Property Flashcards
Leasehold
A leasehold is an estate in land, under which the tenant has a present possessory interest in the leased premises and the landlord has a future interest (reversion).
Tenancies for Years
A tenancy for years continues for a fixed period of time. A tenancy for years is usually created by written leases. Under the Statute of Frauds, a writing is required if the lease is for more than one year. A tenancy for years ends automatically at its termination date. In most leases, the landlord reserves a right of entry, which allows him to terminate the lease if the tenant breaches any of the lease_s covenants. A tenancy for years may also terminate if the tenant surrenders the tenancy and the landlord accepts.
Periodic Tenancies
A periodic tenancy continues for successive periods until terminated by proper notice by either party. A periodic tenancy can be created by (i) express agreement, (ii) implication, or (iii) operation of law. A periodic tenancy is automatically renewed until proper notice of termination is given. Usually, the notice must be one full period in advance and timed to terminate the lease at the end of a period. For a year-to-year lease, six months notice is usually required.
Tenancies at Will
A tenancy at will is terminable at the will of either the landlord or the tenant. Generally, a tenancy at will must be created by an express agreement that the lease can be terminated at any time. If the lease gives only the landlord the right to terminate, a similar right will be implied in favor of the tenant (but not vice versa, i.e. there is no implied right to terminate in favor of the landlord). A tenancy at will may be terminated by giving notice and a reasonable time to quit by any party with the power to do so, or it may be terminated by operation of law.
Tenancies at Sufferance
A tenancy at sufferance arises when a tenant wrongfully remains in possession after the expiration of a lawful tenancy. A tenancy at sufferance lasts only until the landlord takes steps to evict the tenant. No notice of termination is required.
The Hold-Over Doctrine
If a tenant continues in possession after his right to possession has ended, the landlord may: (i) evict him, or (ii) bind him to a new periodic tenancy. Generally, the terms and conditions of the expired tenancy govern the new one. Residential tenants are generally held to a new month-to-month tenancy, regardless of the original term. If the landlord notifies the tenant before the lease expires that occupancy after the termination will be at increased rent, the tenant, by holding over, is held to have acquiesced to the new terms.
Duty to Repair
A tenant cannot damage (i.e. commit waste on) the leased premises.
Types of Waste
(i) Voluntary (affirmative) waste results when the tenant intentionally or negligently damages the premises or exploits minerals on the property. (ii) Permissive waste occurs when the tenant fails to take reasonable steps to protect the premises from damage from the elements. The tenant is liable for all ordinary repairs, excluding ordinary wear and tear. If the duty is shifted to the landlord, the tenant has a duty to report deficiencies promptly. (iii) Ameliorative waste occurs when the tenant alters the leased property increasing its value. Generally, the tenant is liable for the cost of restoration.
Duty to Not Use Premises for Illegal Purpose
If the tenant uses the premises for an illegal purpose, the landlord may terminate the lease or obtain damages and injunctive relief. Occasional unlawful conduct by the tenant does not breach this duty.
Duty to Pay Rent
At common law, rent was due at the end of the leasehold term. The landlord is not permitted to retain a security deposit beyond the damages actually suffered. If a rent deposit is denominated a bonus, the landlord can retain it after the tenant is evicted. If a tenant effectively conveys his leasehold interest back to the landlord, his duty to pay rent ends.
Remedy if Tenant on Premises but Fails to Pay Rent
At common law, a breach of the lease, such as failure to pay rent, resulted only in a cause of action for money damages. Most modern leases, however, give the nonbreaching party the right to terminate. Thus, the landlord may bring suit for rent due or may evict the tenant under the state_s unlawful detainer statute.
Remedy if Tenant Abandons
If the tenant unjustifiably abandons the property, the majority view is that the landlord has a duty to mitigate damages by seeking to relet the premises. Amount of damages depends on surrender. If surrender is not found, the tenant is liable for the difference between the promised rent and the fair rental value of the property (or rent from reletting). If surrender is found, the tenant is free from any rent liability accruing after abandonment.
No Duty to Repair or Maintain
Subject to modification by the lease, a statute, or the implied warranty of habitability, the general rule is that a landlord has no duty to repair or maintain the premises.
Duty to Deliver Possession of Premises
Statutes in most states require the landlord to put the tenant in actual possession of the premises at the beginning of the leasehold term.
Quiet Enjoyment
Every lease has an implied covenant that neither the landlord nor a paramount title holder will interfere with the tenant_s quiet enjoyment and possession of the premises. This covenant may be breached by: (i) actual eviction, (ii) partial eviction, and (iii) constructive eviction.
