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Property AOG > Lease > Flashcards

Lease Flashcards

1
Q

Lease - Concept

A

A contractual agreement by which one party conveys an estate in property to another party, for a limited period, subject to various conditions, in exchange for something of value, but still retains ownership.

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2
Q

Lease - Gral

A
  • Tenant: receives a non-freehold possessory estate with the land. Right to use the property for period of time in exchange for rent.
  • LL retains reversionary interest at the end
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3
Q

Lease - Types of tenancy (4)

A

1) Term Tenancy
2) Periodic Tenancy
3) Tenancy at will
4) Tenancy at sufferance

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4
Q

Term Tenancy

A
  • definitive term - no tight to renew term
  • Terminates of last day (pre-death of T passes ot his heir)
  • SOF if over 1 year
  • Treated as periodic if: a) oral agreement, and b) when negotiations to renew exceed term.
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5
Q

Periodic Tenancy

A
  • Default
  • w/defined period which repeats if no notice of termination
  • Duration: as stated, if not - in accordance to payments
  • Termination: Requires notice similar period to payments (30 days is standard)
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6
Q

Tenancy at will

A
  • No duration (“by permission”)
  • Terminate “at will” by either party w/reasonable time to vacate
  • SOF violation - default turns into Periodic Tenancy
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7
Q

Tenancy at Sufferance

A
  • Tenant holds-over but not as trespasser bc of original possession
  • LL can choose to:
    1) Start new periodic tenancy
    2) File eviction action + dx
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8
Q

Duties for LL (5)

A

1) Delivery of possession + control
2) Implied covenant of quiet enjoyment
3) Repairs
4) Deposits
5) Non-retaliatory eviction

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9
Q

Duties LL - Delivery of possession + control - elements (2)

A

1) Fitness of Premises: CL - LL mades no implied warranties of habitability
* - T has a duty to inspect and take “as is” and LL liable for knowledge of serious hidden defect not disclosed
2) Implied Warranty of Residential Habitability: only for residential leases
* - CL include electricity, heat, water services

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10
Q

Duties LL - Remedy for breach (for T) of delivery of possession and control (5)

A

1) Vacate and terminate + dx
2) Remain + dx (equal to the difference btwn rent and actual value in such conditions)
3) Equitable Relief: specific performance to make comply with housing code
4) Repair to restore habitability: discount from rent (not for ordinary maintenance)
5) Withhold rent + defend from eviction: usually required to pay in escrow

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11
Q

Duties LL - Implied Covenant of Quiet Enjoyment

A
  • LL promises not to interfere with T’s use + enjoyment
  • Breach can be actual/constructive - i.e. Eviction
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12
Q

Duties LL - Implied Covenant of Quiet Enjoyment - Eviction as breach

A
  • Actual: as physical ouster
  • Constructive: when LL interferes with T’s personal use OR where LL fails to keep promises in required condition of habitability
    • Acts by 3rd parties usually not constructive (unless when in common areas or for other T causing Nuisance)
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13
Q

Duties LL - Remedy for breach to Implied Covenant of Quiet Enjoyment

A
  • Vacate + Terminate + and owe no further rents - Exercised within reasonable time (some states require notice to allow for cure.
  • T needs to vacate in order to have a constructive eviction, if he remains obligation to pay rent continues and possible claim
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14
Q

Duties LL - Repairs

A
  • Old CL rule: LL no duty
  • Modern rule (Restatement): LL duty to repair and liable for negligent repair and tort liable for dx caused repairs
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15
Q

Duties LL - Deposits

A
  • Treatment depends on type of deposits:
    1) Security: use only for repairs and return balance
    2) Last month rent: retained by LL and applied to last month rent
    3) “non- refundable fee”: LL retained - for prepare and accept lease
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16
Q

Duties LL - No retaliatory eviction

A
  • in restatement + many states
  • Deemed when eviction within 90-180 days from certain acts - i.e. report housing code violations
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17
Q

Duties for T (5)

A
  • gral: not enforceable by 3rd parties
    1) Pay rent
    2) Comply with use restrictions
    3) Maintain premises
    4) Non-disturbance
    5) Tort Liability
18
Q

Duties T - Pay Rent

A
  • on time + utilities
  • Breach by LL of his duties is not excuse
  • “LL provision”: included in lease contracts allows for LL to evict T for-non payment w/prior notice
19
Q

Duties T - Pay Rent - Exceptions to duty (4)

A

1) T and LL agree to terminate lease
2) LL accepts surrender or intention tu surrender the premises by T (SOF req)
3) Eviction actual or constructive
4) Bc of offset of repairs (related with warranty of habitability)

20
Q

Duties T - Comply with use restriction

A
  • Binding provision on lease to T
21
Q

Duties T - Maintain premises obligations (6)

A
  • Even if non-express covenants - CL rules
    1) Day-to-day ordinary repairs (usually included in leases, even with liability to persons injured from failure to repair or N repair)
    2) No Waste (duty not beyond ordinary “wear and tear”)
    3) No-tax or Insurance of premises duty: unless agreed on.
    4) Alteration + restoration
    5) Property removal
    6) Responsible for guests
22
Q

