Leasehold estate (Lease and Joint Posession)

Question 1

What are concurrent Estates?

Answer 1

An Estate of Land that is held concurrently by several persons, all of whom have the right to enjoyment and possession of the land

1. Joint Tenancy (right of survivorship)
2. Tenancy y the Entirety (spouses)
3. Tenancy in Common (default, no right of survivorship)

Question 2

Tenancy in common (Definition)

Answer 2

An estate with multiple tenants in which each co­tenant owns a distinct, undivided interest and each has a right to possession of the whole estate. No right of survivorship.

• Freely transferable - each interest is freely descendible, devisable, and alienable
• Co-tenants only share the right to possession
• No survivorship rights - a co-tenant’s interest can be transferred to heirs upon her death (not the other tenant)
• Partition - a co-tenant can force partition at any time and take sole ownership of her share in the estate while the remaining parties hold their interests as tenants in common
• Modern law favors tenancy in common; it is the default concurrent estate

Question 3

Joint Tenancy (definition and note)

Answer 3

The holding of an estate or property jointly by two or more parties, the share of each passing to the other or others on death.

• Express intent required- granter must expressly intend to create a JT; otherwise, a tenancy in common is presumed
• Right of survivorship- if one JT dies, surviving JTs automatically take equal possession of deceased JT’s share
• Transferability- alienable, but not devisable or descendible

Question 4

Joint Tenancy Creation Requirement (T-TIP)

Answer 4

Four conditions must concurrently exist when the tenants take their interests:

1. Time – JTs must take their interests at the same time
2. Title - JTs must receive their conveyance through the same instrument
3. Interest - JTs must take equal and identical interests
4. Possession - JTs must have equal possessory rights

Question 5

Joint Tenancy Severance (Effects and ways to do it)

Answer 5

Severance - severance by any JT creates a tenancy in common with respect to the severed interest

• Transfer of interest- a JT interest becomes a tenancy in common upon transfer; this does not destroy the entire JT if two or more JTs remain
  
  • Intervivos Conveyance (testamentary disposition doesn’t have effect)
• Mortgage rule - lien theory (majority) vs. title theory (minority)
  
  • Lien theory Jx - JT can take a mortgage on her interest without severing JT (b/c no title passes to mortgagee)
  • Title theory Jx- JT is severed if any JT takes a mortgage on her interest b/c title passes to the mortgagee

Question 6

Tenancy by the entirety (creation and definition)

Answer 6

Marital estate, similar to JT, but between a married couple

• Creation - created by conveyance to a married couple and requires the same four conditions as a JT ( T-TIP: time, title, interest, possession)
• Spouses are co-tenants; tenancy by the entirety is presumed in any conveyance made jointly to a married couple

Question 7

Tenancy by the Entirety characteristics

Answer 7

• Right of survivorship- property automatically passes to surviving spouse
• No right of partition- one spouse may not unilaterally convey her interest; attempt to do so is invalid and will not destroy the tenancy
• Protected from creditors- creditors of one spouse cannot reach that spouse’s interest; only creditors of the couple (i.e., joint creditors) can reach a tenancy by the entirety
• Destruction of the marriage severes the Tenancy

Question 8

Severance Tenancy by the Entirety

Answer 8

Severance - four ways a tenancy by the entirety can be severed, which creates a tenancy in common:

1. Death of one co-tenant
2. Mutual agreement of the parties in writing
3. Issuance of a divorce decree
4. Execution by a joint creditor (e.g., foreclosure)

Question 9

Co-Tenant’s rights & Duties (Rules) (easy)

Answer 9

1. Possession - each co-tenant has rights to possess the whole
2. Rent from a co-tenant in exclusive possession- a co-tenant in exclusive possession is not liable to co-tenants for rent
3. Rent from third parties - a co-tenant leasing premises out must account to co-tenants for their share of rental income
4. Adverse possession- tenants may not acquire title to the exclusion of co-tenants through adverse possession
5. Carrying costs- each tenant is responsible for his fair share of taxes, interest, etc.
   
   1. Repairs: A co-tenant that paid for repairs is entitled to require a contribution from the others, provided he notified the need for repairs.
   2. Improvements: No right of contribution between co-tenants
   3. Taxes and Mortgages: Contribution can be demanded for taxes and mortgages payments

Question 10

Co-Tenant’s rights & Duties (Rules) (hard)

Answer 10

• Repairs - co-tenants may seek contribution for reasonable repairs, but must inform co-tenants before making repairs
• Improvements - no right to contribution for improvements; but co-tenants are entitled to credit for an increase in value attributable to the improvement (and also liable for any resulting loss)
• Waste - a co-tenant can bring an action for waste against another co-tenant during the life of the tenancy
• Partition/forced sale - JT’s and tenants in common may bring an action for partition, or seek a forced sale and apportion the proceeds

Question 11

What are the leasehold estates?

