MBE Property II: Landlord and Tenant & III. Land Sale K

Question 1

four types of LL/tenant estates

Answer 1

1. tenancy for years
2. periodic tenancy
3. tenancy at will
4. tenancy at sufferance

Question 2

tenancy for years (general)

Answer 2

estate measured by fixed / ascertainable amount of time

can be any length of time

Question 3

requirements for tenancy for years lease agreement

Answer 3

SoF applies if longer than one year. writing must include:
1. ID parties
2. ID premises
3. spec duration
4. states rent to be paid
5. signed by party to be charged

Question 4

how is it determined whether the SoF applies to a tenancy for years agreement?

Answer 4

most jx: when lease will commence in future, period of lease itself must exceed one year

most jx: when lease subject to option to renew, option is disregarded when considering SoF

Question 5

if lease subject to SoF fails to comply with it, it is invalid unless…

Answer 5

tenant takes possession of premises w/acquiescence of landlord - creates tenancy at will

if rent paid by tenant and accepted by LL, periodic tenancy

if tenant further makes substantial improvements to premises and thereby indicates parties contempl lease for more than a year, oral lease full effect

Question 6

most states recognize that ____ can give rise to right to terminate lease

Answer 6

breach of certain leasehold covenants (i.e., the tenant’s payment of the rent and the landlord’s covenants of quiet enjoyment and implied warranty of habitability)

Question 7

periodic tenancy

Answer 7

repetitive, ongoing estate measured by set period but with no predetermined end date

auto-renews at end of each period until one party gives valid termination notice

fixed by parties or determined by their actions

Question 8

periodic tenancy: what term would most jxs treat as the periodic tenancy term if lease states rent is specific amount for specific period, but also says a portion of rent is payable at intervals throughout the period?

Answer 8

the longer specific period (e.g. rented at annual rate of 12, payable at 10 on first of each month = annual lease)

Question 9

how can a periodic tenancy be created?

Answer 9

express agreement, implication (e.g. failure to mention termination date) or operation of law (e.g. holdover tenant)

Question 10

when does SoF apply to periodic tenancy?

Answer 10

only if initial term of tenancy > 1 year

Question 11

how is a periodic tenancy terminated?

Answer 11

b/c auto renews, notice is required
- gen must be given before beginning of intended final period of tenancy
- if year to year, notice at least six months in advance (many states less)
- oral notice ok under common law, but most states require written (tho may be only in certain cases)

Question 11

tenancy at will

Answer 11

leasehold estate w/o spec term, continues as long as LL and tenant desire

unless tenancy expressly created, rent payment and A by landlord converts tenancy at will into periodic

Question 12

ways to terminate tenancy at will

Answer 12

1. by either party
2. by operation of law upon death of either
3. b/c of waste or assignment by tenant
4. upon transfer or lease of prop to 3rd party by LL

Question 13

notice requirements for tenancy at will

Answer 13

common law: tenant had ot be given reas time to vacate
statutes now rq advance notice (e.g. 30 days)

Question 14

difference between tenancy at will and tenancy at sufferance

Answer 14

tenancy at will is by agreement of LL and tenant; at sufferance is by actions of tenant alone

Question 15

tenancy at sufferance (holdover)

Answer 15

exists for period after expiration of lease during which tenant remains on premises w/o landlord’s permission

terminated if vacate or LL evicts

Question 16

two duties of tenant

Answer 16

1. pay rent
2. avoid waste (may be modified by contract)

Question 17

two exceptions to duty to pay rent

Answer 17

destruction of premises
material breach by LL

Question 18

when is a tenant entitled to make changes to phys condition of leased property?

Answer 18

when changes increase property value, if reasonably necessary for tenant to use property in reas manner, unless LL and tenant agree otherwise

LLs usually rq advance permission

Question 19

operation of nonresidential lease requirement to repair and maintain

Answer 19

makes tenant gen liable for all damage to property unless caused by LL

modern trend if e.g. fire, and not caused by tenant, narrowly read tenant’s duty to repair to find that it does not cover such damage

Question 20

operation of burden of repair placed on tenant in residential lease

Answer 20

burden of repair generally void, but may be required to notify LL of need for repair

Question 21

what are the two main positions that apply to assessment of damages when a tenant fails to pay rent, wrt future rents?

