LANDLORD-TENANT RELATIONS

Types of Tenancy

(1) Tenancy for Years (2) Periodic Tenancy (3) Tenancy at Will (4) Tenancy at Sufferance

Not to Commit Waste: Relationship to Law of Fixtures

- Waste can apply in relation to fixtures as well. -If a tenant installs a fixture, if he damages the fixture or the underlying property when he leaves he can be liable for damaging the fixture and damaging the property. -However, if the chattel is easy to remove, then it is probably not a fixture -If it is hard to remove without destroying the underlying real property, it is probably a fixture.

DISCRIMINATION IN SELECTION OF TENANTS: In General

-A landlord can refuse to rent to a tenant for any reason; A landlord is free to do what he wishes with his property, and to rent or not to rent to any given person at his whim. (A fundamental right of property ownership is the right to exclude.) (Ex. Kramarsky- the court held the landlord could exclude a lawyer from renting his property simply because she was "undesirable.")

"Tenancy at Sufferance"

A tenancy at sufferance (holdover tenancy) exists for the period after the expiration of a lease during which the tenant remains on the premises without the landlord's permission. A tenancy at sufferance is terminated if the tenant vacates the premises or the landlord evicts the tenant. In such case, the tenant is obligated to pay the reasonable value of his use and occupancy of the premises, which typically is a daily rate determined by reference to the previous rent

To Maintain Common Areas

Under common law, the landlord is responsible for injuries occurring only in common and public areas or in non-common areas under the landlord's control, or those occurring as a result of a hidden defect or faulty repair completed by the landlord or the landlord's agent. The modern trend is to hold landlords to a general duty of reasonable care. This means that a landlord may be liable for (i) existing defects prior to the tenant's occupation of the premises, (ii) failure to make repairs required by a housing code, and (iii) at times, the criminal activity of third persons who injure tenants.

"Fixture"

a chattel that becomes a part of the real property if it is so attached to the real property that it is subsequently difficult to remove.

Tenancy for years

- A tenancy for years is an estate measured by a fixed and ascertainable amount of time. -The tenancy is established by a beginning and ending calendar date known in advance -A tenancy for years may be any length of time (e.g., one week, six months, fiveyears). Termination occurs automatically upon the expiration of the term, no notice is required.

Trade Fixtures:

- Chattel used in T's business -If T installed a pizza oven, bolting it to the floor, then this is a trade fixture. It remains with T. When T leaves, it does not become part of the real estate. T can remove it. However, T is not off the hook, since T can still be sued for waste for damaging the floor. Note: Fixtures in the recording acts: Fixtures may be given super priority status in the event of foreclosure if the bank records the fixture within 20 days of installation.

Not to Breach the Covenant of Quiet Enjoyment

- Every lease (both commercial and residential) contains an implied covenant of quiet enjoyment. - The landlord cannot substantially interfere with the tenant's peaceful enjoyment of the premises Any actions by the landlord that breach this covenant may amount to an actual or constructive eviction of the tenant.

Implied Warranty of Habitability Generally

- Generally, this is applicable only to residential leases, but it is occasionally in commercial leases. -Where the implied warranty of habitability has been recognized, it typically does not exist for single family homes because they have a stronger interest in land and a lot of people do their own maintenance when they own a single family house -UNLESS (ex. A landlord owned a 500 single family home complex, so that the living situation feels like an apartment complex... ambiguity with precision). -When there is a breach of the covenant of habitability, T still has to pay rent, not to L, but to an escrow account; this is because in the event the court finds this is not a total breach, but partial, then L may still be due that rent.

Assignment

- In most jurisdictions, a complete transfer of the tenant's remaining lease term creates an assignment -An assignee-tenant is in privity of estate with the landlord, and thus he is liable to the landlord for the rent and any other covenants in the lease that run with the lease. -Because the original tenant remains in privity of contract with the landlord (both are parties to the lease agreement), however, the original tenant remains liable for all the covenants in the lease for the duration of the lease, even after a successful assignment, unless the landlord relieves the original tenant of liability through a release or novation

LANDLORD LIABILITY IN TORTS CL

- In the Common Law, L had a duty to maintain common areas, which is true today, but there was no general rule of liability in negligence. -The Restatements of Torts followed a balancing test that involved balancing the harm of the defendant's conduct with the utility of his conduct. -Other jurisdictions believe that unreasonableness is simply a bright line or threshold test which requires no balancing.

