Property II -- Leases to END Flashcards
Leasehold Estates
LL transfers possession in exchange for T’s promise to pay rent
Term of Years
Time: Fixed period with specified end date
Notice to Terminate: Not Required
There are circumstances in which they are not able to evict under, like if the tenant said repair this and the LL evicted next day
Periodic Tenancy
Time: Initial fixed period, then auto-renewal for successive period
Notice to Terminate: Length of period but not to exceed 6 months
On 01/12 say leaving 01/31:
MAJ says ok but owe Feb. rent;
MIN says notice not valid and cannot end tenancy there
Tenancy at Will
Time: No fixed duration
Notice to Terminate: Either party can terminate immediately without notice
Tenancy at Suffrance
“Holdover Tenant”
Time: When T “holds over” at end of lease
Termination: LL can elect to
1. Treat T as trespasser & EVICT
2. Treat T as new T under new lease (LL accepts new rent payment, agrees to new lease –> could raise rent bc new lease)
Self-Help Eviction
When LL takes eviction into their own hands: changing locks, cutting off utilities, etc. GENERALLY NO LONGER ALLOWED in either res/comm contexts
Possibly violent, LL may be mistaken about right to possession and should not be the judge of his own rights (LL should get TRO to prevent T from destroying property). Court proceedings instead
Vasquez v. Glassboro Service Association
Though migrant farmworkers were not considered ”tenants” entitled to protection under CL “anti-self-help eviction statute” (LLs enforcing eviction themselves) (in NJ, which at the time was a just-cause eviction jdx), the public policy concerns (a la Shack) show farmworkers still deserve dignity and thus deserved the benefit of notice and other protections akin to the statute’s.
Privity of K
- Assumption of Obligations of OG K?
- Release from K?
Privity of Estate
Conveyance of Property Interest
* The only promises that flow with the estate are ones that TOUCH AND CONCERN the LAND
* Sublease (no PE) or Assignment (yes PE)?
Assignment
Conveys ALL of T’s remaining property interest (no future right to re-enter property) to recipient. FULL REMAINDER passed on.
* Assignees in possession on the hook to OG T for rent etc.
LL/A no PK, but only in PE. LL breach covenant = liable to A too. LL can sue OGT if A no rent (rent covenant runs with land) but can also sue A.
Sublease
Conveys PART of T’s remaining property interest to recipient (T retains remainder). (Less than entire remainder)
* Covenants do NOT run with land as REAL COVENANTS.
* LL no-right to sue ST to enforce any covenants in OG lease, even rent (if for damages) UNLESS ST promises T to pay rent to LL; then LL able to sue ST as “3rd party beni” of ST-K-T
* Lease covenant can be enforced by injunction (equitable servitude) if ST on notice
Rent covenant may/not be enforceable by injunctions (jdx)
LL can only sue OG T, but if neither T nor ST pay rent, LL can evict T & end ST’s right of possession. If OG T sued, can seek contribution by ST.
LL’s Consent to Sublease/Assign
“No Subletting/Assignment” clauses in leases are generally enforceable (could lead to eviction)
Exception to restraints on alienation of fee interests being void
Kendall v. Pestana
Then-majority rule: LL can arbitrarily refuse their consent to assign
Growing-minority rule (now MAJORITY RULE): LL can only withhold consent if it’s reasonable (good faith, commercially reasonable objection)
Slavin v. Rent Control Board of Brookline
Declined to expand Kendall’s holding to residential developments; deferred to legislature
Rent Conflicts: T Breaches by Nonpayment
- Refuses to leave: LL sues for BACK RENT + Eviction
- Leaves before end of lease term: BACK RENT + attempts to rent apt, can sue for difference if rent different
Rent Conflicts: Holdover Tenancies
- LL may choose to accept new tenancy rels with T (periodic based on rent payment term, or bound to og length)
- OR treat as T@Suff and SUE FOR POSSESSION (notice req,)
LLs can avoid by suing immediately for possession and EITHER refusing to accept checks or cashing them with “not renewing tenancy” on back
Summary Process
- Statutes that provide for a relatively fast judicial determination of the LL’s claim of right to regain possession of property
- Limit issues that can be addressed in lawsuit
- Countered by IWH which allows Ts to assert more defenses
AKA Forcible entry and detainer, unlawful detainer, summary proceedings, summary ejectment
LL Duties (5)
- Give Ts notice of termination
- Not unreasonably deny subL/assign when lease says LL consent req (comm only)
- Mitigate damages when T stops paying/abandons
- Not interfere with QE
- IWH
LL Duty (Obl.) to Mitigate: LL Remedies (3)
- Accept T’s surrender, sue for Back Rent + Damages for Breach of Lease
- (Clearly) Refuse surrender, re-let on T’s account, sue for difference
- Wait and sue for rent at end of lease term (but mitigate)
Sommer v. Kreidel