Answer 21

majority rule: anticipatory repudiation does not apply to leases; LL not entitled to damages for future rents that would have been due

other states: damages measured by diff between future rent that would be owed under unexpired term and either (1) reasonable rental value of premises for such term or (2) actual rent collected on reletting of premises for such term (collects at most value by which future rents would have exceeded reasonable rental value for property)i

Question 22

if tenant unjustifiably abandons leasehold, they are treated as…

Answer 22

having made an offer to surrender their rights under the lease

Question 23

application of duty to repair in commercial leases

Answer 23

courts reluctant to imply duty to repair b/c implied warranty of habitability x apply in commercial leases

unless statute or contractual obligation says OT, landlord only duty to make repair if
(1) repair so substantial that it would not ordinarily fall w/in tenant’s common law repair duty, or
(2) value of repair would primarily inure to LL’s reversionary interest

Question 24

warranty of habitability

Answer 24

applies in residential leases

requires LL to maintain property such that it is reasonably suited for res use

Question 25

relationship between housing code requirements and warranty of habitability

Answer 25

LL’s failure to comply substantially w code does not auto-count as breach of warranty, but may serve as evidence of it

Question 26

if premises not habitable, what are tenant remedies?

Answer 26

1. refuse to pay rent
2. remedy defect and offset cost against rent
3. defend against eviction

usually must notify LL of condition and then give reas opp to correct

Question 27

if tenant is prevented from possessing or using portion of leased premises by a third party, how does this affect tenant’s rent obligation?

Answer 27

if third party has superior claim to property, tenant must pay reasononable rental value of premises occupied

if 3rd party adverse possessor or trespasser, tenant not excused from paying rent

Question 28

if landlord breaches a duty like failing to make a repair that substantially interferes w/ tenant’s use and enjoyment, how is rent affected?

Answer 28

if tenant gives notice and adequate time to permit landlord to fulfill his duty, and vacates property w/in reasonable time,

tenant’s ob to pay excused due to constructive eviction

Question 29

when is a transfer of a lease subject to SoF?

Answer 29

in most states - transfer of lease is subject to SoF if lease of same length as assignment or sublease would be

Question 30

difference in liability between assignee and sublessee

Answer 30

assignee is in privity of estate and thus liable to LL for rent and other covenants

sublessee however is not in privity and not liable to anyone except the lessee (unless expressly assumes the rent covenant)

Question 31

attornment

Answer 31

tenant’s acknowledgment of new LL

Question 32

tenant obligations to pay rent upon condemnation

Answer 32

if partial: tenant must continue to make rent payments, but entitled to compens for portion that was condemned / time he was dispossessed

if complete: discharged from rent obligation and entitled to takings compensation

Question 33

whose agent is a broker when:
broker facilities leasing of real property;
broker facilitates acquisition of mortgage loan?

Answer 33

1. typically LL’s agent
2. typically borrower’s agent

Question 34

If broker has a nonexclusive agency or if the listing agreement between the seller and broker does not address the issue of what is required of the broker to earn a commission, how is commis entitlement determined?

Answer 34

broker must be procuring cause for buyer’s purchase (i.e. sale must be induced primarily by those efforts)

Question 35

if agreement says broker has exclusive agency, when is broker entitled to commission?

Answer 35

when her effort, or effort of any other broker, is procuring cause for purchase

Question 36

if agreement says broker has exlcusive right to sell, broker is entitled to comis if …

Answer 36

efforts of anyone are procuring cause

Question 37

when does real estate broker typically earn their commission? any exceptions?

Answer 37

usually conditioned upon finding buyer who is RWA to purchase on terms agreeable to seller
entitled to comis when K of sale executed OR, if subj to conditions, when they are satis (even if no sale)

in minority of states, no comis if buyer defaults

Question 38

equal dignities rule

Answer 38

many states require K to pay commission to real estate agent/broker to be in writing b/c underlying K to sell property must be in writing

Question 39

requirements for valid deed

Answer 39

1. in writing, signed by grantor
2. contain description of property
3. identify grantee
4. contain words of transfer

Question 40

what acts may constitute evidence of part performance (to refute SoF claims)? how many are required?

