Leasehold Estates

Question 1

When is the tenant’s duty to pay rent to the landlord suspended?

Answer 1

1. The premises are destroyed (so long as the tenant did not cause the damage)
2. The landlord completely or partially evicted the tenant
3. The landlord materially breached the lease

Question 2

What are the requirements of a constructive eviction?

Answer 2

1. The landlord breached a duty to the tenant (can be contractual or implied) AND
2. The breach caused a loss by the tenant of substantial use and enjoyment of the property AND
3. The tenant gave the landlord adequate notice and opportunity to repair AND
4. The tenant vacated the leased property within a reasonable amount of time

Question 3

What is the implied warranty of habitability?

Answer 3

Requires landlords to maintain their property in a way that is reasonably suited for basic human needs.

The tenant CANNOT waive this warranty.

Question 4

What can the tenant do if the landlord breaches the implied warranty of habitability? Which types of property does it apply to?

Answer 4

1. Vacate the premises and terminate the lease OR
2. Withhold or reduce the rent OR
   * if the tenant withholds rent, they must first notify the landlord and give them reasonable opportunity to correct the problem
3. Remedy the defect and offset the costs against the rent OR
4. Defend against eviction

It applies to residential leases ONLY.

Question 5

What is the implied covenant of quiet enjoyment? Which types of property does it apply to?

Answer 5

Prevents the landlord from taking action to make the premises wholly or substantially unsuitable for the tenant’s intended purposes. (Residential AND commercial)

If the tenant is constructively evicted, the implied covenant of quiet enjoyment is also breached.

Question 6

If a tenant wrongfully vacates a leased property with the intent to terminate the lease, what can the landlord do?

Answer 6

1. Accept the tenant’s surrender and terminate the lease OR
2. Hold the tenant to the terms of the lease (resulting in abandonment)

Question 7

What is a term of years?

Answer 7

An estate that lasts for some fixed period of time.

It must be for a fixed period of time, but may be terminable earlier if a specified event occurs.

It AUTOMATICALLY terminates, without notice, when the term expires.

Death of a party has no effect on the duration.

Question 8

What is a periodic tenancy?

Answer 8

A repetitive and ongoing interest that is automatically extended for a set period of time until it is terminated by proper notice from either party.

Ex: a month-to-month lease

Death of a party has no effect on the duration.

Question 9

Is intent required for the creation of a periodic tenancy?

Answer 9

Yes, it may either be express (a specific term in the contract) or implied (ongoing payment of rent)

Question 10

What is required for proper notice of termination of a periodic tenancy?

Answer 10

The terminating party must give notice before the START of what will be the last term.

Notice is usually the length of one period.

Notice is effective on the last day of the term / a term cannot be terminated in the middle.

Ex: Tenant in a month-to-month lease gives notice on June 11th. It will be effective on July 31st. It must be BEFORE the start of the term, AND at least 1 month in advance. Since notice isn’t effective until the last day of the term (June 30th), termination wont be until the last day of the next month (July 31st).

Question 11

What is a tenancy at will?

Answer 11

A tenancy with no fixed period that endures so long as both tenant and landlord desire.

Question 12

Is intent required for the creation of a tenancy at will?

Answer 12

Yes, it may either be express (a specific term in the contract) or implied (ongoing payment of rent at will)

Question 13

How may a tenancy at will be terminated?

Answer 13

1. When either party chooses
   * If the lease provides that the tenancy can be terminated at the will of the landlord, it necessarily can also be terminated at the will of the tenant. BUT a tenancy can be terminated at the will of the tenant and NOT the landlord.
2. The death of either party

Notice is NOT required.

Question 14

What is a tenancy at sufferance (holdover tenancy)?

Answer 14

When a tenant refuses to vacate the premises after his lease has terminated.

Question 15

What is the result of a tenancy at sufferance? How is it ended?

Answer 15

The terms of the prior lease control until:

1. The landlord evicts the tenant (plus damages)
2. The landlord consents (express or implied) to the creation of a new tenancy
3. The tenant voluntarily vacates

Question 16

What is an assignment of a lease?

Answer 16

A complete transfer of the tenant’s entire remaining term under the lease.

Question 17

What is a sublease?

Answer 17

A transfer of less than the tenant’s entire remaining term under the lease.

Question 18

Who can the landlord collect rent from in an assignment?

Answer 18

The assignee (privity of estate) OR the original tenant (privity of contract)

Question 19

Who can the landlord collect rent from in a sublease?

Answer 19

ONLY from the original tenant (privity of estate and privity of contract).

The sub-tenant ONLY has rent obligations to the original tenant (privity of estate and privity of contract).

Question 20

What is privity of contract?

Answer 20

When a landlord and tenant agree to terms in a lease.

This relationship allows each party to enforce the contract against the other.

Question 21

What is privity of estate?

Answer 21

When a landlord and tenant both have an interest in the same real estate.

Question 22

What is a consent clause in a lease?

Answer 22

A provision that prohibits assignment without the lessor’s approval.

Considered a restraint on alienation, but allowed more freely, within reason.

Question 23

What is subrogation?

Answer 23

A theory of recovery that allows one party to step into the shoes of another party to assert rights that party has against another.

Ex: L is a landlord and rents to T. T subleases to T2. T can file a claim on behalf of L through subrogation.

Question 24

What is a default?

Answer 24

When a tenant fails to pay rent or observe other lease obligations/

Question 25

What is self-help?

Answer 25

When the landlord uses methods to retake property from a tenant in possession when the tenant defaults on the lease.

Question 26

Is self-help allowed when a tenant defaults?

Answer 26

Common law: yes, as long as they use no more force than necessary

Modern approach: self-help is highly discouraged and requires legal entitlement to possession AND peaceable reentry

Question 27

What is surrender?

Answer 27

An agreement by the landlord and tenant to prematurely terminate the tenancy. (“Express surrender”).

Surrender relieves the tenant from liability for future rent (but they still must pay past-due rent).

Question 28

What is abandonment? (an “implied surrender”)

Answer 28

When the tenant defaults on the payment and vacates the property without justification and without any present indication to return.

Ex: returning the keys to the landlord is evidence of the tenant’s intention not to return to the leased premises

Question 29

Does a landlord have a duty to mitigate damages when a tenant abandons the leased property?

Answer 29

Traditional view: no duty to mitigate

Modern approach: duty to mitigate
* vacant stock idea: the landlord must make at least the same effort to rent the abandoned premises as he makes to rent other vacant units