Property Midterm

Question 1

Define Tenant

Answer 1

The Tenant has the right to possess, use, exclude and enjoyment of the property for the K duration.

*Present Possessory Interest

Question 2

Define Landlord

Answer 2

The Landlord still has record title and the right to possess after the K duration

a) Retaining future interest: “Reversion”
b) Transferring Future interest to 3rd party: “Remainder”

*Future Possessory Interest

Question 3

Define Covenants

Answer 3

Covenants are Formal agreements or promise, usually included in a contract or deed, to do or not do a particular act. These are just promises (they can be implied or express)

• “LL Shall…”

Question 4

Define Conveyance

Answer 4

Conveyance grants a “possessory estate” to T

*“Landlord conveys/hereby leases to…”

Question 5

The Term of Year

Answer 5

(1) The Term of Year: Term is a fixed period of time Term with a beginning and end.

📄 - The Lease could provide the T or LL with the right to terminate upon __ day’s notice

©️ - No Notice is required since lease “naturally: ends on the last day of the term

⚖️ - There is often rules for residential leases but no commercial.

Question 6

The Periodic Tenancy

Answer 6

(2) The Periodic Tenancy: this is a period of some fixed duration that continues for succeeding periods until either the landlord or tenants gives notice of termination. (month to month or year to year)

📄 - Often there is no K. (If there is, LL could agree to provide more notice the state requires)

©️ - LL or T need to give notice prior to end of term, at least length 1 length of the “period” but no more then 6 months. If no notice, it automatically extends *END OF PERIOD

⚖️ - NYRPL: It states that no monthly tenant can be evicted unless proper notice is given. For residential tenancies, LL must give written notice at least 30 before the term expires. Notice must
state the landlord’s intent to terminate the tenancy and begin eviction proceedings if the tenant does not vacate by the specified date. *This is only when LL terminate *30 DAYS

Question 7

Tenancy at Will

Answer 7

(3) Tenancy at Will: Tenancy with no fixed period that endures so long as both landlord and tenant desire.

📄 - Rarely an enforceable K

©️ - No Advance notice was required, If 1 party has the right to terminate both do. Auto terminates if: someone dies, LL sells, or Tenant Assigns its lease. *ANY TIME

⚖️ - NYPRL: This can be ended if LL provides written notice of at least 30 days to the tenant. The notice must be delivered to the tenant directly or to someone living on the premises who is of suitable age and discretion. If neither is possible, the notice can be affixed to a conspicuous part of the property. After thirty days from the notice, the landlord can re-enter, begin legal action to regain possession or proceed with eviction without needing additional notice to vacate. *30 DAYS

Question 8

Holdover Tenancy

Answer 8

(4) Holdover Tenancy: Trespasser that used to be a tenant. There is no legal right of possession due to the lease being used, Not a tenancy at all, when a tenant remains in possession of property after their lease has ended and no longer legally has the right to possess

Question 9

The lease has 2 Covenants from LL…

Answer 9

(1) covenant of delivering possession (commencement day)
(2) covenant of quiet enjoyment (every day after commencement day- can only be enforced when Tenant is in
possession)

Question 10

Legal vs Actual Possession

Answer 10

Legal right of Possession: Who has legal right to occupy with out obstacles in their way.
/There are no third parties claiming superior rights to the premises that would interfere with the T taking possession

Actual Possession: Who actually in possession (physically living there) can only be one person/T1 or T2
On the commencement date, T is able to enter and occupy the space free of any holdover tenants or wrongdoers.

Question 11

Is there a Duty to Deliver Possession?

Answer 11

📄 - If there is an express K provision, it will govern. If lease is silent, the statute default rule is applied

©️ - (1) English Rule: The Landlord MUST give possession to the tenant
(both legal and actual)

  (2) American Rule: Then Landlord MUST give legal passion only 
  and does not have a duty to deliver actual possession.

⚖️ - In the absence of an express provision to the contrary [in the Lease], there is an implied duty to deliver legal and actual possession, (i.e., a default rule) **New York Kind of follows the UK Rule

*These are all of the rules for delivering possession at the BEGINNING OF THE TERM, if the T later, after getting initial possession gets dispossessed this is not longer the rule.

