lease provides that the tenant may do so. Ameliorative waste results when a tenant makes substantial alterations to the leased premises that increase the value of the property. QUESTION ID: P0026B Additional Learning

Question 29

A landlord and tenant enter into a valid lease agreement in which the tenant covenants to repair the premises.

If the leased premises are destroyed without the fault of either the landlord or the tenant, must the tenant undertake the repairs?

A. No, because the landlord’s warranty of habitability requires the landlord to undertake such repairs
B. No, unless the covenant expressly includes such repairs
C. Yes, if the covenant fails to expressly exclude such repairs
D. Yes, regardless of whether the covenant addresses such repairs

Answer 29

D. Yes, regardless of whether the covenant addresses such repairs

No, the tenant need not undertake the repairs if the leased premises are destroyed without the fault of either the landlord or the tenant, unless the covenant expressly includes such repairs. A covenant requiring the tenant to repair is not usually construed by the modern cases to include rebuilding of structural damage or destruction due to a casualty, structural defects, or a third party’s acts, unless the covenant expressly includes these types of repairs. If the leased premises are destroyed without the fault of either the landlord or the tenant, the tenant need NOT undertake the repairs even if the covenant fails to expressly exclude such repairs. As explained above, a covenanting tenant generally is not liable to make such repairs (rebuilding) absent an express covenant to do so. Thus, it also is NOT true that such an obligation arises regardless of whether the covenant addresses such repairs. If the leased premises are destroyed without the fault of either the landlord or the tenant, the landlord’s warranty of habitability does NOT require the landlord to undertake such repairs. Under the implied warranty of habitability, the landlord covenants that the premises are suitable for human residence. Although a residential landlord’s obligations under this implied warranty are not waivable (e.g., by a tenant’s covenant to repair), if the premises are destroyed without the fault of either party, neither party has a duty to restore the premises absent lease language to the contrary. QUESTION ID: P0028A Additional Learning

Question 30

List all of the remedies a landlord has under modern law when a tenant defaults on her rent obligation.

A. Sue the tenant for rent or evict the tenant
B. Sue the tenant for rent, evict the tenant, or deduct the unpaid rent from the tenant’s security deposit
C. Sue the tenant for rent, evict the tenant, deduct the unpaid rent from the tenant’s security deposit, or seize the tenant’s chattels without notice as security for the unpaid rent
D. Sue the tenant for rent

Answer 30

B. Sue the tenant for rent, evict the tenant, or deduct the unpaid rent from the tenant’s security deposit.

Under modern law, if a tenant defaults on her rent obligation, the landlord may sue the tenant for rent, evict the tenant, or deduct the unpaid rent from the tenant’s security deposit. The landlord may NOT seize the tenant’s chattels without notice as security for the unpaid rent. At common law, this was known as the right of distress. The landlord’s self-help right of distress is now a minority rule. Some states have abolished this common law right, while others have enacted distress statutes that eliminate the self-help feature (seizure by the landlord) or require prior notice and a hearing before property is taken. QUESTION ID: P0029B Additional Learning

Question 31

Which of the following statements is correct regarding covenants against assignment or sublease?

A. A covenant prohibiting assignment prohibits subleasing, but a covenant prohibiting subleasing does not prohibit assignment
B. A covenant prohibiting assignment does not prohibit subleasing, and vice versa
C. A covenant prohibiting subleasing prohibits assignment, but a covenant prohibiting assignment does not prohibit subleasing
D. A covenant prohibiting assignment prohibits subleasing, and vice versa

Answer 31

B. A covenant prohibiting assignment does not prohibit subleasing, and vice versa.

A covenant prohibiting assignment does not prohibit subleasing, and vice versa. This is because covenants against assignment or sublease are strictly construed against the landlord. Absent such an express restriction in the lease, a tenant may freely transfer his leasehold interest, in whole or in part. A complete transfer of the tenant’s entire remaining lease term is an assignment, and a transfer retaining any part thereof is a sublease. If the lease only prohibits one of these two types of transfers, the tenant is free to engage in the other. QUESTION ID: P0035A Additional Learning

Question 32

L leases property to T. L subsequently assigns L’s interest to L2. T thereafter continues paying rent to L.

May L2 evict T for failure to pay rent?