Duties T - Maintain premises obligations - No Waste

A
  • Duty no dx beyond ordinary “wear and tear”
  • Dx beyond lease life - liable when intentional/N - duty similar one to life-T not to injure/deplete LL’s reversion.
23
Q

Duties T - Maintain premises obligations - Alteration + Restoration

A

1) T liable for costs to restore to original condition
2) For _chattels and trade fixtures remova_l, liable if dx to LL reversionary interest
3) Ameliorative waste: when T change’s nature/use of the premises. (negative/decreases value - positive/improvements increase value)

  • Negative: LL can seek possible injunction to stop conversion + possible dx for cost of restoration of original use.
  • Positive: No recovery/remedy possible if positive and consistent to overall change in the neighborhood
24
Q

Duties T - Non disturbance

A

T not to create nuisance or otherwise unreasonably disturb other T

25
Q

Duties T - Tort Liability

A
  • T liable for injuries caused in areas of exclusive control
  • For guests and pets (LL liable for common areas, hidden defects not disclosed and N repairs)
26
Q

LL Remedies for breaches of T’s duties (3 situations)

A

1) Abandon property: T quits premises and defaults on lease
2) Anticipatory repudiation by T
(3) Mitigation duty)

27
Q

LL Remedies for breaches of T’s duties - Abandon Property (3 options for LL)

A

1) Accept surrender + re-enter and take possession: T discharged of future obligations (some states require LL to court order or help from public official)
2) Hold contract valid + sue for each due rent (many states require LL to mitigate dx by re-letting)
3) Re-let property: LL release property and T held responsible for deficiency (pre-notice) in rent if no new T or new T paying less

28
Q

LL Remedies for breaches of T’s duties - Anticipatory Repudiation by T

A
  • Unequivocal by T
  • LL can terminate lease + suit for past due rent
  • some states allow for future rents until end of lease - “Acceleration clause”
  • Other states: “Accrual rule”: dx only for executory part of contract
    • creates duty for LL to make reasonable effort to re-lease property - deducing rent obtained from Dx by T
29
Q

LL Remedies for breaches of T’s duties - Mitigation Duty

A
  • LL duty to mitigate by re-lease
  • But no obligation to rent for other uses or unacceptable T
30
Q

Assignment and Sublease - Gral

A
  • Ok unless prohibited
  • Assign/Sublease are independent rights
  • If prohibition exists and LL receives rent from assignee/sublessee - right to enforce prohibition is deemed waived
31
Q

T assignment - Gral

A
  • As transfer of T’s right over entire space/property
  • Original T remains liable to LL, UNLESS release.
  • Assignee T: comes into privity - directly liable to LL - under 3rd party beneficiary
    • liable for what “touches the land”: i.e. pay rent, insure, repair, maintain, etc.
32
Q

LL Assignment of lease (Rent Assignment)

A
  • Assign rights to receive rent to 3rd party
  • T’s need to receive notice to start paying to 3rd party
33
Q

LL Sale of premises

A
  • Right to receive rent and future reversion assigned with transfer of property
  • T’s need to receive notice to start paying to new owner

- Gral rule: doesn’t affect lease UNLESS sale as condition subsequent in lease deed

34
Q

LL mortgage’s property - gral + effects on T’s rights (pre-post)

A
  • LL gives mortgage to lender assigning rents if default in payment of mortgage

- T’s bound and must pay to lender after notice

  • Pre-mortgage T’s: rights not affected by LL default to pay mortgage

- Post-mortgage T’s: can be dispossessed + lease cancelled if LL defaults on mortgage payment

35
Q

T subleases property - gral

A
  • Original T retains reversion (doesnt give away all thespace/time/rent to sublessee)

- Sub-lessee no direct obligation with LL

  • Original lessee remains liable to LL for default of sublesee UNLESS release is given
36
Q

Lease termination - Gral causes (6)

A

1) Premises surrender before term (gral cause)
2) Non-renewal of term (gral cause)
3) Frustration of purpose
4) Condemnation by eminent domain
5) Mortgage foreclosure
6) Merger

37
Q

Lease (termination) - Frustration of purpose

A
  • T discharged of lease obligations when is impractical/impossible to use the premises for planned purpose
  • i.e. use becomes illegal
38
Q

Lease termination - Premises surrendered before time

A
  • physical abandon + expressed intention not to continue - T liable for rent for remainder of term BUT LL with mitigation duty
39
Q

Lease termination - Non-renewal of term

A
  • Most states require X number of days of notice prior
40
Q

Lease termination - Condemnation by eminent domain

A
  • If over the entire property - lease terminated - If over part of property (partial): T not discharged of entire obligation
  • Award distributed among LL and T according to their interest
  • T’s portion is equal to difference btwn lease commercial value and T’s obligation in the lease (usually ward when lease is for bargain rate or T has fixed purchase option lower than the award OR when T can prove lost business value that comes from moving to new location)
41
Q

Lease termination - Mortgage foreclosure

A
  • When mortgage pre-dates lease
  • New owner can force T to surrender premises and quit the property
42
Q

Lease termination - Merger (2)

A
  • T purchases property OR
  • LL purchases lease
  • If property taken by condemnation : interests for leasehold and reversion both merge in taker

Property AOG (13 decks)

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