Transfers of Leaseholds and Landlord's Tort Liability Flashcards
Assignment vs. Sublease
- assignment = transfer of the entire remaining term of a lease
- vs. sublease = T retained some part of the remaining term, other than a right to reenter upon breach
Ability to Transfer Leasehold
- T may freely transfer in absence of prohibition in lease
- L can prohibit assignment or sublease w/o prior written approval
-> BUT once L consents to one transfer by T, L waives right to object to future transfers, unless L expressly reserves the right
Assignment - Features
- privity of estate - assignee stands in shoes of original T in direct relationship with L -> each is liable to the other on all covenants in the lease that run w/ the land
-> b/c covenant to pay rent runs directly w/ the land, assignee owes rent directly to L -> L can sue either assignee or original T for rent (although if assignee reassigns to someone else, their privity of estate ends + new person would be liable in that respect) - privity of contract - original tenant remains liable on original contractual obligations
Sublease - Features
- sublessee = T of original T -> usually pays rent to original T
- L + S are in neither privity of K nor privity of estate -> S is only responsible to T1 unless S expressly assumes covenants
- sublease would automatically terminate with the main lease (L can terminate for nonpayment of rent or other breaches if lease or statutes so state)
Sublease - Rights of Sublessee
- sublessee cannot enforce any covenants made by L in the main lease
- EXCEPT a residential sublessee may be able to enforce the implied warranty of habitability against L
Covenants Against Assignment or Sublease
- L can prohibit T from assigning or subleasing w/o L’s prior written approval
-> considered waived if L knew of something + did not object - lease covenants against assignment + sublease are strictly construed against L (prohibiting assignment doesn’t automatically prohibit subleasing
- if T violates such covenant, L can usually terminate or sue for damages, but the transfer is not void
Assignment by Landlords
- L may assign rents + reversion interest they own
- usually done by deed when L conveys a building to a new owner
- T’s consent NOT required
Assignment by Landlords - Rights of Assignee Against Tenants
- once T are given reasonable notice, they must pay rent to new owner as L
- benefit of all T covenants that touch + concern land run w/ estate to new owner
Assignment by Landlords - Liability of Assignee to Tenants
- burden of L’s covenants that touch + concern land run w/ estate to assignee -> assignee liable for performance
- original L also remains liable on all covenants they made in the lease
Common Law of Caveat Lessee
- L under no duty in tort to make premises safe
Exceptions - CLAPS:
- Common Areas
- Latent Defects
- Assumption of repairs
- Public use rule
- Short-term lease of furnished dwelling
Caveat Lessee - Common Areas
- L has duty of reasonable care in maintaining all common areas
Caveat Lessee - Latent Defects Rule
- L must warn T of hidden defects (i.e. dangerous condition that T couldn’t discover by reasonable inspection) of which L has knowledge or reason to know
-> otherwise, L liable for any injuries resulting from the condition - if T accepts premises after disclosure, T assumes risk + L no longer liable in tort
-> note that L’s obligation in tort is a duty to warn, not to repair
Caveat Lessee - Assumption of Repairs
- in tort, L is technically under no duty to make repairs
- BUT once repairs undertaken, L must complete them w/ reasonable care
Caveat Lessee - Public Use Rule
- L who leases public space + who should know, b/c of significant nature of defect + short length of lease, that T will not repair, is liable for any defects on premises that cause injury to members of public
Caveat Lessee - Short-term Lease of Furnished Dwelling
- L who rents fully furnished premises for short period is under a stricter duty
- responsible for ANY defective condition which proximately injures a T (whether or not they knew of the defect)
Modern Trend - General Duty of Reasonable Care
- many courts now hold L owes general duty of reasonable care toward residential T’s
- L will be held liable for injuries in tort resulting from ordinary negligence if L had notice of defect + opportunity to repair
Tort Liability - Modern Trend: Defects Arising After T Takes Possession
- L generally held to have notice of defects existing BEFORE T takes possession but NOT liable for those arising AFTER T takes possession unless L knew or should’ve known of them
Tort Liability - Modern Trend: Legal Duty to Repair
- if L has a statutory duty to repair, L liable in tort for injuries resulting from failure to repair or negligence in making repairs
Fixtures
- fixture = chattel that has been so affixed to land that it has ceased being personal property + has become part of the realty
- passes w/ ownership of land + must stay put
Chattels Incorporate into Structure
Fixture when:
- incorporated into the realty so that they lose their identity
- when removal would cause considerable damage to premises
Fixtures - Common Ownership
- person who brings the chattel to the land owns both chattel and the land
-> item = fixture if party who made the annexation objectively intended to make it part of realty
Determined by:
- nature of the article
- manner of attachment
- amount of damage that would be cause by its removal
- adaptation of the item to the use of the realty
Fixtures - Divided Ownership Cases: L + T
- for L + T scenario, agreement between L + T would be binding on whether item = fixture
-> w/o agreement, T is deemed to lack intent to permanently improve the property -> may remove chattels if removal doesn’t substantially damage premises or destroy the chattel - annexed chattels must be removed by end of lease term (or reasonable time after termination of indefinite tenancy)
- T responsible for repairing any damage caused by removal
Fixtures - Life Tenant and Remainderman
- same rules as L + T, except life enant’s representative may remove annexations w/in reasonable time after life tenant’s death
Fixtures - Licensee or Trespasser and Landowner
- licensees treated much like tenants, vs. trespassers normally lose their annexations
- absent statute, good faith trespasser or adverse possessor cannot remove fixtures (though some courts would allow good faith trespasser to recover)
