Property Learning Questions - Set 3 Flashcards
Which of the following transfers creates a sublease from T to T2?
A
One year into a five-year tenancy for years, T transfers his interest “to T2 for four years; however, if T2 breaches the original lease terms, T may reenter and retake the premises”
B
Six months into a seven-month tenancy for years, T transfers his interest “to A for the balance of the leasehold term”
C
Two years into a four-year tenancy for years, T “assigns my entire interest to T2 for one year”
C
If two years into a four-year tenancy for years, T “assigns my entire interest to T2 for one year,” the effect of the transfer is to create a sublease between T and T2. The label given by the parties does not determine whether a transfer is an assignment or a sublease. Rather, a complete transfer of a tenant’s entire remaining lease term is an assignment, and a transfer retaining any part thereof is a sublease. Here, although T “assigned” his interest to T2, he transferred only one of the remaining two years of the lease. Thus, the transfer is a sublease rather than an assignment.
If six months into a seven-month tenancy for years, T transfers his interest “to A for the balance of the leasehold term,” the effect of the transfer is an assignment of the lease from T to T2 because it includes T’s entire remaining lease term.
If one year into a five-year tenancy for years, T transfers his interest “to T2 for four years; however, if T2 breaches the original lease terms, T may reenter and retake the premises,” the effect of the transfer is an assignment of the lease from T to T2. T transferred the remaining four years of the lease to T2, and by the slight majority view, T’s reservation of a right of reentry does not result in a sublease, but rather is still an assignment.
If L leases property to T, and L subsequently assigns L’s interest to L2, whom may T hold liable when X, a paramount title holder, ejects T?
A
Neither L nor L2
B
L2 only
C
L or L2
D
L only
C
If L leases property to T, and L subsequently assigns L’s interest to L2, T may hold L or L2 liable when X, a paramount title holder, ejects T. A landlord may assign the rents and reversion interest that he owns. The assignee is liable to the tenants for performance of all covenants made by the original landlord in the lease, provided that those covenants run with the land. The original landlord also remains liable on all of the covenants he made in the lease. X’s evicting T from the entire leased premises breaches the covenant of quiet enjoyment, which runs with the land. Thus, L and L2 are personally liable to T.
L only is incorrect because L2, the assignee, is liable for all lease covenants that run with the land, and the covenant of quiet enjoyment runs with the land.
L2 only is incorrect because L, the original landlord, also remains liable on all covenants in the original lease after assignment.
Neither L nor L2 is incorrect because the original landlord (L) remains liable on all covenants in the original lease after assignment, and the assignee (L2) is liable for all lease covenants that run with the land, including the covenant of quiet enjoyment.
Which of the following statements is correct regarding covenants against assignment or sublease?
A
If a tenant transfers her interest in violation of a covenant against assignment or sublease, the transfer is void.
B
A covenant against assignment prevents the tenant from subleasing her interest.
C
If a landlord consents to one transfer that violates a covenant against assignment or sublease, he waives his right to avoid future transfers.
D
A covenant against assignment or sublease is an unreasonable restraint on alienation.
C
If a landlord consents to one transfer that violates a covenant against assignment or sublease, he waives his right to avoid future transfers. This is the Rule in Dumpor’s Case. The landlord may reserve the right to avoid future transfers, but such reservation must take place at the time of granting consent.
A covenant against assignment or sublease is NOT an unreasonable restraint on alienation. All jurisdictions permit and enforce such covenants.
A covenant against assignment does NOT prevent the tenant from subleasing her interest. Covenants against assignment or sublease are strictly construed against the landlord. Thus, a covenant prohibiting assignment does not prohibit subleasing and vice versa.
If a tenant transfers her interest in violation of a covenant against assignment or sublease, the transfer is NOT void. However, the landlord usually may terminate the lease under the lease terms or a statute or sue for damages.
Which of the following transfers creates an assignment of the lease from T to T2?
response - correct
A
Four years into a six-year tenancy for years, T orally transfers his entire interest to T2 for two years.
B
Two years into a four-year tenancy for years, T “assigns my entire interest to T2 for one year”.
C
One year into a five-year tenancy for years, T transfers his interest “to T2 for four years; however, if T2 breaches the original lease terms, T may reenter and retake the premises”.
D
Six months into a tenancy at will, T transfers “my entire interest to T2”.
C
If one year into a five-year tenancy for years, T transfers his interest “to T2 for four years; however, if T2 breaches the original lease terms, T may reenter and retake the premises,” the effect of the transfer is an assignment of the lease from T to T2. A complete transfer of the entire remaining lease term constitutes an assignment of the lease. If the tenant retains any part of the remaining lease term, other than a right of reentry for breach of the original lease terms, the transfer is a sublease. Here, T transferred the remaining four years of the lease to T2. By the slight majority view, T’s reservation of a right of reentry does not result in a sublease, but rather is still an assignment.
