Lease Flashcards
Lease
Bilateral contract where one gives use of thing for a term in return for rent
Substantive Elements of the Lease
Things that cannot be used without destruction cannot be lease.
The Thing – lease conveys possession of a thing, not ownership.
The Rent – must be certain or determinable, need not be in money. Third party can fix rent. If rent not fixed in some way, there is no lease.
Consent required.
Form Requirement of Lease
Valid whether oral or written, and subject to public records doctrine.
Notice of lease may be recorded instead of lease contract. Must have names, addresses, signatures of parties, date of execution, renewal options, and right of lessor related to transferring property
Types of Lease
Residential – thing to be used as a dwelling
Agricultural – predial estate to be used for agricultural purpose
Mineral – thing to be used for production of minerals
Commercial – thing for business or commercial purpose
Consumer – moable intended for lessee’s personal or familial use outside his trade or profession
Who may Grant a Lease
One who has possession may grant a lease. A non-owner lessor who leases a thing warrants lessee’s peaceful possession.
Term of the Lease
Lease does not need a precise term. May be fixed (designated date or occurrence of uncertain event) or indeterminate (month-to-month).
Duration of term may not exceed 99 years, and will be reduced to 99 years.
Indeterminate Term of Duration:
i. Agricultural lease will be deemed year-to-year.
ii. Non-agricultural lease of immovable or residential lease of movable deemed month-to-month.
iii. Non-residential lease of mobable is day-to-day unless fixed period of not more than one month.
Tacit Reconduction (Holdover)
i. Lease with fixed term is tacitly reconducted if lessee continues in possession and no steps are taken to terminate lease for 30 days for agricultural, 1 week for non-agricultural with fixed term of week or more, or one day for lease with fixed term of week or less.
ii. Lease continues under same provisions of old lease except treated as indeterminate term lease of the same type.
Termination of the Lease
If lease has fixed term, it terminates on expiration of that term.
Lease with indeterminate term can be terminated by either party on notice. For immovable or residential lease of movables, must be written, otherwise can be oral. Must be given 30 days before end of period in month-plus lease, 10 days before end of month for month-to-month, 5 days before end if less than one month, and any time if less than a week.
Lessor’s Obligations
Delivery – must be delivered at agreed time and fit for intended use
Maintenance
i. Repair – Must make all repairs necessary to maintain thing in condition suitable for purpose for which it was leased, except those lessee obligated to make. Lessee liable for repairs based on his fault or those of persons on premises with his consent, and non-normal deterioration
1. Abatement or reduction possible if repair causes inconvenience.
ii. Lessee’s Right to Repair and Deduct if lessor refuses to make necessary repairs.
Maintain Lessee in Peaceful Possession – if lessee’s possession disturb by any person claiming right in leased thing, lessor is liable. Includes people who occupy adjacent property owned by lessor.
If total no-fault destruction, lease terminated, but no damages owed. If partial no-fault destruction, lessee can get diminution of rent or termination of lease.
Lessor’s Responsibilities for Vices and Defects
Lessor liable for all defects and vices that prevent thing leased from being used for its intended purpose. Doesn’t matter if lessor knew or didn’t know of vice or defect at time of lease or when it arises.
i. Doesn’t arise if the vice or defect is lessee’s fault.
Can be waived by clear and unambiguous language brought to the attention of the lessee. Ineffective if they violate Obligations rules on liability limitation, and in residential and consumer leases if waived vice/defect affects health or safety.
Delictual Obligations – lessee can assume liability for defects if person injured had right to be on premises from lessee and lessor neither knew or should have known of defect.
Lessor with knowledge of potentially harmful activitiy of tenant is liable for damages caused by the lessee.
Lessee’s Rights and Obligations
Lessee Changes Use or Misuses Property – lessor can get injunctive relief, dissolve lease, and recover damages
Failure to Pay Rent
i. Lessor may dissolve lease and regain possession of thing.
ii. If lessee abandons, lessor can retake and re-let as mandatary for lessee, but lease is not terminated and lessee is not relieved of obligations
Lessee’s Right to Sublease, Assign, or Encumber
i. Lessee can sublease, assign, or encumber unless expressly prohibited in the lease contract. Prohibiting one of these 3 does not prohibit the others.
1. Assignment of Lease = transfer of contract, assignee promises to pay rent to lessor, creates solidary obligors
2. Sublease – transfer of right of occupancy, but no promise to pay rent to lessor, no solidarity created.
ii. Lessor cannot abuse right to reject proposed assignment or lease, requires showing of intent to harm the other party.
Lessee’s Right to Improvements
i. Lessee may remove improvements he made but must restore thing to its former condition.
ii. If lessee doesn’t remove, lessor may either appropriate ownership and pay costs or enhanced value or demand removal within reasonable time and remove at lessee’s expense or appropriate ownership