Answer 40

1. payment of all/part of purchase price
2. possession by purchaser
3. subst improvement of property by purchaser

most jx require at least 2/3

Question 41

is writing required to enact rescission of contract for sale of real property?

Answer 41

most states say no

Question 42

When a party to an oral contract who has promised to convey real property performs, that party can enforce the other party’s oral promise unless the promise is itself the transfer of a real property interest.

Answer 42

?

Question 43

when must marketable title be delivered by a seller?

Answer 43

usually unless OT agreed, at closing (when ownership/deed transfers)

seller may apply proceeds from sale of property to mortgage

in installment land K, marketable title not rq to be given until delivery occurs

Question 44

5 examples of defects in title rendering it unmarketable

Answer 44

1. title acquired by AP that has not yet been quieted
2. future interests where the holders haven’t agreed to transfer
3. private encumbrance (mortgage, covenant, option, easement)
4. violation of zoning ord
5. significant phys defect

may be waived

Question 45

remedies for unmarketable title

Answer 45

1. buyer may rescind and recover OOP costs and earnest money payments
2. sue for breach
3. bring spec perform action with abatement of purchase price (e.g. price adjustment) - usually not until closing date

Question 46

closing date will usually not be treated as “of the essence” unless…

Answer 46

1. K spec states that it is
2. circumstances indicate this was intent of parties
3. one party gives other party notice that time is of the essence (reasonable time before closing date)

Question 47

if time is of the essence in a real estate K, what are buyer’s remedies if not delivered?

Answer 47

not considered rescission grounds, but may sue for spec perform
failure to render performance (whether time of essence or not) creates liability for damages such as taxes, interest etc

Question 48

implied warranty of fitness or suitability for new homes

Answer 48

replaces caveat emptor; warranty implied in almost all jx for newly constructed residence (and sometimes to repair or remodel of existing residence or related structures)

some states: similar to warranty of merchantability. focus on whether defect significantly affects ability of buyer to live in residence
some states: similar to warrant of habitability
(some states recog both)

Question 49

timing limitations for suit brought for breach of implied warranty of fitness/suitability

Answer 49

w/in reasonable time

if warranty statutory, fixed time usually specified

many have SoL run when buyer discovered or should have

statute of repose will control

Question 50

remedies for breach of land sale contract if breach from inability to deliver marketable title

Answer 50

general remedy: expec damages = K price - market value on date of perform

half jx: if seller acted in GF, buyer’s damages limited to buyer’s OOP expenses

may also recover incidental damages (like involved in title search)

Question 51

for a liquidated damages clause to be enforceable (permitting seller to retain deposit if buyer refuses to purchase), what is required?

Answer 51

that amount be reasonable; traditionally, deposit of no more than 10%

may also consider: sophistication of buyer and nature of transaction (commercial vs. res)

may refuse to enforce when seller suffers no actual loss

Question 52

doctrine of mutuality of remedies

Answer 52

seller permitted to seek specific performance and force buyer to purchase a real property interest; some courts rj b/c seller typically receives money, not real property

Question 53

equitable conversion doctrine

Answer 53

although seller retains legal title to real property during pendency of sales K, equitable title passes to buyer upon entering K; seller thus holds property in trust for buyer and has duty to keep up property

seller retains right to possess

does not apply if K not specifically enforceable

Question 54

who bears risk of loss during time between execution of K and closing? why?

Answer 54

follows doctrine of equitable conversion (b/c buyer is owner)

loss with buyer, unless attributable to seller’s intentional/negligent actions

see also minority adoption of Uniform Vendor and Purchaser Risk Act which keeps it w/seller (if material part of prop destroyed)

Question 55

When one of the contracting parties dies prior to the performance date of the contract, the seller’s interest may be treated as personal property and the buyer’s interest may be treated as a real property interest for the purposes of distributing the property pursuant to either’s will.

Question 56

When the seller-decedent has devised his real property interests, the proceeds from the sale of the property under contract are treated as personal property that passes to the devisee of the seller-decedent’s personal property. The devise of the real property itself is treated as having been adeemed. In jurisdictions that have adopted an anti-ademption statute, the devisee of the seller-decedent’s real property is entitled to the sale proceeds.