Renting and Leasing Flashcards
Basics of the Lease
● The lease is central to the landlord-tenant relationship. It sets the terms for the tenancy (e.g., rent, duration, and location). (Supplement, 16.01). These include: (1) term of years; (2) periodic tenancy , and (3) tenancy at will.
● When parties do not establish an agreement for an issue, property law provides default rules to fill the gap and immutable rules that supersede the parties’ freedom to contract.
● The lease is governed by both contract law (contract) and property law (conveyance).
● A residential lease is used to rent a home (apartment, condo, or single-family residence). A commercial lease involves any non-residential purposes, such as store, factory, church or school.
● Statute of Frauds: In general, for leases of more than one year, the statute of frauds requires a writing with basic terms (parties, description, duration, and rent), and signed by the party against whom enforcement is sought
Landlord’s Duty to Deliver Possession
What is the landlord’s duty to deliver possession of the property once the landlord and tenant have a valid lease?
● In all states, the landlord is obligated to deliver the legal right of possession to the tenant when the lease term begins.
● Majority (“English” rule): In most states, the landlord must deliver actual possession of the premises to the tenant when the lease term begins, in addition to the legal right possession. Landlord is responsible for clearing property prior to lease.
● Minority (“American” rule): In a minority of states, the landlord is only obligated to deliver the legal right to possession to the tenant when the lease term begins, unless the lease provides otherwise. Tenant is responsible for clearing property prior to moving in.
Implied Covenant of Quiet Enjoyment
● Implied Covenant of Quiet Enjoyment (ICQE): In every state, there is a promise by the landlord, that the landlord will not wrongfully interfere with the tenant’s possession of the property, including no wrongful eviction or constructive eviction
● The ICQE may be breached in any one of three ways:
○ Actual eviction (L excludes T from entire premises; terminate T’s obligation to pay rent)
○ Partial actual eviction (L excludes T from part of the premises; terminates T’s obligation to pay rent)
○ Constructive Eviction
Constructive Eviction
- Wrongful conduct
a. Acts (e.g., blocking access, nuisance, harassing T’s customers, etc.) or
b. Omission (e.g., L breaches duty in lease or statutory duty) - by the landlord (L)
a. Exception: By third-party if L has control over third-party conduct (e.g., L controls parking lot) - that substantially interferes with the tenant’s beneficial use and enjoyment of the leased property
a. The conduct must amount to such a major interference that a reasonable person would conclude a renter dwelling is uninhabitable (e.g., flooding in office every time it rains).
Constructive Eviction Procedure
Procedure if relying on constructive eviction:
1. Notify Landlord (L) of the problem
2. Provide Landlord with reasonable time to fix the problem
3. Vacate the premises if the problem is not fixed
a. Tenant must vacate within a reasonable period of time or else waived. (Paulucci)
Implied Warranty of Habitability
● Most states have adopted the implied warranty of habitability (IWH)
● The IWH requires “bare living requirements” and that the ”premises are fit for human occupation” (e.g., flooding, sewage leaks). See Supp., p. 272.
● The IWH does not require L to maintain “perfect condition[s] at all times” and L must have reasonable time to fix defects
● Substantial compliance with building and housing codes provides evidence of habitable premises
● But showing a code violation is not required to show breach by L
Implied Warranty of Habitability Procedure
Procedure if relying on IWH:
1. Notify the Landlord about the problem
2. Provide Landlord with reasonable time to fix the problem
3. No requirement to vacate the premises
Implied Warranty of Habitability Remedies
If the implied warranty of habitability is breached, the tenant has four options (MRRR!):
1. Move out and sue for damages
2. Repair and deduct the cost of repairs
3. Remain in possession and withhold rent (forces L to fix problem)
4. Remain in possession, continue paying rent, and sue for damages. Damages
a. Fair rental value as warranted minus the fair rental value unrepaired
b. Contract rent minus the fair rental value unrepaired
c. “Percentage diminution” based on degree of reduction of T’s use and enjoyment of premises reduced by uninhabitable conditions and time (adopted in Wade)
Wade v. Jobe
Facts: A tenant rented a house from the landlord. Shortly after she took occupancy, the tenant discovered numerous defects in the dwelling. The landlord attempted to remedy the defects but they kept recurring. The tenant notified the landlord that she would withhold rent until the sewage problem was solved permanently. The situation did not improve, and an inspection by the city revealed that the premises were unsafe for human occupancy due to the lack of a sewer connection and other housing code violations. The tenant moved out of the house. The landlord brought suit and was awarded unpaid rent. The tenant was denied any offsets, and her counterclaim was dismissed. The tenant appealed.
Rule: If a landlord breaches the implied warranty of habitability, the tenant is entitled to a percentage reduction of the rent for the period of the breach. That said, the warranty of habitability does not require the landlord to maintain the premises in perfect condition at all times, nor does it preclude minor housing code violations or other defects. Moreover, the landlord will not be liable for defects caused by the tenant. Further, the landlord must have a reasonable time to repair material defects before a breach can be established.
Landlord Liability for Personal Injury
● At common law, Landlord was not generally liable for personal injury to tenants or others caused by dangerous conditions on leased premises, even if the landlord was negligent.
● Exceptions:
○ Concealed latent defects - Must warn (not repair) tenant of any defects Landlord knows about or should have known about
○ Common area defects - Landlord must maintain all common areas, responsible in tort for these areas
○ Negligent repairs - Landlord who voluntarily makes negligent repairs is liable for injuries resulting from those repairs
○ Breach of agreement to repair
○ Defects in premises for public use
Modern Trend: Residential landlords are evaluated under the same “reasonable care” standard used in ordinary negligence litigation.
Note: For each exception, add rule elaboration from supplement to your rule statements. Learn both exceptions and modern trend.
Fair Housing Act (1968)
● The Fair Housing Act (1968) bars discrimination based on race, ethnicity, religion, national origin, sex, familial status (families with minor children or pregnant people), national origin, or disability in the sale or rental of a dwelling.
● However, the Fair Housing Act (1968) does not apply to (i) owner-occupied apartments with no more than four units or (ii) single-family residences rented or sold without a real estate broker or salesperson.
● The Fair Housing Act (1968) bars publishing any advertisement that indicates a preference on prospective tenants or buyers; the two exceptions for certain dwellings (see above) does not apply to this prohibition.
● The Fair Housing Act (1968) does not bar discrimination based on sexual orientation or marital status (unmarried couples).
● The Fair Housing Act (1968) does not apply to shared living units, such as roommates living together in an apartment.
Civil Rights Act of 1866
● The Civil Rights Act of 1866 prohibits discrimination based on race in the leasing or sale or any type of property; however, it does not cover advertising.
● The Civil Rights Act of 1866 only applies to intentional discrimination.
