lease Flashcards
what is the basic definition of a lease
a lease is a bilateral contract whereby a lessor promises use of a thing for a term to the lessee in exchange for rent
what are the basic substantive requirements for a lease
- consent
- thing
- rent
- term (this will never fail though because law can supply)
consent
what do the parties need consent to
thing and rent
thing
what things are susceptible to lease
all things incorporeal or corporeal, susceptible of ownership, that are not prohibited by law
thing
what are the various types of leases & their definitions
- agricultural: predial servitude used for agricultural purposes
- consumer: movable intended for lessee’s personal use or familial use outside of trade or profession
- commercial: thing is to be used for business or commercial purposes
- mineral: used for production of minerals
- residential: thing occupied as a dwelling
rent
how is rent classified
certain or determinable through a method agreed upon by the parties
* can be determined by an index or 3P; if the method fails, no lease
* court can renew term if it’s already been determined
term
what are the two classifications for term
fixed or indeterminate
term
when does a fixed lease terminate
upon the date expressed (unless reconducted)
term
what’s the max term for a lease
99 years (court will readjust if it extends beyond this period)
form
what is the form requirement for a lease
there is no form requirement -it can be written or oral
third parties
what’s the general rule as to enforceability of a lease towards third parties
an unrecorded lease is not enforceable in a sale to a third party purchaser
third parties
when is an unrecorded lease enforceable against a third party purchaser
- third party assumes obligations of the lessor, or agrees to purchase the thing subject to unrecorded leases
- the third party collects rent from the lessee and the lessee remains in possession of the thing with no objection from the third party
obligations of the parties
what are the lessor obligations generally
- delivery
- maintain the thing for the purpose it was leased
- maintain lessee’s peaceful possession of the thing
- pay taxes
lessor obligations
what are the details of the delivery requirement
must be (1) on time and (2) in suitable condition
lessor obligations
what are the details of the requirement that the lessor must maintain the thing suitable for hte purpose it was leased
- make all necessary repairs to keep the thing suitable for the purpose it was leased (except those which the lessee is called to make)
- warranty against vices and defects: lessor warrants the thing leased will be free from vices and defects that would prevent the thing from being used according to the purpose for which it was leased
lessor obligations
what are the details of the requirement that the lessor must maintain lessee’s peaceful possession of the thing
- peaceful possession may be disturbed by any person claiming a right in the leased thing
- other disturbances include persons with access to the thing with the lessor’s consent
- persons adjacent to the leased property owned by the lessor
- traditionally, this warranty has been regarded as central to the lessee’s cause for entering into the lease and thus unwaivable (code is silent, though)
lessee obligations
when must the lessee make necessary repairs
- lessee causes damages or those on premises with lessee’s consent cause damage
- damages beyond normal deterioration
what must lessee do with regards to repairs that the lessor must make ASAP
lessee must tolerate repairs (may be entitled to reduction, abatement, or dissolution)
what must the lessee do to make necessary repairs that the lessor has failed to make
- make a demand
- if the lessor refuses, lessee can make repairs at a reasonable cost
lessee may be entitled to reimbursement or a reduction of rent
what are the lessee’s rights and obligations generally?
- use the thing as prudent administrator according to the purpose for which it is used
- to pay rent
- to return the thing at the end of the lease in the same condition as it was delivered to him, except for normal wear and tear
lessee obligations/rights
what must the lessee do if the thing requires repair
bound to notify lessor without delay when the thing is damaged or requires repair or disturbance of peaceful possession
what are the lessor’s rights if the lessee fails to use the thing for a purpose other than that for which it was originally leased or in a way that may cause damage to the thing
- obtain injunctive relief
- dissolve the lease
plus damages in either case
when is rent due
at the beginning of the term, although it can be due at shorter intervals
what are the lessor’s potential remedies for lessee’s failure to pay rent
- sue to dissolve and regain possession or
- demand specific performance
in either case, lessor can obtain accrued rent; lessor may obtain future rent if there’s an acceleration clause
what are the lessee’s defenses to not paying rent
- judicial control –not every failure to perform entitles the lessor to immediate dissolution (court may grant extra time for performance and dissolution is not appropriate when the lessee’s failure to perform is minor in comparison with other obligations)
- custom of accepting late rent
what happens if the lessee abandons the property
the lessor has a right to retake possession and relet as mandatary for the lessee
if the lessee abandons the property and lessor retakes possession, when are the lessee’s obligations terminated
- new tenant pops up
- lessor’s arrangement is incompatible with original lease
what are the lessee’s rights in regards to improvements made to the thing leased
they can remove all improvements, but must restore the thing to its former condition
what if the lessee does not remove the improvements
lessor can either (1) appropriate ownership, paying the lessee the lesser of the costs or enhanced value of the thing or (2) demand removal within a reasonable amount of time
if the lessor opts to demand removal of improvements and lessee fails to remove, what are the lessor’s options
- remove at the lessee’s expense or
- appropriate ownership of them with a notice by certified mail to the lessee but without any payment
what’s the lessee’s right to sublease
generally has the right to sublease unless agreed otherwise