Landlord liability in torts today

- L has a general duty of due care and a landlord may be sued for ordinary negligence if he does not act reasonably under the circumstances, regardless of whether he had control. - This will ensure that the landlord will take precautions reasonably necessary under the circumstances to reduce the likelihood of injuries from defects in his property. (Ex. Sargent- this considered an injury on a negligently created staircase. Under the common law, L has a duty to maintain the staircase in a non-negligent way. However, the court held that this no longer applies. L has a general duty of due care. The focus is no longer on control, but whether L acted reasonably under the circumstances.

Civil Rights Act of 1866

- Prohibits discrimination based on race - The statute ambiguously defined race. So, the court looks to who would have been considered of another "race" in 1866. (Ex. Jews can be considered a race under the Civil Rights Act)

Consent of the Landlord Required

- Some JDX follow the Common Law: The landlord can refuse to consent to a sublessor or assignee for any reason (except for statutory mandates) -Modernly, the majority approach is: The landlord can only withhold consent for a commercially objectionable reason. (Ex.'s bad credit) (Why? Good faith and fair dealing is implied in every K) -Other courts restrict this only to assignment, not to sublease.

Civil Rights Act vs. Fair Housing Act

- The Civil Rights Act of 1866 states that all citizens are to be treated as white citizens. This surely overlaps with the Fair Housing Act. -However, the Fair Housing Act exempts discrimination for selling private homes. There is no exemption in advertising. -On the other hand, the Civil Rights Act prevents racial discrimination in regard to real property transactions.

Frustration of Purpose

- The Doctrine of Frustration of Purpose holds that when an underlying purpose of the lease has been frustrated/cannot be carried out due to unforeseen circumstances, through no fault of the party seeking relief from the contract, the one seeking relief is excused from performing. (Narrow in terms of unforeseen circumstances; favoring landlord)

Fair Housing Act

- The Fair Housing Act prevents discrimination in the sale or removal of real property based on race, color, religion, sex, handicap, familial status or national origin.

rent control ordinances

- These ordinances have been held as constitutional, for they do not violate the Due Process and Equal Protection clauses of the 14th Amendment, (if they comply with minimal scrutiny.; Economic rights are given review with minimal scrutiny. City ordinances pass constitutional muster if the rationalization is related to a legitimate government purpose. - Tenant Hardship can be a factor in determining the rent control price.

Sublease

-A transfer for less than the entire duration of the lease creates a sublease -Because the sublessee is not in privity of estate or contract with the landlord, the sublessee is not liable to the landlord for the rent or any other covenants in the lease, but he is liable to the lessee

Duty to Provide Habitable Premises

-This warranty requires the landlord to maintain the property such that it is reasonably suited for residential use - Implied in every residential lease the landlord promises to deliver and maintain throughout the tenancy premises that are safe, clean and fit for human habitation -A condition that substantially threatens a tenant's health or safety violates this warranty.

Duty to Avoid Waste

1. Affirmative Waste - tenant is prohibited from commiting voluntary waste 2. Ameliorative Waste - a tenant is entitle to make changes to the physical condition of the leased property that increase the property value if reasonably necessary for the tenant to use the property in a reasonable manner, unless the landlord and tenant agree otherwise 3. Permissive Waste - A tenant has a duty, unless relieved by the terms of the lease, state statute, or local ordinance, to repair the premises to the extent necessary to maintain the premises in its pre-natal condition. An exception exists for normal wear and tear, unless the tenant contracts otherwise

Duty to Pay Rent Exceptions:

1. Destruction of the Premises: -The lease is terminated and the tenant is excused from paying rent if the premises are destroyed, such as by flood, as long as the tenant is not at fault for the destruction. At common law, the tenant's duty to pay rent was not excused simply because the leasehold premises were destroyed. 2. Material Breach of the lease by the landlord: -At common law, the doctrine of independent covenants usually prevented the tenant from avoiding the obligation to pay rent despite the landlord's material breach of the lease. However, even at common law, a landlord's breach of the covenant of quiet enjoyment gave the tenant the right to terminate the lease and cease paying rent. -Currently, most states give tenants various options with regard to the payment of rent if a landlord violates the implied warranty of habitability in a residential lease (e.g., establishment of an escrow account into which the rent is paid, deducting the cost of repairs incurred by the tenant from the rent paid).

Tenant Duties

1. Not to Commit Waste 2. To Pay Rent

LANDLORD DUTIES

1. To Deliver Possession To Maintain Common Areas 3. To Disclose Latent Defects 4.Not to Breach the Covenant of Quiet Enjoyment 5.Duty to Provide Habitable Premises 6. Duty to repair

If premises are not habitable, then the tenant may:

1. refuse to pay rent 2. remedy the defect and offset the cost against the rent, or 3. defend against eviction Generally, before the tenant can withhold the rent or remedy the defect, the tenant must first notify the landlord of the condition, if the landlord is unaware of it, and then give the landlord a reasonable opportunity to correct the condition. The tenant is not required to vacate the premises.