A. No, unless L2 assumed the covenants contained in the original lease
B. No, because T remains in privity of contract with L
C. Yes, if T received reasonable evidence of the assignment

Answer 32

C. Yes, if T received reasonable evidence of the assignment

Yes, L2 may evict T for failure to pay rent if T received reasonable evidence of the assignment. A landlord may assign the rents and reversion interest that he owns without the consent of the tenants unless expressly required by the lease (which is unlikely). However, once the tenants are given reasonable evidence that the assignment has occurred, they must recognize and pay rent to the new owner as their landlord (i.e., attornment). In most states, a landlord may evict a defaulting tenant or sue the tenant for rent. Thus, if T received adequate notice of L’s assignment to L2, she must pay rent directly to L2 and may be evicted for defaulting on this obligation. L2 need NOT assume the covenants contained in the original lease before he may collect rent directly from T. L2 is liable for the burdens of all covenants running with the land that burdened L under the original lease (even without an assumption by L2), and L2 also can enforce all covenants running with the land that benefitted L under the original lease. However, a nonassuming assignee is not liable for covenants contained in the original lease that do not run with the land. Similarly, L2 cannot enforce any covenants made by the tenant that do not run with the land unless L expressly assigns to L2 the right to do so. Since the covenant to pay rent runs with the land, L2 may enforce its benefit, and whether L2 expressly assumed L’s burdens under the original lease is irrelevant. Although T remains in privity of contract with L based on the original lease, this is not a defense for the nonpayment of rent to L2. Rather, it provides T with remedies against L for L2’s breach of covenants contained in the original lease that run with the land. QUESTION ID: P0036B Additional Learning

Question 33

If the government condemns all of the leased land, the tenant’s liability for rent:

A. Continues, and the tenant is not entitled to compensation for the taking
B. Is extinguished, and the tenant may be entitled to compensation for the taking
C. Is extinguished, but the tenant is not entitled to compensation for the taking
D. Continues, but the tenant may be entitled to compensation for the taking

Answer 33

B. Is extinguished, and the tenant may be entitled to compensation for the taking.

If the government condemns all of the leased land, the tenant’s liability for rent is extinguished, and the tenant MAY BE entitled to compensation for the taking, absent a lease provision to the contrary. Because both the leasehold and the reversion merge in the condemnor, the lease is terminated. Thus, the tenant’s rent liability does NOT continue. QUESTION ID: P0037A Additional Learning

Question 34

When a landowner owns a chattel that she affixes to the realty, what determines whether the chattel is a fixture?

A. The objective intention of the annexor
B. The subjective intention of the annexor
C. All chattels affixed to realty by the landowner are fixtures

Answer 34

A. The objective intention of the annexor.

When a landowner owns a chattel that she affixes to the realty, whether the chattel is a fixture depends on the objective intention of the annexor. A fixture is a chattel that has been so affixed to the realty that it has ceased being personal property and has become part of the realty. The annexor’s intention, which governs in common ownership cases, is determined by considering: 1. The nature of the chattel (i.e., how essential it is to the normal use of the realty);2. The manner in which the chattel is attached to the realty (the more substantially attached, the more likely it was intended to be permanent);3. The amount of damage that would be caused by the chattel’s removal; and4. The adaptation of the chattel to the use of the realty (e.g., custom window treatments, wall-to-wall carpet). Whether the chattel is a fixture does not depend on the subjective intention of the annexor. Rather, it depends on her objective intention, determined as explained above. NOT all chattels affixed to realty by the landowner are fixtures. They become fixtures only if this was her objective intention, determined as explained above. QUESTION ID: P0083A Additional Learning

Question 35

Which of the following statements is correct regarding a trespasser’s annexations to a landowner’s property?
A. The trespasser loses the annexed chattel to the landowner but may recover the chattel’s cost.
B. The trespasser may remove any chattels annexed to the landowner’s land in good faith.
C. The trespasser may remove any chattels annexed to the landowner’s land that do not increase the value of the land.
D. The trespasser loses the annexed chattel to the landowner and is liable for the reasonable rental value of the land on which she annexed the chattel.

Answer 35

D. The trespasser loses the annexed chattel to the landowner and is liable for the reasonable rental value of the land on which she annexed the chattel..

Regarding a trespasser’s annexations to a landowner’s property, the trespasser loses the annexed chattel to the landowner and is liable for the reasonable rental value of the land on which she annexed the chattel. A fixture is a chattel that has been so affixed to the realty that it has ceased being personal property and has become part of the realty. A trespasser (e.g., adverse possessor before the running of the statute of limitations) normally may NOT remove any chattels annexed to the landowner’s land, whether or not affixed in good faith. Moreover, the trespasser can be held liable for the reasonable rental value of the land on which she annexed the chattel for the period that she illegally occupied the land. The trespasser may NOT remove any chattels annexed to the landowner’s land, even if they do increase the value of the land. However, if the trespasser acted in good faith, she loses the annexed chattel to the landowner but may recover the value added to the land—not necessarily the chattel’s cost. QUESTION ID: P0085 Additional Learning