Actual Eviction
Actual eviction occurs when the landlord, a paramount title holder, or a hold-over tenant excludes the tenant from the entire leased premises. Actual eviction terminates the tenant_s obligation to pay rent.
Partial Eviction
Partial actual eviction occurs when the tenant is physically excluded from only part of the leased premises. Partial eviction by the landlord relieves the tenant of the obligation to pay rent for the entire premises, even though the tenant continues in possession of the remainder. Partial eviction by a third person with paramount title results in an apportionment of rent.
Constructive Eviction
If the landlord does something (or, more often, fails to provide a service he has a legal duty to provide) that renders the property uninhabitable, the tenant may terminate the lease and seek damages. The conditions must be the result of the landlord_s actions, and the tenant must vacate the premises within a reasonable time.
Implied Warranty of Habitability
Most jurisdictions imply a covenant of habitability into residential leases. This warranty is nonwaivable. The landlord_s duty is tied to standards of local housing codes. In the event of a breach, the tenant may: (i) terminate the lease, (ii) make repairs and offset the cost against future rent, (iii) abate the rent to an amount equal to the fair rental value in view of the defects, or (iv) remain in possession, pay full rent, and sue for damages. [Keep in mind that the implied warranty of habitability does not apply to commercial tenants _ only to residential tenants.]
Retaliatory Evictions
In many states, a landlord may not terminate a lease or otherwise penalize a tenant in retaliation for the tenant_s exercise of her legal rights, including reporting housing or building code violations. Many statutes presume a retaliatory motive if the landlord acts within 90 or 180 days after tenant exercises her rights. To overcome the presumption, the landlord must show a valid nonretaliatory reason for his actions.
Discrimination
Tenants and potential tenants are protected by the Civil Rights Act of 1866, which bars racial or ethnic discrimination, and the Fair Housing Act, which bars discrimination based on ethnicity, religion, national origin, gender, and disability, as well as discrimination against families with children.
Assignments and Subleases
Absent an express restriction in the lease, a tenant may freely transfer her leasehold interest, in whole or in part. A complete transfer of the entire remaining term is an assignment. If the tenant retains any part of the remaining term (other than a right to reenter upon breach), the transfer is a sublease.
Consequences of Assignment
An assignee stands in the shoes of the original tenant in a direct relationship with the landlord; i.e. the assignee and the landlord are in privity of estate, and each liable to the other on all covenants in the lease that run with the land.
Covenants that Run with the Land
A covenant runs with the land if the original parties to the lease so intend and if the covenant touches and concerns the land. (i.e. benefits the landlord and burdens the tenant (or vice versa) with respect to their interests in the property.)
Rent Covenants
Because a covenant to pay rent runs with the land, the assignee owes rent directly to the landlord. After assignment, the original tenant is no longer in privity of estate with the landlord but remains liable on the original contractual obligation to pay rent (privity of contract). If the assignee reassigns the leasehold interest, his privity of estate with the landlord ends, and he has no liability for the subsequent assignee_s failure to pay rent.
Consequences of Sublease
A sublessee is the tenant of the original lessee and usually pays rent to the original lessee, who then pays the landlord. A sublessee is not personally liable to the landlord for rent or for the performance of any of the covenants in the main lease unless the sublessee expressly assumes the covenants.
Landlord_s Remedies
The landlord may terminate the main lease for nonpayment of rent or breach of other covenants if the lease so states or the power is given by statute. The sublease automatically terminates with the main lease. Also, many states allow a landlord who does not receive rent to assert a lien on personal property found on the premises; this applies to a sublessee_s property as well as that of the original tenant.
Rights of Sublessee
A sublessee cannot enforce any covenants made by the landlord in the main lease except a residential sublessee may be able to enforce the implied warranty of habitability against the landlord.
Covenants Against Assignment or Sublease
Lease covenants restricting assignment and sublease are strictly construed against the landlord. A valid covenant against assignment is considered waiver if the landlord was aware of the assignment and did not object. Once the landlord consent to one transfer, the Rule in Dumpor_s Case provides that he waives the covenant as to future transfers unless he expressly reserves it. If a tenant assigns or sublets in violation of a lease provision, the transfer is not void. The landlord, however, usually may terminate the lease or sue for damages.
