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Property > Transfers of Leaseholds > Flashcards

Transfers of Leaseholds Flashcards

1
Q

Transfer of Leasehold - The Assignment V.S. the Sublease

A
  • Absent some prohibition in the lease, tenant may freely transfer their interest in whole (an assignment - transfer of entire remaining term of a lease) or in part (sublease- tenant has retained some part of remaining
    term, other than a right to reenter upon breach).
  • In the lease, LL can prohibit tenant from assigning/ subletting w/o LL’s prior written approval.
  • However, once LL consents to 1 transfer by tenant, LL cannot object to future transfers by that tenant, unless LL expressly reserves the right
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2
Q

Tip

A

Transfer will be considered a sublease, rather than an assignment, only when original tenant reserves time for herself (Ex. the last month of the lease).

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3
Q

The Assignment

A
  • An assignee stands in shoes of original tenant in a direct relationship w/ LL (assignee & LL are in “privity of estate,” & each is liable to the other on all covenants in the lease that “run with the land.”)
  • After assignment, original tenant is no longer in
    privity of estate w/ LL, but their lease K remains in effect & enforceable.
  • Original tenant remains liable on original K terms, such as to pay rent (privity of K).
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4
Q

Assignment: Covenants that Run with the Land

A

A covenant runs w/ the land if original parties so intend & if it “touches & concerns” the land (benefits LL & burdens tenant (vice versa) w/ respect to their property interest).

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5
Q

Assignment: Rent Covenants

A
  • B/c a covenant to pay rent runs w/ the land, assignee owes rent directly to LL.
  • If tenant’s assignee fails to pay rent (or breaches another covenant), LL can sue assignee b/c of privity of estate and, if assignee cannot pay, can also sue original tenant b/c of privity of K.
  • If assignee reassigns leasehold interest, their privity of estate w/ LL ends, and they have no liability for subsequent assignee’s failure to pay rent
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6
Q

The Sublease

A
  • Sublessee is tenant of original lessee & usually pays rent to original lessee, who pays LL.
  • Sublease occurs when T1 transfers less than her entire interest to T2.
  • LL & sublessee are not in privity of estate nor privity of K.
  • T2 is responsible to T1 & vice versa.
  • Sublessee is not personally liable to LL for rent/ performance of any covenants in main lease unless sublessee expressly assumes covenants
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7
Q

Tip

A

If there’s a sublease, relationship between LL and T1 remains fully intact. Ex. if T2 fails to pay rent, L proceeds against T1 & T1 in turn proceeds against T2. If the residential premises betray IWH, T2 proceeds against T1 & T1 in turn proceeds against L.

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8
Q

Sublease: Landlord’s Remedies

A
  • LL may terminate main lease for nonpayment of rent/breach of other covenants if lease so states/ power is given by statute
  • Sublease automatically terminates w/ main lease.
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9
Q

Sublease: Rights of Sublessee

A
  • Sublessee cannot enforce any covenants made by LL in main lease, except a residential sublessee may be able to enforce IWH against LL
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10
Q

Covenants Against Assignment or Sublease

A
  • In the lease, LL can prohibit tenant from assigning/subletting w/o LL’s prior written approval.
  • A valid covenant against assignment is considered waived if LL was aware of assignment & did not object (ex. by knowingly accepting rent from assignee).
  • Once LL consents to 1 transfer by tenant, he cannot object to future transfers by that tenant, unless LL expressly reserves the right (known as the Rule in Dumpor’s Case).
  • Covenant prohibiting assignment does not prohibit subleasing & vice versa
  • Note: If tenant assigns/ sublets in violation of lease provision, LL usually may terminate lease/ sue for damages, but transfer is not void.
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11
Q

Assignments by Landlords

A
  • LL may assign rents & reversion interest they own.
  • Usually done by deed when LL conveys a building to a new owner.
  • Tenants’ consent not required.
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12
Q

Rights of Assignee Against Tenants—Attornment

A
  • Once tenants are given reasonable notice of assignment, they must recognize and pay rent to new owner as LL.
  • The benefit of all tenant covenants that touch & concern the land runs to new owner.
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13
Q

Liabilities of Assignee to Tenants

A
  • Burden of LL’s covenants that touch & concern the land runs to assignee
  • Assignee is liable for performance of covenants.
  • Original LL also remains liable on covenants
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14
Q

LANDLORD’S TORT LIABILITY: Common Law of Caveat Lessee

A
  • CL norm is: Let tenant beware.
  • In tort, LL was under no duty to make premises safe.
  • The 5 exceptions to caveat lessee: CLAPS:
  • Common areas
  • Latent defects
  • Assumption of repairs
  • Public use rule
  • Short-term lease of furnished dwelling
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15
Q

Landlord Tort Liability: Common Areas

A
  • LL has duty of reasonable care in maintaining all common areas (ex. hallways, stairwells, elevators).
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16
Q

