Pg 21 Flashcards
What are the common law and modern rules under a tenancy for years regarding how rent accrues?
– Common law: Landlord can only sue for rent as it accrues, so have to wait for the period to pass to get full rent, or go to court every six months to sue for rent of the previous six
– today: lease is a contract, so anticipatory repudiation applies. Landlord is entitled to payment immediately of the rest of the rent.
If somebody stops paying rent, how does the duty to mitigate apply?
While modernly a landlord is entitled to payment immediately of the rest of the rent because of an anticipatory repudiation, that also triggers the landlord’s duty to mitigate. This means the landlord owes an affirmative duty to make reasonable efforts re-rent the premises, and the tenant is liable for the difference between the amount of the rent in the lease and the rent received by the landlord in mitigation.
If the landlord’s efforts to mitigate fail, the tenant is liable for the amount of the lease less what could’ve been earned through reasonable mitigation
If there was a fight over rent in a periodic tenancy, what is the landlord entitled to?
The rent that is due until the notice period runs
If there is a fight over rent in a tenancy at will, what happens?
The rent is whatever was in the lease that hasn’t been paid, so anything that has not yet been paid, the landlord can sue for
What happens if there’s a fight over rent in a tenancy at sufferance?
Technically if a tenant pays rent and the Landlord accepted it at any point during a tenancy at sufferance, it turns into a periodic tenancy. So rent is the same as the expired lease.
For a true tenancy at sufferance, not one that has turned into a periodic tenancy, if there is a fight about rent, what happens?
Rent is a reasonable rental value of the property until the landlord succeeds in evicting the tenant. If rental values have increased from their original amount, the tenant pays a reasonable value
What are the landlord’s duties in relation to the condition of the premises?
– common-law: if there is no express agreement, then there’s no obligation to maintain the premises once the tenant takes possession
– modernly: there is an implied warranty of habitability to maintain the premises in a habitable condition
What are the tenant’s duties in relation to the condition of the premises?
– Common law: there is no direct obligation to maintain the condition of the premises, the tenant just has to avoid waste
- modernly: there are rules on voluntary waste, permissive waste, and ameliorative waste
Modernly what are the tenant’s duties in relation to waste?
- voluntary waste: The tenant has a duty to prevent waste to the premises, and he cannot intentionally or negligently damage the property. He needs the landlord’s consent to remove natural resources.
- permissive waste: He also has to avoid permissive waste by taking reasonable steps to guard against damage to the property.
- ameliorative waste: He cannot alter the property without specific authorization from the landlord, even if it improves the property or increases the value.
If a tenant begins removing natural resources from the property without getting the landlord’s permission, what can the landlord do?
He cannot terminate the lease, but he can get injunctive relief to stop the removal
If a tenant doesn’t put in storm windows during hurricane season, is that considered to be waste?
Yes, that would be permissive waste
If a tenant doesn’t put in storm windows during hurricane season, and extra damage is caused because of it, what is the tenant liable for?
He’s liable for the extra damage because of the permissive waste
If a tenant alters property without being authorized by the landlord, but it improves the property and increases its value, what is the tenant responsible for?
The tenant can be forced to pay to restore the property to its original condition
When a lease is formed, possession transfers to whom?
The tenant.
If a landlord wishes to retake possession before termination of the lease, what must he do?
He must establish breach of the lease
What is considered to be a material breach of a lease?
Habitually failing to pay rent, regularly having noisy parties that disturb other tenants.
What happens if a tenant materially breaches a lease?
If a tenant has materially breached the lease, the landlord can treat the lease as ended and can retake possession
If there is a fight over possession of the land, how does common law and the modern approach deal with that?
– Common law: the landlord can use reasonable force to retake possession after a material breach
– modernly: the LL cannot use any force to retake possession, but he can use the legal process. He must give notice to the tenant to cure or quit, there must be a formal hearing to see if a breach was present, and if so, the tenant is evicted.
What are the two different approaches to anytime there’s a fight over improvements to the land between the landlord and the tenant?
– common law: anything attached to real property is a fixture, and at expiration it stays on the property. Although this can be rebutted by an express agreement or a trade fixture
– modernly: anything the tenant affixes to the property can be removed at the expiration of the lease if it leaves the property in substantially the same condition as when the tenant arrived.