LL duty to mitigate. LL must make reasonable efforts to re-let apartment and treat it like vacant stock
Acceleration Clause
Liquidated damages: LL typically has burden to prove that he reasonably tried to mitigate, justify the amount lost due to inability to mitigate
Security Deposits
LL Protection from Ts defaulting or damaging premises. Sometimes regulated
* Limit amount
* Require LL to place deposit in separate account
* Require LL to repay deposit to T with interest at termination of leasehold (less $ for necessary repairs)
Rent Control
Meant to allow LL a reasonable return on investment while protecting the rights of Ts to continue living in their homes
* Can encourage game playing
* T generally entitled to leave apt to spouse/family living with T after death
CQE
- LL impliedly promises to not disturb T’s quiet enjoyment of property
- Implied into every LL-T relation by common law or statute
- @ C/L: could only sue for damages, couldn’t stop paying rent
Minjak Co. v. Randolph
A T may assert constructive eviction as a defense to nonpayment of rent, even if they have only abandoned a portion of the demised premises due to the LL’s act of making that portion of the premises unusable by T.
Wet Piano. “Portion of demised premises”
3000 BC v. Bowman Prop. Ltd
Any LL act that interferes with possession = eviction. Breach of covenant can be demonstrated through constructive eviction, if T can establish that the utility of the premises has been substantially and fundamentally impaired.
Downstairs Spa.
Jarvin v. First National Realty Corp.
IWH recognized, implied into every residential lease. LL/T relationship DEPENDENT (diff. from historical).
Remedies:
* T can stay, repair defects, sue LL for costs
* T can stay and stop paying rent
IWH
- Majority: immutable IWH for residential
- Some jdx ID LL obligations by reference to state/local housing codes
- Notice requirement
- Commercial: covenants are dependent rather than independent (MIN: independent)
@ Trial: (1) did alleged violations exist during period for which past due rent is claimed (2) what portion of T’s rent obl. was suspended by LL’s breach
T’s Duties re: Physical Condition of Premises
Duty to not WASTE
* Increasing value is not waste
* Law of Fixtures: in certain cases, when a removable property gets affixed to the property, it becomes part of the property and you can’t take it when you leave
WASTE
- Present interest holder cannot do anything to the land that negatively impacts the FI’s holder’s future interest in property
- Greater the PI’s interest, the more leeway they have to affect the property
Waste Categories (3)
- Degree of effect on use of property
- Degree of effect on value of property
- Temporary/permanency of damage to property
Conventional/Outright Takings
Outrightly, affirmatively, taking the land
AKA:
* Permanent Takings
* Condemnation
* Eminent Domain
Regulatory Takings
Regulating Use of Property
AKA:
* Implicit Takings
* Inverse Condemnation
5th Amendment Takings Clause
“Nor shall private property be taken for public use, without just compensation.”
Pennsylvania Coal v. Mahon
While property may be regulated to a certain extent, if regulation goes “too far” it will be recognized as a taking
Coal Under House
Armstrong (case)
Regulation goes “too far” when it is unfair and unjust to a claimant absent compensation
Penn Central (case) (purpose)
How courts determine whether a regulation’s application to one’s property is unfair and unjust absent compensation
Issues for Takings Questions
- Harm-Prevention vs. Benefit-Conferral
- Applicable Standard
- “Denominator” Question
Harm-Prevention vs. Benefit-Conferral
Reciprocity of Advantage: certain regulations, however onerous the burden, provide a kind of implicit compensation that mitigates the unfairness of not directly compensating owners
Applicable Standard (2)
- Threshold Test: (magnitude of burden) when diminution gets big enough
- Balancing Test: (character of gvmt action) burden/benefit analysis
“Denominator” Question
Extent to which a regulation diminshes the value of the property
Air rights in Penn Central
“Too Far” Characteristics
- Magnitude of harm to the owner
- Balancing public interest vs. private harm
- When is it fair to concentrate harm rather than asking the general public to bear a given burden
- Role of state: not a regulator; instead interested party acquiring property for the public
Penn Central Test (3)
Ad hoc analysis of fairness and justice in regulatory takings cases
- “Economic impact” of the regulation on the particular owner
- The protection of “reasonable” or “distinct” “investment-backed expectations”
- The “character of the governmental action”
Most regulations upheld as legitimate exercises of police power despite impact on property use/value
Takings Toolkit
Three categories (from Penn Central)
Government Ds: frame property interests broadly; Property Owner Ps frame narrowly.