Question 12

Privity

Answer 12

(1) Privity of Contract
Legal relationship between parties based on K
(created by entering into a K aka a lease OR by assumption)

(2) Privity of Estate:
the relationship between the holder of the right of possession and the holder of the reversionary interest (ie Landlord).
- the connection of two people by their simultaneous but different interest in the same property

*The Suit is still breach of contract NOT Privity of estate.

Question 13

How to create & sever Privity of Contract

Answer 13

Create:
1. Entering into a K
2. Assumption by Assignee

Sever:
1. Release
2. Full performance

Question 14

How to create & sever Privity of Estate

Answer 14

Create:
1. LL and Holder of the possessory estate

Sever:
1. Assignment

Question 15

Assumption

Answer 15

Privity of K can be Assumed by another party (i.e., T2) though it DOES NOT Sever LL and T1 Privity of K

Question 16

Assignment

Answer 16

Lessee transferred property to “Assignee” (T2) for the entire remainder of his term AND The original tenant transferred ALL rights and can no longer enter the property
* Only tenant 1 needs to sign the Assignment (It is a convenience)

Question 17

Legal consequences for an assignment/Who can the landlord sue?

Answer 17

(1) Privity of Contract = still between LL & T1 (unless assumed the both T1 and T2)
(2) Privity of Estate = Severed between LL & T1 Now Privity only with LL & T2 (the assignee)

Question 18

Releases

Answer 18

This is a signed “release” that Server’s Privity of Contract. This can be w/ subleases or assignments.
**Assignment does not release the releasee only the release can release

Question 19

Surety

Answer 19

The one who has become legally liable for the debt, default, or failure in duty of another, he obligated to pay; the good-guy; but not fair! [T1/original tenant]

Question 20

Suretyship

Answer 20

this is an equitable principal for the person who has to pay but not for the person who should have to pay.

*You use suretyship if T1 has NOT been released. (therefor has the responsibility to pay but shouldn’t have to)

*T1 sues T2 under suretyship (this is because an assignment is not a contract)

*If T1 Was Released He No Only Has Surety

*Q&A “Can T1 sue T2” Yes … a) Privity of Estate or b) Privity of Estate and Contract if T2 assumed

Question 21

Sublease

Answer 21

A transfer of property to a “sublessee” for less than the entire term (even for a day) + NOT ALL rights are transferred. T1 has reversionary Interest

T2 has NO Privity with LL

Question 22

How to determine if it is a sublease

Answer 22

(1) Traditional/Formulistic Rule= If you transfer ALL then assignment. If only SOME it is sublease
(2) Modern Rule = You looks at the parties intent
*On exam use both rules to analyze, define both rules then apply

Question 23

Is Consent Needed? 1/3 CONTRACT

Answer 23

📄
(1) Lease is Silent:
“When the lease is silent, courts will not find an implied covenant to assign unless the tenant has a special skill or ability which has a material affect on the LL’s expectations.”

(2) “T cannot assign w/out LL consent”:
- Traditional Rule: OK to refuse consent, even if arbitrary (even if unreasonable)

• Modern Rule Kendall: must be commercially reasonable

(3) “T cannot assign w/out LL consent AND LL must be reasonable”:
- Enforce the K provision

(4) “T cannot assign w/out LL consent AND LL can be unreasonable”:
- Traditional Rule: Enforce K provision
- Modern/Kendall: Even Kendall court (and Restatement) says ok to enforce an express provision

Question 24

Is Consent Needed? 2/3 Common Law

Answer 24

©️
(1) Traditional Approach: May refuse consent even if arbitrary (LL can be unreasonable)

(2) Modern Approach: LL must be commercially reasonable if Lease is silent

(3) Dumpnor’s Rule: if LL consents to any assignment, it has impliedly consented to all subsequent assignments (principle of implied consent). Parties can negate the implied rule with an express statement in the lease… express statement “consent to any particular assignment does not imply its consent to any subsequent assignment”

Question 25

Is Consent Needed? 3/3 Statue

Answer 25

⚖️ - NY RPL § 226-b
(1) Assignment:
- If reasonable, tenant is not released, tenant cannot assign.
- If unreasonable, tenant is released from lease, no assignment.

(2) Sublease:
- If the landlord reasonably withholds without consent, then no sublease.
- If the landlord is unreasonably then sublease.

(3) Mandatory: any provision of a lease or rental agreement purporting to waive a provision of this section is null and void.