If six months into a tenancy at will, T transfers “my entire interest to T2,” the attempted assignment is void and terminates the tenancy at will by operation of law. A tenancy at will is a leasehold estate that is terminable at the will of either the landlord or the tenant. Such a tenancy terminates by operation of law if: 1. Either party dies; 2. The tenant commits waste; 3. The tenant attempts to assign his tenancy; 4. The landlord transfers her interest in the property; or 5. The landlord executes a term lease to a third person.
If two years into a four-year tenancy for years, T “assigns my entire interest to T2 for one year,” the effect of the transfer is to create a sublease between T and T2. The label given to the transfer by the parties does not determine whether the transfer is an assignment or a sublease. The nature of the transaction is determined by what interest, if any, the tenant retains. Here, although T “assigned” his interest to T2, he transferred only one of the remaining two years of the lease. Thus, the transfer is a sublease rather than an assignment.
If four years into a six-year tenancy for years, T orally transfers his entire interest to T2 for two years, the attempted assignment is ineffective under the Statute of Frauds. Most states require that a lease creating a tenancy for more than one year, including an assignment of an interest in a lease for more than one year, be in writing to satisfy the Statute of Frauds.
A landlord leased a house to a tenant for five years. Under the terms of the lease, the tenant was to pay a fixed monthly rent plus all taxes and reasonable maintenance charges for the upkeep of the house. Three years into the lease, the tenant assigned her lease to a friend by written agreement. Although the tenant properly set forth the terms concerning the rent and maintenance charges, she failed to properly state that the friend was liable to pay the taxes on the residence during the period of the lease. A year later, the landlord received notice that a tax lien would be placed on the residence unless the taxes were immediately paid. The landlord paid the taxes and brought suit against the tenant’s friend for the amount. The suit extremely upset the friend, who abandoned the residence.
Can the landlord successfully bring a suit against the tenant for this breach of the lease?
A No, because the tenant is no longer a tenant.
B No, because the tenant is no longer in privity of estate with the landlord.
C Yes, because the tenant’s assignment to the friend did not terminate the tenant’s obligations.
D Yes, because the tenant had caused the problem by failing to include the tax payment provision in her assignment.
C
The landlord can sue the tenant for breach because the tenant’s assignment to the friend did not terminate the tenant’s obligations. An assignee is in privity of estate with the landlord and is liable for all covenants that run with the land, including the covenant to pay rent. The original tenant (assignor) remains in privity of contract with the landlord and is liable for the rent reserved in the lease if the assignee abandons the property. Therefore, the tenant is liable to the landlord for the remaining rent. (A) is incorrect because the tenant’s status as a tenant is immaterial. (B) is incorrect because, although the assignor’s privity of estate with the landlord ends upon assignment, the assignor remains liable on the original contractual obligations. (D) is incorrect because the tenant’s failure to include the tax payment provision in her assignment to the friend does not affect the tenant’s liability as assignor under privity of contract.
A landlord leased a building to a baker for 10 years, commencing January 1, at a monthly rental of $1,700. The lease stated in part, “The tenant may not sublet or assign this lease without first receiving written permission from the landlord to do so. Any attempt to sublet or assign the lease without first receiving written permission shall constitute a breach entitling the landlord to terminate this lease.”
Five years later, an investor approached the baker and offered to purchase the bakery if the baker would agree to sublet the premises to him. The baker agreed and executed a sublease on July 1 of that year. The investor took possession the same day. On July 3, the baker approached the landlord and asked for written permission to sublet the premises to the investor. The landlord said he had no real objection to the sublease and would execute the document requested by the baker, but only if the investor would sign a five-year extension of the existing lease. The investor refused to extend the lease, but remained in possession of the building. At no time did the landlord accept rent from the investor. After notice was given to all parties and the applicable grace period in the lease had elapsed, the landlord brought an appropriate action against the baker and the investor to evict them from the premises and to declare the lease terminated because it had been breached.
How should the court rule in this action?
response - incorrect
A Against the landlord, because his withholding consent is an invalid restraint on alienation.
B Against the landlord, because his conditional consent operated as a waiver of the term of the lease requiring the landlord to give written permission for subletting.
C For the landlord, because the baker has breached the lease.
D For the landlord, because his oral consent to sublet is not enforceable under the Statute of Frauds.
