Week 9 Flashcards
Under bilateral K model (rather than independent covenant), a serious breach could ___ but a less serious one __
lead to recission of lease and termination of future performance, only damages (like independent covenants)
Medico Dental says that restrictive covenants in a lease that ____
run up to entire consideration (without which would defeat purpose of the lease) are mutual and dependent
Medico Dental says that a L breaches a lease by failing to take action ___
to stop conduct by another tenant that amounts to a violation of a dependent covenant
Medico Dental holds that ___
the exclusivity clause was interdependent to promise to pay (essential to business success)
Implied warrant of habitability
implied in K for lease and makes lessee covenant dependent on continued habitability of the property
Most courts have made IWH ___
nonwaivable
R4P endorses IWH but provides ___
can be waived for consideration
Remedies for violating IWH
recission of lease (no more rent)
order directing SP
action for damages
Some jdxs allow ___ until L corrects IWH violation
withholding all or portion of rent
Javins says that leases ____ so ___
of urban dwellings have IWH, total breach extinguishes duty to pay rent
Rationale for IWH
(1) unequal bargaining power
(2) analogy to products liability
(3) L more capacity to inspect and maintain
When landlord transfers, the new landlord is bound by ___
covenants that run with the land
Running with the land requires __ + __
intent of parties + touch and concern the land (so related to land as to enhance value and confer benefit upon it)
Covenants to pay rent ___ touch and concern the land
DO
____ don’t touch and concern the land
Purely financial obligations (outside of rent), security deposits etc
Mullendor says a covenant runs with land _
only if touches and concerns the land
Mullendore says to be a running covenant a promise to pay money must __
restrict funds to uses that benefit the land itself
Mullendore holds that the ____ does not not run with the land
indemnification clause
privity of K
obligations that come from being a party to a binding bilateral K
privity of estate
obligations from OG lease that run with the land
For privity of estate, one party must ___
be in possession of property or have a reversion
Assignment
like alienation, prime lease transferred in full to assignee
In assignment there is ___ between L and assignee but they are in ___
no privity of K, privity of estate
In assignment, the prime tenant is still ___
in privity of K with L
Sublease
interest of subtenant carved out of interest of prime tenant (Prime T like L)
In sublease, prime tenant has ____ with L and subtenant is liable to __
privity of K, prime tenant (no privity of estate or K with L)
Jaber holds that the __ determines if instrument is assignment vs. sublease
intention of the parties
Inactive Ls will prefer ___ because ___
sublease, prime tenant serves as L
Active Ls prefer ___
assignment,
English rule for determining assignment vs. sublease
any instrument transferring for entire remainder of term is assignment
Mass rule for determining assignment vs. sublease
if sublessor reserves right of re-entry for nonpayment of rent it is a sublease
Jaber says the English rule __
arbitrary and disadvantages less sophisticated parties
Jaber holds that they intended an assignment because ___
title of document as assignment
Jaber court assumes that provision in OG lease providing for termination in event of destruction is __
not covenant running with land upon assignment to new tenant
Kendall holds that when a commercial lease permits assignment only with __ , then consent ___
prior consent of the L, may be denied only for commercially reasonable objection
Rationale for Kendall
(1) policy against restraint on alienation (lease is property)
(2) duty of good faith and fair dealing (lease as K)
(3) T gets benefits and losses from the lease
In common interest communities, common areas are ___ but persons have ___
owned and managed by specialized entity, individual possessory rights ownership rights equivalent to fee simple
Rationale for common interest communities
stability and some autonomy but still provides advantages of division of managerial authority
Condos
fee simple for unit + tenancy in common of common areas (no partition)
Coops are technically ___
corporations
Coops
residents own shares in corporation and then get long term renewable interest lease
if one fails to make payments others have to make up difference.
Associate subdivision
consists of standalone units but with certain facilities in common with other units
Problems with common interest communities
decisions may not always be the most efficient, transaction costs of decision making
CCRs act as __
constitution of CIC
HOAs act as ___
voting public of CIC
Rules and regulations passed by HOAs are ___ but changes to CCRs passed by HOAs are ___
initiatives, amendments
Under Nahrstedt, courts will defer to ____ but will generally ____ (Kiekel)
judgment of CCR provisions, stricter review to rules/regs adopted by HOAs or Boards
Why more deference to CCRs?
unanimous consent whereas HOA rules susceptible to majority rule issues
NY applies ____ to coops under Pullman
business judgment rule (deference to corp over tenant) in evaluating co-op board actions
Nahrstedt holds that restrictions in master deed of CIC are ___
presumed reasonable unless they are clearly arbitrary or contrary to public policy
Nahrstedt holds that the pet restriction was ___
rationally related to resident health and noise concerns
Nahrstedt says that use restrictions in CIC are crucial to ___
stability, predictability, owner reliance interests
Nahrstedt is worried about ___
costs of lawsuits to seek individual exemptions
Nahrstedt dissent says the restrictions on cats are ___
arbitary/unreasonable and frays social fabric with little offset benefiting land
Pullman held that since D could not ____ the board’s decision was presumed appropriate
show that the board acted outside scope of its authority in a way that didn’t further corporate purpose or in bad faith
Kiekel says ___ important attribute of property that can’t be prohibited unless __
right to rent, clearly proscribed in CIC declaration
Kiekel says declaration didn’t explicitly ___ but implicitly __
prohibit or permit renting, allowed by defining “resident” as including “tenants of owners”