Real Estate Transaction Process
- Sales K (Purchase Agreement subject to SoF)
- Executory Period (Secure Financing, Perform Inspection, Conduct Title Search)
- Closing (Deed exchange, SoF)
Purchase Agreement (3)
- Name of Parties + Signature of Opp
- Description of Property (US Pub. Land Survey, Metes and Bounds, Subdivision Plat Description)
- Price (Cash, 3rd Party Financing, Seller Financing)
Securing Financing: Mortgages
- Mortgage loan from mortgagor/lender to mortgagee/borrower
- Loan secured by a mortgage (property interest held by lender that allows lender to foreclose if loan goes unpaid)
Perform Inspections
- Once, “caveat emptor” (buyer beware)
- NOW: Seller has a duty to disclose LATENT MATERIAL DEFECTS re: condition of property that are not readily observable and unknown to a reasonable buyer
Title Search
- Buyer seeks “clear and marketable title” from seller
- Chain of Title Problems
Lohmeyer v. Bower
- Public restrictions on land use (here, municipal ordinance) make title UM only if VIOLATED.
- Private covenants make title UM by EXISTING.
Stambovsky v. Ackley
Seller has obligation to disclose material defects that they know about, unless the defectsa re those that a buyer knows/should know about through inspection
When a seller-created condition (here, legends of haunting) materially impairs the value of the K + seller has peculiar knowledge OR condition is unlikely to be discovered by reasonably prudent purchaser, nondisclosure = basis for recission.
Inspection Period TLDR (3)
- Seller has duty to disclose all known defects equating nondisclosure with fraud or misrepresentation (caveat emptor being eroded)
- When seller breaches duty, buyer can rescind K or sue for damages after the closign
- Seller must disclose (facts about property) in written statements made to prospective buyers
Material Defects: “Materiality” Defects (2)
- Objective Test: Whether a reasonable person would attach importance to it in deciding to buy
- Subjective Test: Whether the defect “affects the value or desirability of the property to the buyer”
Title Assurance/Deeds (3)
- General Warranty Deed (default, residential; seller –> buyer)
- Special Warranty Deed (commercial, limited promises to grantee bc commercial grantees are in better position to protect themselves)
- Quitclaim Deed (no promises made between grantor and grantee)
Covenants of Title (5/6)
- Seisin
- Right to Convey
- Against Encumbrances
- GW/QE
- Further Assurance
1-3 Present; 4-5 Future
Brown v. Lober
The mere existence of a paramount title does not constitute a breach of the covenant of QUIET ENJOYMENT: the ASSERTATION of that superior right would violate the covenant of GW/QE.
Recording Acts / Recording Statutes
- Race
- Notice
- Race-Notice
Exceptions to “First in Time, First in Right”
Race Jdx
First purchaser to for value to record prevails
Notice Jdx
B must be a “Bona Fide” Purchaser (2)
1. @ Time of Delivery B did not have NOTICE property was already conveyed
2. B gave value for property interest (not GIFT)
Race-Notice Jdx
B must be BFP AND record before A
Types of “Notice” for Recording Acts (3)
- Record Notice: from recorded docs
- Actual Notice: what did party REALLY know
- Inquiry Notice: what party SHOULD have known (re: status of conveyance)
Recording Acts Generally
- Apply to any instrument capable of transferring property rights
- Incentivizes recordation
- Establishes priority
Interests OUTSIDE of RAs
- AP
- Intestacy
- Community Property (Marriage)
Judicial Foreclosure
Go to court, sue, foreclosure, ads, waits, a couple weeks later it gets auctioned off
Non-Judicial Foreclosure
No courts, private parties conduct foreclosure sale (ad requirements), wait requirements, auction requirements (faster, cheaper than judicial)
Deed of Trust Mortgage
Adds another person but otherwise like a normal mortgage
aint no way he tests us on this
Foreclosure Process
Missed Payment –> Notice of Default (Grace Period, usually long for residential, short for commercial but governed by terms of loan) –> Auction (1 of three things can happen) [Sale to 3rd P Buyer / Sale to Lender (“credit bid” equal to amount owed)/ Sale Cancelled]
aint no way he tests us on this
Mortgage with a power of sale
Grants the lender the right to foreclose on a property nonjudicially, meaning without going to court, if the borrower defaults on the loan.