Assignments by Landlords
A landlord may assign the rents and reversion interest he owns. This is usually done by deed when the landlord conveys a building to a new owner. The tenants_ consent is not required. Once tenants are given reasonable notice of the assignment, they must recognize and pay rent to the new owner as their landlord. The benefit of all tenant covenants that touch and concern the land runs with the landlord_s estate to the new owner. The burdens of the landlord_s covenants that touch and concern the land runs with the landlord_s estate to the assignee; thus the assignee is liable for the performance of those covenants. The original landlord also remains liable on all of the covenants he made in the lease.
Condemnation of Leaseholds
If the entire leasehold is taken by eminent domain, the tenant_s liability for rent is extinguished because both he leasehold and reversion have merged in the condemnor and there is no longer a leasehold estate. The lessee is entitled to compensation. However, if the taking is temporary or partial, the tenant is not discharged from the rent obligation, but is entitled to compensation for the taking.
Landlord_s Liability
At common law, a landlord had no duty to make the premises safe. Today there are six exceptions for (i) concealed dangerous conditions, (ii) common areas, (iii) public use, (iv) furnished short-term residence, (v) negligent repairs by landlord, (vi) landlord contract to repair.
Concealed Dangerous Condition
If, at the time the lease is entered into, the landlord knows (or should know) of a dangerous condition that the tenant could not discover by reasonable inspection, the landlord must disclose (not repair) it. Otherwise, the landlord will be liable for any injuries resulting from the condition. If the tenant accepts the premises after disclosure, she assumes the risk for herself and others; the landlord is no longer liable.
Common Areas
The landlord has a duty of reasonable care in maintaining common areas.
Public Use
A landlord is liable for injuries to members of the public if, at the time of the lease, he: (1) knows or should know of a dangerous condition; (2) Has reason to believe the tenant may admit the public before repairing the condition; and (3) Fails to repair the condition.
Furnished Short-Term Residence
A landlord who rents a fully furnished premises for a short period is under a stricter duty. He is liable for injuries resulting from any defect whether or not he knew of the defect.
Negligent Repairs by Landlord
Even if a landlord has no duty to make repairs, a landlord who actually attempts to repair is liable if an injury results because the repairs are done negligently or give a deceptive appearance of safety.
Landlord Contract to Repair
If the landlord covenants to repair, he is liable for injuries resulting from his failure to repair or negligent repair.
General Duty of Reasonable Care for Landlords
Many courts are now holding that a landlord owes a general duty of reasonable care toward residential tenants, and will be held liable for injuries resulting from ordinary negligence if he had notice of a defect and opportunity to repair it.
Fixtures In General
A fixture is a chattel that has been so affixed to the land that it has ceased being personal property and has become part of the realty. A fixture passes with the ownership of the land.
Chattels Incorporated into Structure
When items are incorporated into the realty so that they lose their identity, they are fixtures, as are items that are identifiable but whose removal would cause considerable damage.
Common Ownership Cases
A common ownership case is one in which the person who brings the chattel to the land owns both the chattel and the land. An item is a _fixture_ if the objective intention of the party who made the annexation was to make the item part of the realty. This intention is determined by: the nature of the article, the manner of attachment, the amount of damage that would be caused by its removal, and the adaptation of the item to the use of the realty. Constructive annexation results when an article of personal property is so uniquely adapted to the real estate that it makes no sense to separate it even if not physically annexed to the property.
Divided Ownership Cases
In divided ownership cases, the chattel is owned and brought to the realty by someone other than the landowner. Accession describes the annexor_s intent to make chattels a permanent part of the real estate. This scenario is evinced primarily in three situations: landlord-tenant, life tenant and remainderman, and licensee or trespasser and landowner.
Landlord-Tenant
An agreement between the landlord and tenant is controlling on whether an annexed chattel is a fixture. Absent an agreement, a tenant is deemed to lack the intent to permanently improve the property, and thus may remove his annexed chattels if removal does not substantially damage the premises or destroy the chattel. Annexed chattels must be removed by the end of the lease term (or within a reasonable time after the termination of an indefinite tenancy), and the tenant is responsible for repairing any damage caused by the removal.
Life Tenant and Remainderman
The same rules apply in the life tenant-remainderman context as in landlord-tenant situations, except that the life tenant_s representative may remove annexations within a reasonable time after the life tenant_s death.
Licensee or Trespasser and Landowner
Licensees are treated much like tenants, whereas trespassers normally lose their annexations. Thus, absent a statute, an adverse possessor or good faith trespasser cannot remove fixtures.
Easements
An easement holder has the right to use another_s tract of land for a special purpose, but has no right to possess or enjoy that land. An easement is presumed to be of perpetual duration unless the grant specifically limits the interest.