Question 26

Surrender & Abandonment by a tenant

Answer 26

(1) Tenant’s Offer to terminate the Lease
- Express offer (an agreement to surrender)
- Implied offer (by abandonment or surrender)

(2) Landlord’s Acceptance of an offer to terminate Lease
- Express (an agreement whereby LL agrees to accept)
- Implied (INTENT- are landlord’s actions inconsistent with (or repugnant to) the continuation of the original lease?)

Question 27

Self Help

Answer 27

LL taking it in his own hands to retake possession

Common Law OLD Rule
LL may use Self-Help to retake premises from a Tenant-In-Possession (without incurring liability for wrongful eviction) so long as 2 conditions met:
1. LL must be legally entitled to possession
a. Holdover tenant, OR
b. Breach of Lease AND Lease contains a re-entry clause
AND
2. Re-entry must be Peaceable

*Therefore, T may recover damages for wrongful eviction if either:
(i) LL not entitled to possession OR (i) not peaceable

MODERN Common Law Rule:
all self-help is wrong as a matter of law if Tenant has not abandoned, then must use judicial process. It is never available

Question 28

Common Law- Mitigation

Answer 28

Landlord has 3 option…

Option (1)
- Do nothing and collect full rent from T under Lease
- No Mitigation

Option (2)
- Accept T’s surrender (terminating lease), re-enter premises and relet premises for LL’s own account (tenant has no liability)
- Terminate Lease and Recapture
- Better for the LL bc market rent has gone up

Option (3)
- Notify T that LL is entering and reletting for T’s benefit ($$ goes to LL’s expenses, then to Tenant s rent liability) (tenant still liable)
- Mitigate
- Trying to find someone to re-rent the property and then the T1 owes the difference (if they rent for cheaper)

Question 29

Mitigation NY Rule- Residential

Answer 29

NY RPL §227-e
* “If a tenant vacates a residential property, the landlord is under a duty to mitigate the damages and rent the premises at a fair market value during the term of the tenancy. If the property leases for less than what the tenant owed T is responsible for the difference. Contract provisions which state otherwise are void as a matter of public policy.” (This is a mandatory rule)
* Duty to Mitigate

Question 30

Mitigation Contract Rule

Answer 30

Most Jurisdictions have a statue for residential leases and the duty to mitigate.

Question 31

Covenant of Quiet Enjoyment (Express AND Implied)

Answer 31

(1) Express
- In the lease

(2) Implied
- Majority Rule: implied covenant of QE in all leases
- Old NJ Rule: No implied covenant simply b/c of the LL/T relationship. There must be an express agreement or use of some words that imply the covenant. [Note: NJ now has implied covenant of QE]

Question 32

Breach of Covenant of Quiet Enjoyment

Answer 32

(1) Actual Eviction
- LL wrongfully evicts and/or forces T off premise
- By 3rd party asserts “legal right”

(2) Constructive Eviction
1- wrongful act or omission by the landlord, 3rd party claiming by/through/under landlord

2- which renders the premises substantially unsuitable for the purpose for which they are leased or seriously interferes with beneficial enjoyment of premises; and

(3) tenant thereafter abandons premises.

Question 33

Warranty of Habitability

Answer 33

Implied:
All residential rentals ALWAYS include an implied warranty of habitability, which cannot be waived or disclaimed.
* The place must be safe, clean, and fit for human habitation.
* There must be notice and reasonable time to fix.
* Must show the defect at the time rent was withheld.
* Reasonability standard and housing codes determine what “uninhabitable” would be.

**This is only for residential and not commercial

Additional Express Term:
* Common law follows NY statute.
* The express cannot negate the standard set forth in the implied warranty

NY RPL § 235-b: “If a residence is uninhabitable, the tenant does not have to pay during the time that the residence is uninhabitable”.

Question 34

How to determine if it is a sublease

Answer 34

(1) Traditional/Formulistic Rule If you transfer ALL then assignment. If only SOME it is sublease
(2) Modern Rule  You looks at the parties intent
*On exam use both rules to analyze, define both rules then apply
Example: saying “for a period of 1 year” on a lease of 3 years- there is a clear intent that this is a sublease. With 2 years remaining.

Question 35

Remedy:

Answer 35

Remedy: if LL breaches implied condition (i.e., LL not able to deliver actual possession) then T has right to rescind/cancel, lease, stop paying rent and recover consideration paid (such as deposit, first month rent, etc.)