Leasing- Habitability and Transferring Interest Flashcards
Constructive Eviction (Fidelity v Kaminsky)
Test:
- Plaintiff had to show that Landlord intends for Plaintiff to no longer enjoy the
premises
* Landlord committed a material act/omission which substantially interfered with
Tenant’s use/enjoyment (Action and lack of action can be sufficient to show
constructive eviction).
* Landlord act or omission permanently deprived Tenant of use of premises
* Tenant abandoned premises w/in a reasonable amount of time after act/omission
JMB v Paolucci (no constructive eviction)
Rule- Constructive eviction results from a landlord’s failure to keep the premises in a tenantable condition (when the interference with occupancy is of such a nature
that the property cannot be used for the purpose for which it was rented)
Holding- Waiver. If the noise problem was so severe that Paolucci’s business could not
function, why didn’t he move out sooner? In fact, if Paolucci was willing to remain on the premises for four more years, how bad was the problem?
Constructive Eviction- Procedural Steps
- Tenant must first notify the Landlord
about the problem, give L. a reasonable period to fix, and then vacate
the premises. - Some states allow the tenant to remain in possession & recover
damages. This is also the position of the Restatement (Second) of
Property.
Implied Warranty of Habitability
Landlord must maintain “bare living requirements” and ensure the premises are “fit for human occupation.”
Remedies for tenants when there is implied warranty of habitability
- withhold rent
- repair and deduct (withhold rent and use the money to repair defects)
- sue for damages
- terminate the lease
Ernst v Conditt (assignment)
Why was this an assignment?
No reversionary interest created in Rogers (if there had been, that
would be evidence of a sublease)
* Conditt took on all of the covenants/obligations of the original lease.
* Privity of Estate between Ernst and Conditt.
* Conditt is paying rent to the Ernsts (original Landlord), not to Rogers.
* Labels in the transactional documents don’t necessarily matter
- Rogers “parted with” his interest in the property
Assignment v Sublease
Assignment:
-Transfer of lessee’s entire interest in rental property to assignee
* Privity of estate exists between LL and assignee
* Assignee can be liable to LL for covenant to pay rent and expenses associated with
lease termination
Sublease
- Transfer of interest whereby a tenant grants an interest in the lease premises less than
their own, or reserves to themselves a reversionary interest in the term.
* No privity of estate exists between LL and the sublessee
* Sublessee cannot be liable to LL for covenant to pay rent and expenses associated
with lease termination
Washington Law Consent to Assignment
The landlord shall approve or disapprove of the assignment of a rental agreement on the same basis that the landlord approves or disapproves of any new tenant, and any disapproval shall be in writing. Consent to an assignment
shall not be unreasonably withheld.
Consent to Transfer Leasehold
- Sole Discretion Clause: The lease may provide that Landlord may refuse
consent for any reason whatsoever in her “sole discretion.” - Reasonableness Clause: The lease might provide the Landlord may refuse
consent only on a commercially reasonable basis. - No standard in lease: The lease may require Landlord’s consent, but contain no
standard to guide Landlord’s decision. Silent consent clause, Kendall v. Ernest
Pestana, Inc. (Cal. 1985) (consent may be withheld only where the lessor has a commercially
reasonable objection to the assignment)
Kendall v Ernest Pestana
Issue: Whether, in absence of a provision that consent to the assignment will not be unreasonably
withheld, a lessor may unreasonably and arbitrarily withhold consent to an assignment?
Holding: Cal. adopts the minority rule, which holds that where a lease provides for assignment only
w/prior consent of the lessor, consent may be withheld only where the lessor has a commercially
reasonable objection to the assignment. In this case, there was no commercially reasonable
objection; the prospective occupant was in a better financial position than the existing
occupant/tenant
Test for Evaluating LL withholding of consent to transfer
- A landlord may withhold consent but must have a “commercially reasonable”
justification for doing so. - This might include:
- Financial responsibility of the proposed assignee
- Suitability of property for proposed use
- Legality of proposed use
- Need for alteration of premises
- Nature of the proposed occupancy
- This does not include:
- Personal taste
- Convenience to landlord (if no change in $ bottom line)
Ending Tenancy- What is abandonment?
Abandonment of the leased property by the tenant occurs when tenant
* (1) vacates the leased property w/out justification & w/out any present
intention of returning and
* (2) defaults in payment of rent.
Ending Tenancy- LL option after abandonment
- Sue for all rent (keep property vacant until end of lease term)
- Terminate lease
- Mitigate damages and sue tenant for rent unpaid during vacancy
Sommer v Kridel (LL mitigating damages)
What is the modern rule regarding a landlord’s options in the event of a tenant
abandonment?
* Terminate tenancy; or
* Mitigate damages and seek unpaid rent.
- LL didn’t mitigate damages. Landlord was unnecessarily delayed in trying to find a new
tenant
Security Deposit
- give back within 21 days
- cant be withheld for wear resulting from ordinary use
- court may in its discretion award up to two times the amount of the deposit for the intentional refusal of
the landlord to give the statement or refund due - the landlord shall have the right to proceed against a
tenant to recover sums exceeding the amount of the tenant’s damage or security deposit for damage to the property for which the tenant is responsible together with reasonable attorneys’ fees
Retaliatory Eviction
What does a tenant have to show to establish a retaliatory eviction defense?
* That LL took one of the prohibited acts in the retaliatory eviction statute and
* Tenant engaged in a protected activity;
* And but for tenant’s having engaged in protected activity, LL would not have taken
prohibited action.
Self Help Eviction (Berg v Wiley)
-the only lawful means to dispossess a tenant who has not abandoned nor
voluntarily surrendered but who claims possession adversely to a landlord’s
claim of breach of a written lease is by resort to judicial process.
- court here considers if there was sufficient evidence of abandonment/ surrender and if the reentry was peaceable