Periodic Tenancy

A periodic tenancy is a repetitive, ongoing estate measured by a set period (e.g., a month, a year) but with no predetermined termination date. Because a periodic tenancy automatically renews, notice is generally required to terminate this tenancy. - Ends when L or T gives notice -Notice of termination must be given before the beginning of the intended last period of the periodic tenancy. An oral notice of termination is sufficient under the common law to terminate a periodic tenancy. Under modern statutes, most states require some form of written notice.

RENT CONTROL

A rent control ordinance is enforceable if it complies with due process of law. It satisfies the minimum scrutiny test, that is, if it is rationally related to a legitimate government purpose, then legislation will be upheld; (Rent control ordinances limit the amount of money that a landlord can charge a tenant for rent.)

"Tenancy at Will"

A tenancy at will is a leasehold estate that does not have a specific term and continues so long as the landlord and the tenant desire. A tenancy at will can be created by the express agreement of the parties or by implication if the owner permits the tenant to occupy the premises, such as when the parties are negotiating the extension of an expired lease. Unless this tenancy is expressly created, the payment of rent by the tenant and acceptance by the landlord converts a tenancy at will into a periodic tenancy. A tenancy at will can be terminated by either the landlord or the tenant. At common law, a tenancy at will could be terminated by either party without advance notice, but the tenant had to be given a reasonable time in which to vacate the premises. By statute, most states now require that a party give advance notice (e.g., 30 days) in order to terminate a tenancy at will.

Constructive eviction

If the landlord breaches a duty to the tenant, such as failing to make a repair, that substantially interferes with the tenant's use and enjoyment of the leasehold (e.g., fails to provide heat or water), then the tenant's obligation to pay rent is excused due to constructive eviction only if the tenant gives notice and adequate time to permit the landlord to fulfill his duty and vacates the property within a reasonable amount of time.

Actual eviction

If the landlord removes the tenant from the premises, then the total eviction terminates the lease and ends the tenant's obligation to pay rent.

When is there a violation of the fair housing act?

If there is any disproportionate impact affecting minorities, even in the absence of bad faith There are no exclusions under the FHA in terms of publishing advertisements. (Ex. you could publish an ad that reads "no Jews"!)

Duty to Deliver Possession

In most states, a tenant is relieved of the obligation to pay rent if the landlord fails to deliver actual physical possession of the leasehold premises. The minority rule requires only that the landlord deliver legal possession.

Landlord Remedies for Tenant Breach

Most jurisdictions now statutorily recognize the right of a landlord to terminate a lease for nonpayment of rent. In addition, most leases themselves contain a forfeiture clause that permits a landlord to regain possession of the premises and terminate the lease if the tenant breaches a duty owed to the landlord. If the tenant remains in possession of the premises but fails to pay rent, then the landlord can sue for damages resulting from the breach as well as to remove the tenant from the property and terminate the lease.

Implied Warranty of Habitability

The landlord will deliver and maintain premises that are safe, clean, and fit for human habitation throughout the lease's duration; L breached an implied warranty of habitability if L failed to maintain the premises in a habitable condition; (Tenants do not pay for land but for a package of goods and services").

Tenancy for years: SoF

The lease agreement must be in a writing that: i) Identifies the parties; ii) Identifies the premises; iii) Specifies the duration of the lease; iv) States the rent to be paid; and v) Is signed by the party to be charged.

Duty to Repair

Under the common law, there was no implied duty on the part of the landlord to repair leased premises. However, the majority of jurisdictions today enforce an implied duty upon the landlord to repair under a residential lease, even when the lease attempts to place the burden on the tenant, except for damages caused by the tenant. Failure to make these repairs may constitute a constructive eviction or violate the implied warranty of habitability. In contrast, courts are reluctant to imply a landlord's duty to repair in commercial leases because the implied warranty of habitability does not apply in commercial leases.

Duty to Mitigate

Under the majority rule, a landlord must mitigate damages by making a reasonable effort to re-rent the premises. The landlord who re-rents the premises on the tenant's behalf may hold the tenant liable for any deficiency. The minority rule does not require the landlord to mitigate damages. Under the minority rule, a landlord who learns of the tenant's abandonment of the premises need not take any action.