Transfers of Leaseholds and Landlord's Tort Liability

Question 1

Assignment vs. Sublease

Answer 1

• 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

Question 2

Ability to Transfer Leasehold

Answer 2

• 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

Question 3

Assignment - Features

Answer 3

• 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

Question 4

Sublease - Features

Answer 4

• 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)

Question 5

Sublease - Rights of Sublessee

Answer 5

• 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

Question 6

Covenants Against Assignment or Sublease

Answer 6

• 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

Question 7

Assignment by Landlords

Answer 7

• 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

Question 8

Assignment by Landlords - Rights of Assignee Against Tenants

Answer 8

• 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

Question 9

Assignment by Landlords - Liability of Assignee to Tenants

Answer 9

• 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

Question 10

Common Law of Caveat Lessee

Answer 10

• 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

Question 11

Caveat Lessee - Common Areas

Answer 11

• L has duty of reasonable care in maintaining all common areas

Question 12

Caveat Lessee - Latent Defects Rule

Answer 12

• 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

Question 13

Caveat Lessee - Assumption of Repairs

Answer 13

• in tort, L is technically under no duty to make repairs
• BUT once repairs undertaken, L must complete them w/ reasonable care

Question 14

Caveat Lessee - Public Use Rule

Answer 14

• 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

Question 15

Caveat Lessee - Short-term Lease of Furnished Dwelling

Answer 15

• 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)

Question 16

Modern Trend - General Duty of Reasonable Care

Answer 16

• 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

Question 17

Tort Liability - Modern Trend: Defects Arising After T Takes Possession

Answer 17

• 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

Question 18

Tort Liability - Modern Trend: Legal Duty to Repair

Answer 18

• if L has a statutory duty to repair, L liable in tort for injuries resulting from failure to repair or negligence in making repairs

Question 19

Fixtures

Answer 19

• 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

Question 20

Chattels Incorporate into Structure

Answer 20

Fixture when:
- incorporated into the realty so that they lose their identity
- when removal would cause considerable damage to premises

Question 21

Fixtures - Common Ownership

Answer 21

• 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

Question 22

Fixtures - Divided Ownership Cases: L + T

Answer 22

• 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

Question 23

Fixtures - Life Tenant and Remainderman

Answer 23

• same rules as L + T, except life enant’s representative may remove annexations w/in reasonable time after life tenant’s death

Question 24

Fixtures - Licensee or Trespasser and Landowner

Answer 24

• 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)