Real Property Flashcards
Assignment of a lease when where the contract is silent
Here, the tenant attempted to assign her lease—that is, to transfer the balance of the lease term— to a lawyer. A restriction on assignment is a valid restraint on alienation. Because a restraint on transfer by assignment is valid, the lease provision here prohibiting an assignment without the landlord’s consent was valid.
Under the traditional rule—still the majority rule today—a silent consent clause gives the
landlord the right to withhold consent for any reason or for no reason—even if the withholding of consent is arbitrary and unreasonable. (That rule, however, is subject to statutory housing discrimination laws that are not at issue here.)
There is an emerging modern trend that a landlord’s consent not be unreasonably withheld, which is based upon the principle that leases are subject to the good faith requirements of contracts in general. Thus, a minority of courts require that a landlord have a reasonable basis for withholding consent to a proposed transfer. Factors that may be considered under a reasonableness test include the proposed assignee’s financial ability to pay, the suitability of the premises for the proposed assignee’s use, and the need for alterations to accommodate the proposed assignee’s use. It is not commercially reasonable to deny consent solely on the basis of personal taste, convenience, or sensibility.
Abandonment
Abandonment occurs when a tenant vacates the leased premises before the end of the term, has no intent to return, and defaults in the payment of rent.
Under traditional common law principles, a landlord has three options when a tenant abandons
the premises: (1) accept a surrender of the premises, thereby extinguishing the tenant’s duty to
pay rent due after the acceptance of surrender; (2) re-let or attempt to re-let the premises on the
tenant’s behalf, and recover from the tenant damages based on the difference between what the tenant owed for rent and what the landlord collected from re-letting; or (3) leave the premises vacant and sue the tenant for unpaid rent as it accrues.
Duty to mitigate when it comes to a landlord recovering unpaid rent
In a jurisdiction following the common-law no-mitigation rule, the landlord will argue that he
had no duty to mitigate and that, because he did not accept the tenant’s surrender he is entitled to the 17 months of unpaid rent.
Some jurisdictions have enacted a statute requiring the landlord to mitigate.
Duty to mitigate depends upon whether the landlord accepted surrender.
While most jurisdictions today reject the common-law rule that a landlord has no duty to
mitigate, there is little guidance as to what efforts are sufficient to satisfy the mitigation
requirement. Some statutes have defined reasonable efforts as “steps which the landlord would
have taken to rent the premises if they had been vacated in due course, provided that those steps are in accordance with local rental practice for similar properties.”
In some jurisdictions, a landlord’s failure to mitigate would relieve the tenant of any liability for
rent or damages after the date of abandonment because by failing to mitigate, the landlord is
deemed to have accepted the surrender.
Warranty deed - present covenants
A warranty deed contains six title covenants, three present covenants and three future covenants.
The three present covenants are:
- covenant of seisin, a covenant that the grantor owns the land that the deed purports to convey to the grantee;
- covenant of right to convey, a covenant that the grantor has a right to convey the land; and
- covenant against encumbrances, a covenant that there is no outstanding right or interest in a third party which does not totally negate the title the grantor purports to convey.
These warranties of title apply to all easements on the land except to the extent that they have been excepted by the terms of the deed. The fact that the contract between the developer and the man provided for a warranty deed with easements excepted is irrelevant to whether a breach has occurred because, as a result of the so-called merger doctrine, contractual promises relating to title do not survive the closing and the delivery of the deed. In other words, the only promises relating to title that survive the closing are those in the deed.
Implied wattanties for new home construction
Today, it is generally true that a builder of a new home impliedly warrants to the buyer that the
home is habitable and fit for its intended purposes. This implied warranty allows a buyer to
recover damages for losses resulting from defective construction or construction that was not
done in a workmanlike manner. The warranty applies to defects that are discovered within a
reasonable period of time, are due to the builder’s negligence or failure to do the work in a
workmanlike manner, and cannot be attributable to later changes in the structure or to normal
deterioration. Courts vary in characterizing the warranty as based in contract or in tort law.
Fair Housing Act Rule
Under the Fair Housing Act, it is unlawful to refuse to rent a dwelling to a person based on the
person’s race, color, religion, sex, familial status, or national origin. Of these, only discrimination on the basis of sex is relevant here. The owner’s refusal to rent to men and her statements to the two men that she did not rent to men were discriminatory under the Act.
Section 3604(c) of the Act makes it unlawful to make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination.This provision applies not only to a landlord who places an advertisement but also to the publisher of the newspaper in which the advertisement is placed.
Fair Housing Act Exception
Section 3603(b)(2) of the Act provides that the anti-discrimination rule does not apply if the owner occupies one of the units in a multiple-unit dwelling containing no more than four units occupied by persons living independently of each other. Here, because the owner’s building contained only three units, the owner occupied one of the units, and all units were occupied by persons living independently of each other, the exception to the Act’s nondiscrimination rule applies. Thus, the owner’s refusal to rent to men did not violate the Act.
Implied covenant of quiet enjoyment
Implied in every lease of real estate is a covenant of quiet enjoyment. The covenant of quiet enjoyment protects a tenant against a constructive eviction by the landlord, which occurs when the landlord fails to perform a duty owed to the tenant that substantially deprives the tenant of the use and enjoyment of the premises. Thus, there can be a constructive eviction when the landlord fails in his duty to make repairs or maintain the premises.
Fixtures
Under the state law, a fixture is defined as an item of personal property affixed or attached to the real property by the seller unless a reasonable person would conclude, based upon all the facts and circumstances relating to the specific personal property, that the item of personal property at the time it was affixed or attached was not affixed or attached to the real property with the intent to make it a permanent part of the real property.
Doctrine of constructive eviction
A tenant can avoid payment of rents under a lease based on the doctrine of constructive eviction. To establish constructive eviction, the tenant has the burden of showing, in addition to breach of a duty to the tenant , that the tenant gave the landlord notice of the breach, the breach
resulted in denying the tenant substantial enjoyment of the premises, the tenant gave the landlord a reasonable opportunity to correct the breach, and the tenant timely vacated the premises.
Options available to a landlord when a tenant abandons the premesis during the lease
When a tenant abandons the premises during the term of a lease, the landlord has three options. The landlord (1) may accept the surrender and terminate the lease, (2) may relet the abandoned premises for the vacating tenant’s account, or (3) may refuse to accept the surrender and sue the tenant for overdue rent, subject in some jurisdictions to a duty to mitigate.
Easements
Can be implied from prior use if the following requirements are met:
a. Both parcels (the dominant tenement and the servient tenement) must have been owned by the same person at the time the prior use arose.
b. The prior use that was said to create an implied easement over the gravel road across
the eastern 80 acres of the property must have benefited the other portion of the land (the western 90 acres).
c. The prior use must have been apparent.
d. The prior use must have been continuous.
e. The prior use must have been reasonably necessary for the use and enjoyment of the
benefited property.