C
The landlord should prevail because the baker has breached the lease. Generally, if a tenant transfers (assigns or sublets) in violation of a prohibition in the lease against transfers, the transfer is not void. However, the landlord usually may terminate the lease under either the lease terms or a statute. Here, because the baker has breached the provision of the lease prohibiting assignment or sublease, and the lease contains a forfeiture clause, the landlord was within his rights to terminate the lease. (A) is incorrect because clauses restricting assignment or sublease are not considered to be restraints on alienation. (B) is incorrect because a conditional consent is not a waiver where the condition is not agreed to. (D) is incorrect because an oral consent, if made, is sufficient to waive the provision. Here, the landlord’s consent was conditioned on the investor signing an extension of the lease, which he did not do.
A landlord entered into a 10-year lease of a building with an auctioneer, who planned to use the building itself for a storage area and the covered porch at the front of the building for auctions. A term in the auctioneer’s lease stated, “Lessor agrees to maintain all structures on the property in good repair.” Four years into the lease, the landlord sold the property to a buyer. The buyer did not agree to perform any obligations under the lease. As instructed, the auctioneer began paying rent to the buyer. In the fifth year of the lease, the porch roof began to leak. Citing the lease terms, the auctioneer asked the buyer to repair the roof. He continually refused to do so. The auctioneer finally repaired the roof herself at a cost of $2,000. The auctioneer then brought an appropriate lawsuit to recover the money.
Absent any other facts, what is the auctioneer likely to recover?
A $2,000 from the landlord only, because the sale of the property did not sever his obligation to the auctioneer.
B $2,000 from the buyer only, because a covenant to repair runs with the land.
C $1,200 from the buyer and $800 from the landlord, because that represents their pro rata shares.
D $2,000 from either the buyer or the landlord, because they are both in privity with the auctioneer.
D
The auctioneer may recover the cost of repair from either the landlord or the buyer. A landlord’s promise in a lease to maintain the property does not terminate because the property is sold. Although no longer in privity of estate, the original landlord and tenant remain in privity of contract, and the original landlord remains liable on the covenant unless there is a novation. A novation substitutes a new party for an original party to the contract. It requires the assent of all parties and completely releases the original party. Because neither the auctioneer nor the buyer has agreed to a novation, the landlord remains liable for the covenant because he and the auctioneer remain in privity of contract even after the sale. Thus, the promise to repair can be enforced against the landlord. When leased property is sold, the purchaser may be liable for his predecessor’s promises if the promise runs with the land. A covenant in a lease runs with the land if the parties to the lease so intend and the covenant touches and concerns the land. Generally, promises to do a physical act, such as maintain or repair the property, are considered to run with the land. Thus, the buyer is liable because he is in privity of estate with the auctioneer and the covenant to repair runs with the land. Consequently, both the landlord and the buyer are potentially liable to the auctioneer for the repairs. While it is true that the sale/assignment to the buyer did not sever the landlord’s obligation to the auctioneer, as explained above, the landlord is not the only person who is liable to the auctioneer. Because both the landlord and the buyer are potentially liable for the repairs, (A) is incorrect. (B) is incorrect because although it is true that a covenant to repair touches and concerns the land and runs with it on assignment, the landlord as well as the buyer can be held liable. (C) is incorrect because the auctioneer may recover the full amount from either the landlord or the buyer.
A man had rented a woman’s home from her for seven years. When the time came to sign a new lease, the woman decided that because the man had always been a quiet tenant, she would continue to charge him only $350 per month rent instead of the $500 to $550 she could probably get otherwise. The new lease was for a period of five years, and by its terms, the man was specifically prohibited from assigning the lease without the woman’s specific written consent. About a year later, the man got married and moved into his new wife’s home. Instead of giving up his lease, the man sublet the property to a friend for $500 a month. The man did not get the woman’s permission to sublease the property.
If the woman brings an action to either eject the friend from the premises or to recover damages from the man for subletting the premises without her consent, what is the most likely result?
A The woman will be able to recover damages and to eject the new tenant.
B The woman will be able to eject the new tenant only, because she has suffered no money damages.
C The woman will not be able to eject the new tenant because, although the man did not have the right to sublet, he had the power, but she will be entitled to recover the full rent paid by the new tenant because it would be unfair to let the man profit from his wrongful act.
D The woman will have no cause of action for either ejectment or damages.
D
The woman will most likely have no cause of action for either ejectment or damages. There are two ways for a tenant to transfer the right to possession under a lease: assignment (transferring the entire period of time remaining under the lease) and sublease (transferring only a portion of the time remaining under the lease). Restraints on alienation are traditionally strictly construed. Thus, a covenant prohibiting assignment does not prohibit subleasing and vice versa. Hence, this prohibition against assignment would not be read to include a prohibition against subleasing. Therefore, the woman would have no cause of action against the man, and (A) and (B) are incorrect. (C) is incorrect. If a tenant transfers (assigns or sublets) in violation of a prohibition in the lease against transfers, the transfer is not void, but the landlord usually may terminate the lease under either the lease terms or a statute. Here, however, there is no cause of action because subleasing was not prohibited.
