Leases Flashcards
What are the substantive elements of a lease?
Consent - handshake is ok
A thing - (types of leases)
Rent - can be certain or determinable
Term - fixed or indeterminate
What is the public records doctrine?
Governs the effect of recorded and unrecorded rights on third parties. Under this doctrine, a lease must be recorded in the public records to be enforceable against third parties who are not a party to the lease agreement.
Does a lease (even if immovables), have to be oral or written between parties?
It can be either.
What are potential legal troubles with oral leases?
The agreement cannot be filed, thus is not effective against third parties.
It is in the best interest of the lessor and the lessee to file in the conveyance records office.
(Transfer of the leased thing does not terminate the lease. Lessor
may be liable for any loss the lessee sustains due to the transfer of the property where there is an unrecorded lease).
What is “recorded notice of a lease” and its significance?
Recorded Notice of a Lease refers to the act of filing a lease (or a sufficient notice of its existence) in the public records to provide third parties with constructive notice of the lease’s terms. This is crucial under Louisiana’s Public Records Doctrine, which states that unrecorded rights in immovable property (real estate) do not affect third parties.
What are the 5 requirements of recorded notice under the PRD?
1) the names,
addresses and signatures of the parties;
(2) dates of execution;
(3) a brief description of the leased property
(4) the term;
(5) a reference to the existence of
an option, right of first refusal, or other agreement of the lessor to transfer the
leased premises
What are the exceptions to the public record doctrine?
An unrecorded lease of an immovable may be enforced against a third person who
acquires ownership of the immovable in either of the following circumstances:
(1) when the purchaser either assumes the lessor’s obligations under the lease or purchases the
thing “subject to” unrecorded leases. In such a case, the purchaser ceases to be a “third person” entitled to the protection of the public records, and
(2) when the purchaser
accepts rent from the lessee of an unrecorded lease and the lessee remains in possession after the sale. In such a case, the purchaser is said to have “ratified” the unrecorded lease.
Types of Leases
Residential
Agricultural
Commercial
Mineral
Consumer
How to determine the type of lease based on facts.
Depending on the agreed use of the leased thing,
Alease is characterized as:
Residential, when the thing is to be occupied as a dwelling;
Agricultural, when the thing is
a predial estate that is to be used for agricultural purposes.
Mineral, when the thing is to
be used for the production of minerals;
Consumer, a contract in which a lessor (such as a dealership or leasing company) grants a lessee (consumer) the right to use a good for a set period in exchange for periodic payments. The lease is primarily for personal, family, or household use rather than business purposes.
Commercial - business trade, or professional purposes.
** Predominant purpose rule**
Ownership and implication on leases things.
Generally, a lease of a thing that does not belong to the lessor is nevertheless binding
on the parties. Because the lessor must warrant the lessee’s peaceful possession, a non-owner lessor might breach the lease if the lessee’s possession is disturbed by the owner of the thing.
Duration of lease
Fixed or
Indeterminate
A lease does not need to contain a precise term to be valid.
If parties do not agree to a term, the law may supply one.
The term may be fixed or indeterminate.
● A term is fixed when it is tied to a designated date or occurrence of an
uncertain event.
● A term is indeterminate when it depends upon the will of the parties
Limit on contractual freedom rule
The duration of a term may not exceed 99 years.
However, a lease providing for an initial term that exceeds 99 years is not invalid for
that reason alone. Its term will be reduced by operation of law to 99 years.
What is a lease with an indeterminate term?
A lease is indeterminate when it depends upon the will of the parties subsequently expressed.
** A lease with an indeterminate term cannot be reconducted, it continues until it is terminated.**
Effect of indeterminate term on different kinds of leases?
Agricultural Lease with an indeterminate term is deemed year to year.
- Non agricultural lease of an immovable or a residential lease of a movable is
deemed month to month. - Non-residential lease of movables is deemed day-to-day. C.C. ART. 2680
What is tacit reconduction?
The automatic renewal of a lease when neither the landlord nor the tenant takes action to terminate it before the lease expires. This concept is governed by Louisiana Civil Code Article 2721 and applies to both residential and commercial leases.
Checklist ct. uses to determine tacit reconduction
If the lessee remains in possession for a certain period of time after the expiration of the term, and without notice to terminate or other opposition by the lessor.
● That period of time varies depending upon the initial term of the lease.
● Occurs when the following term periods are met:
○ 30 days for agricultural leases
○ 1 week for nonagricultural leases
○ 1 day for leases with fixed terms of equal to or less than one week.
What is the effect when a lease is reconducted?
The law supplies a new indeterminate term for the lease.
● All other provisions of the lease continue.
● Continues on an annual basis until a party terminates it by notice
○ Agricultural leases are extended year-to-year
○ Non-agricultural leases are extended:
■ Month-to-month when the lease term is a month or longer
■ Day-to-day when the lease term is between a day and a month
■ Periods equal to the expired term when the lease is for less than a
day