What is the exception for trade fixtures under the common-law approach to a fight between a landlord and tenant over improvements?
Anything that the tenant affixes to the property as part of his trade or profession can be removed unless it would cause substantial damage the premises. The same is true if it was installed for the tenant’s exclusive benefit (then he must fix any damage from removal).
Modernly what is the presumption for structural changes when there’s a fight over improvements between the landlord and the tenant?
The presumption is that structural changes stay on the land because they cannot be removed and still leave the land in the same condition
If an item is going to be removed because it belongs to the tenant, when must that happen?
Before the lease expires. Although the tenant can remove things after expiration if he didn’t have reason to know that the lease would be ending. In that case he’s given a reasonable time to remove them
What is a forfeiture clause?
A clause that gives one party the power to terminate the lease under certain conditions
What is required for a termination of the lease to happen?
The party that has the power must exercise it unequivocally. Landlord can do this by entry or court action for possession by notice.
Why do courts not like to terminate a lease?
Because they see it as a forfeiture
What are the four major limits on termination of leaseholds?
– Waiver
– estoppel
– summary eviction statutes
– duty to mitigate
How is waiver a limit on termination of leasehold?
If there’s a breach by the tenant that the Landlord knew about and he accepted rent after the breach, then there is no termination. Accepting the rent waived the power to terminate. Waiver only applies to breaches that have already happened, not later repetitions of the same breach
How is estoppel a limit on termination of leasehold?
The party with the power of termination can be estopped when:
– the tenant makes forbidden alterations and the landlord says nothing or helps
– the benefitted party repeatedly tolerates the other’s late performance, and when the next one is late, they must allow a grace period similar to the previous tolerations unless they gave notice that it wouldn’t be accepted anymore beforehand
What are some factors to decide if estoppel will be a limit on the termination of a leasehold?
If there was a large monetary loss from a forfeiture, if it was a slight breach, if there was a previous good track record, if the person was acting in good faith, if the other party is taking advantage, if they were repeated defaults in payment, etc.
Finish this saying, “equity abhors what?”
A Forfeiture
How can a summary eviction statute be a limit on termination of a leasehold?
Every state has a statute that allows a landlord to evict a tenant if he breaches covenants as long as notice is given in a prescribed manner requiring cure/vacating.
Usually notice must be given between three and 10 days beforehand.
- If the tenant vacates, termination happens.
- If not, a summary action for possession is brought for back-rent and penalties. If rent is unpaid, tenant is liable to be put in unlawful detainer
What is the duty to mitigate upon termination of a leasehold?
- Majority: there is no need for mitigation and the landlord can do nothing and still keep the lease going
– strong minority: the landlord must re-let and mitigate damages
Under the strong minority position that requires a duty to mitigate by the LL upon a T’s breach, if the landlord relets the property, how does that work?
The leasehold is not terminated and the tenant is liable for loss of rent and the reasonable expenses of re-letting.
The landlord gets the difference between the agreed rent and the fair market value for the rest of the leasehold term after surrender. The LL can only get damages that he couldn’t avoid with reasonable diligence by re-letting the premises
Under the strong minority position that requires a landlord to mitigate if a tenant breaches a leasehold, what happens if the landlord acts for his own account?
The leasehold is terminated and the tenant’s liability ceases. The following things alone do not create termination: the landlord accepts back the keys, he enters the premises, advertises for rent, cleans, makes alterations, relets because it is necessary for the tenant’s account
If under the minority position a landlord does not use reasonable diligence to mitigate once a tenant breaches a leasehold, what happens?
The landlord is limited to the difference between what he would have gotten with reasonable diligence to mitigate and the tenant’s rent. If he does relet, recovery is what he would’ve gotten had the lease been performed less the net value of what he did get from reletting. The burden is on the breaching party to prove that the landlord failed to use reasonable diligence to mitigate the loss and must prove a lack of good faith. If the tenant cannot show this, it is presumed that the landlord acted in good faith
What are the different types of termination of a leasehold?
– surrender – merger – expiration of Landlord‘s estate – death of a party – destruction of building – frustration purpose – serious breach