Answer 11

An estate in which the tenant has a present possessory property interest and the landlord has a future interest (reversion)

Four leasehold estates:

1. Tenancy for years
2. Periodic Tenancy
3. Tenancy at Will
4. Tenancy at Sufferance

Question 12

Tenancy for years

Answer 12

• Lasts for a fixed period of time
• Requires a definitive beginning and end date
• If duration is longer than one year, lease must be in writing (required under SoF)
• Terminates automatically at the end of the fixed period (No notice is required)
• Also referred to as ‘‘estate for years,” ‘‘term for years,” or ‘‘fixed term tenancy’’

Question 13

Periodic Tenancy, definition and creation

Answer 13

A type of leasehold estate. A leasehold that is continuous for successive intervals (e.g., weeks or months) until either party gives notice of termination.

Creation - can be express, implied, or by operation of law

1. Express agreement - conveyed to tenant for agreed interval
2. Implication - a lease that does not specify duration, but provides for rent to be paid at set intervals
3. Operation of law - two situations:
   
   • Invalid lease - if tenant takes possession despite an invalid lease (e.g., lease violates SoF), periodic tenancy arises upon landlord’s acceptance of payment (Period of the tenancy is determined by the period the payment covers)
   • Holdover tenant - if landlord accepts rent from a holdover tenant, a periodic tenancy arises for the period the payment covers

Question 14

How Periodic Tenancy ends

Answer 14

Termination - tenant must give proper notice, which requires:

1. Sufficient time - tenant must give notice one full period in advance; year-to-year tenancies require six-month notice
2. Effective date - effective date of termination must be at the end of the period of the tenancy

• Note - parties can agree to modify these requirements

Question 15

Tenancy at will (Creation)

Answer 15

A tenancy with no fixed duration, terminable by either party at any time without notice

Creation- express agreement. Without an express agreement, courts will treat the lease as an implied periodic tenancy

Question 16

Termination of Tenancy at Will

Answer 16

Termination- by will or operation of law

• By will- either party can terminate the lease at any time without notice, but a reasonable demand to vacate the premises is usually required
• By operation of law- occurs upon any of the following:
  
  1. Death of either party
  2. Waste by the tenant
  3. Assignment by the tenant
  4. Transfer of title by the landlord
  5. Lease by the landlord to a third party

Question 17

Tenancy at Sufferance

Answer 17

A default tenancy that arises when a tenant continues to possess property after the lease expires (i.e., a holdover tenant)

Creation - tenant holds possession beyond lease expiration. The expired lease’s terms and conditions automatically carry over to the tenancy at sufferance

Exception - imposing new periodic tenancy must be reasonable. It is unreasonable:

• Tenant only remains in possession for a few hours
• Tenant is not at fault for delay in vacating (e.g., illness)
• Seasonal leases (e.g., ski cabin, beach house)

Question 18

What options a landlord have in a Tenancy at Sufferance?

Answer 18

Landlord options:

1. Sue to evict, or
2. Impose a new periodic tenancy
   
   • Raised rent- landlord can demand higher rent for both the holdover period and any new periodic tenancy if he gave notice of the increase before the lease expired
   • Commercial leases- if expired lease was for one year or longer, the new periodic tenancy can be year-to-year

Question 19

When imposing new periodic tenancy is not reasonable?

Answer 19

Exception - imposing new periodic tenancy must be reasonable

• New periodic tenancy is unreasonable if:
  
  • >> Tenant only remains in possession for a few hours
  • >> Tenant is not at fault for delay in vacating (e.g., illness)
  • >> Seasonal leases (e.g., ski cabin, beach house)

Question 20

What are the Tenant’s Duties At Common Law

Answer 20

• Duty to repair
  
  • ​Tenancy must maintain premises and make ordinary repairs (except implied warranty of habitability)
  • Tenant must not commit waste: 1) Voluntary; 2) Permissive; 3) Ameliorative
• Duty to pay rent- tenancy at sufferance arises upon breach
• Duty to not use property for illegal purposes if tenant uses premises for an illegal purpose, landlord may terminate lease or obtain damages and injunctive relief (Occasional, minor illegal activities do not constitute a breach)

Question 21

Third-party accident on-premises, who is liable, tenant or landlord?

Answer 21

Liability to third parties (in tort):

• Tenant is liable for injuries sustained by third parties invited by tenant (even if IandIord promised to make repairs)

Question 22

What happens to tenant when premises are destroyed? (Waste theory)

Answer 22

Destruction of premises with no fault of either party:

• Common Law: tenant held liable for any loss, need to pay rent
• Modern Law: tenant can terminate lease

Question 23

Fixtures (definition) and characteristics

Answer 23

Once-movable chattel that is annexed (i.e., attached) to real property, indicating an intent to permanently improve property (E.g., heating systems, lighting installations)

Characteristics:

• Fixtures pass with ownership of the land
• Tenant installation qualifies as a fixture if there is an express agreement between the landlord and tenant
  
  • >> If no agreement, tenant may remove the chattel that tenant installed as long as removal does not cause substantial harm to the property

Question 24

What happens when a tenant removes fixtures?