Landlord’s Tort Liability: Latent Defect Rule

A
  • LL must warn tenant of hidden defects (dangerous condition that tenant couldn’t discover by reasonable inspection) of which LL has knowledge/ reason to know.
  • Otherwise, LL will be liable for any injuries resulting from condition.
  • If tenant accepts premises after disclosure, tenant assumes the risk; LL is no longer liable in tort.
  • Note: LL’s obligation in tort is a duty to warn, not a duty to repair.
17
Q

Landlord’s Tort Liability: Assumption of Repairs

A
  • While in tort LL is under no duty to make repairs, once repairs are undertaken, LL must complete w/ reasonable care.
18
Q

Landlord’s Tort Liability: Public Use Rule

A
  • LL who leases public space (ex. a convention hall/ museum), and who should know, b/c of significant nature of defect & short length of lease, that tenant will not repair, is liable for any defects on premises that cause injury to the public.
19
Q

Landlord’s Tort Liability: Short-Term Lease of Furnished Dwelling

A
  • A LL who rents a fully furnished premises for a short period (ex. a summer cottage) is under a stricter
    duty.
  • Such LLs are responsible for any defective condition which proximately injures tenant (whether/not they knew of defect).
20
Q

Modern Trend—General Duty of Reasonable
Care

A
  • Many cts now hold that LL owes a general duty of reasonable care toward residential tenants, and will be held liable for injuries in tort resulting from ordinary negligence if LL had notice of a defect & opportunity to repair it.
21
Q

General Duty of Reasonable Care: Defects Arising After Tenant Takes Possession

A
  • LL generally is held to have notice of defects existing b/f tenant took possession but is not liable in tort for defects arising after tenant takes possession unless LL knew/should have known of them.
22
Q

General Duty of Reasonable Care: Legal Duty to Repair

A
  • LL has a statutory duty to repair (ex. housing codes
  • LL is liable in tort for injuries resulting from LL’s failure to repair/negligence in making repairs.
23
Q

General Duty of Reasonable Care: Security

A
  • Some cts hold LL s liable in tort for tenant injuries inflicted by criminal conduct of 3rd parties in cases where LL failed to comply w/ housing code provisions dealing w/ security, maintain ordinary security measures, or provide advertised security measures (ex. surveillance cameras).
24
Q

Tenant’s Liability

A
  • DOC owed by tenant, as an occupier of land, to 3rd persons is discussed in Torts outline
25
Q

FIXTURES

A
  • A fixture is a chattel that has been so affixed to land that it has ceased being personal property and has become part of the realty.
  • A fixture must stay put.
26
Q

CHATTELS INCORPORATED INTO STRUCTURE

A
  • How to tell that a given chattel is a fixture & must stay put: 2 ways to tell.
  • First, when items are incorporated into the realty so that they lose their identity.
  • Second, a chattel affixed to realty is a fixture when its removal would cause considerable damage to the premises.
  • Ex. plumbing, heating ducts, a furnace.
27
Q

COMMON OWNERSHIP CASES

A
  • A common ownership case is one in which the person who brings the chattel to the land owns both chattel and land (ex. X installs a furnace in his home).
  • That item is a fixture if party who made the annexation objectively intended to make item part of the realty.
  • This intention is determined by: the nature of the article, the manner of attachment, the amount of damage that would be caused by its removal, and the adaptation of the item to the use of the realty.
28
Q

DIVIDED OWNERSHIP CASES

A
  • In divided ownership cases, chattel is owned & brought to the realty by someone other than landowner (ex. by a tenant, licensee, or trespasser).
  • Accession describes annexor’s intent to make chattel a permanent part of the real estate.
29
Q

Divided Ownership Cases: Landlord-Tenant

A
  • Suppose that a tenant installs a chandelier onto the leased premises’ ceiling.
  • An agreement between LL & tenant is controlling on whether an annexed chattel is a fixture.
  • Absent an agreement, tenant is deemed to lack intent to permanently improve property, and thus may remove his chattels if removal does not substantially damage the premises/destroy the chattel.
  • Annexed chattels must be removed by end of lease term (or w/in a reasonable time after termination of an indefinite tenancy), and tenant is responsible for repairing damage caused by removal.
30
Q

Divided Ownership Cases: Life Tenant and Remainderman

A
  • The same rules apply in life tenant remainderman context as in LL-tenant situations, except life tenant’s rep may remove annexations w/in a reasonable time after life tenant’s death.
31
Q

Divided Ownership Cases: Licensee or Trespasser and Landowner

A
  • Licensees are treated much like tenants, whereas trespassers normally lose their annexations.
  • Thus, absent a statute, an adverse possessor/ good faith trespasser cannot remove fixtures (e.g., house erroneously constructed on a parcel that
    possessor believed she owned).
  • Some courts, however, allow a good faith trespasser recovery measured by the value added to the land (not construction costs).

Property (20 decks)

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