Answer 24

• If tenant removes fixtures, he commits voluntary waste

Question 25

Landlord remedies for tenant breach (options)

Answer 25

If tenant breaches his leasehold duties, landlord’s options depend on whether tenant retains possession (i.e., remains on premises)

Tenant retains possession- landlord may:

1. File for notice of eviction, or
2. Continue the lease and sue for rent due

Tenant abandons premises- landlord may:

1. Surrender- treat the abandonment as tenant’s surrender and accept it, releasing the tenant from the lease,
2. lgnore (minority rule)- hold tenant liable for unpaid rent, or
3. Re-let (majority rule) - lease premises to new tenants and hold the breaching tenant liable for any losses

Question 26

Landlord remedies for tenant breach (limitation and notes)

Answer 26

No self-help – landlord may not engage in self-help upon tenant’s breach (e.g., forcibly removing tenant or tenant’s belongings, changing locks, etc.)

Security deposit - required at beginning of most leases to secure landlord against damages and/or abandonment

• Landlord must return deposit to tenant once lease terminates
  
  • >> Landlord may subtract damages she has suffered

Retaliatory eviction - landlord is prohibited from retaliatory eviction if a tenant lawfully reports housing code violations

Question 27

What are the Landlord duties to the Tenant

Answer 27

Landlords have the following implied duties to tenant:

1. Duty to deliver possession
   
   • Majority - actual possession: Landlord must deliver physical possession to tenant
   • Minority - legal possession (i.e., right to possess): New tenant is responsible for any holdovers on property
   • Tenant’s remedy for breach= money damages
2. Implied covenant of quiet enjoyment
3. Implied warranty of habitability
4. Tort liability

Question 28

Implied covenant of quiet enjoyment

Answer 28

A tenant has an implied right to quiet use and enjoyment of the premises, without interference from the landlord (Breach may occur by actual or constructive eviction)

• Actual eviction - landlord wrongfully evicts or excludes tenant from property
• Constructive eviction - landlord’s actions or inactions render the property uninhabitable

Question 29

Constructive eviction elements (Quiet enjoyment implied covenant)

Answer 29

SING

Elements:

1. Substantial interference- major and/or chronic problems (e.g., leaky roof);
2. Notice- tenant must inform the landlord and give him a reasonable opportunity to repair; landlord must fail to act meaningfully; and
3. (Goodbye) Vacate- tenant must vacate within a reasonable period after the landlord fails to repair

Question 30

Implied covenant of warranty of habitability

Answer 30

Residential property must be fit for basic human dwelling
Characteristics:

• Residential only – not applicable to commercial leases
• Absolute duty- cannot be modified by lease terms
• Local code or case law specifies the standard for a breach
  
  • E.g., no heat in winter, no plumbing, no water, etc. are types of problems that could give rise to violation of the implied warranty of habitability

Question 31

What are the Tenant remedies for a landlord breach of warranty of habitability?

Answer 31

M3R

Tenant’s remedies for landlord breach - tenant can:

1. Move - vacate premises and terminate the lease
2. Repair - make reasonable repairs and deduct costs from future rent
3. Reduce or withhold rent- reduce rent or stop payment until a court determines the fair rental value given the breach
   
   • >> Tenant must place withheld rent in escrow
4. Remain - remain in possession and seek money damages

Question 32

When is a landlord tort liability to tenant

Answer 32

A landlord may be liable for injuries occurring on leased property if CLAPS

• C: Common Areas
• L: Latent Defects
• A: Assumption of repair
• P: Public Use
• S: Seasonal

Question 33

CLAPS explained

Answer 33

CLAPS gives you the element of tort liability of a tenant

1. Common areas - duty of reasonable care
   * Landlord must exercise reasonable care in maintaining and repairing common areas (e.g., hallways, stairs)
2. Latent defects - duty to disclose
   
   • Landlord has a duty to disclose hidden defects he should reasonably know of
3. Assumption of repairs - negligence standard
   
   • Landlord is liable for harm caused by negligent repairs he chooses to undertake
4. Public use - landlord is liable for known defects if he knows the property is for public use and tenant is unlikely to repair
   
   • E.g., concert hall, convention center
5. Seasonal or short term lease of a furnished dwelling
   
   • Landlord is liable for defects that cause harm to tenant

Question 34

Assignment & Subleases notion and provision interpretation

Answer 34

Unless restricted by lease terms, a tenant may transfer her leasehold interest in whole (assignment) or in part (sublease)

Assignment/sublease provisions - construed against landlord

• Lease provisions restricting assignment or sublease are enforceable, but generally construed against landlords
• Once landlord gives a tenant permission to assign or sublet. such provisions are thereafter waived

Question 35

Assignment of leases rules (who has privity of estate and of contract?)

Answer 35

Assignment - entire leasehold transfers from tenant to assignee

• Assignee is in privity of estate with landlord- the two are bound by all covenants that run with the land
• Assignor remains in privity of contract with landlord
• Assignee owes rent directly to landlord, but assignor may be held liable for unpaid rent

Question 36

Subleases of leases (who has privity of what)

Answer 36

Sublease - partial leasehold transfers from sublessor to sublessee

• Sublessor is in privity of estate and contract with landlord (i.e., relationship between tenant and landlord is unchanged)
  
  • >> Sublessee pays rent to sublessor as her tenant
• Sublessee is not liable to landlord for rent and is not bound by any covenants unless expressly assumed