Leaseholds

Tenant breaches contract by abandoning the premises. if there's no duty to mitigate damages, what can landlord do?

(1) Accept the surrender (2) Re-let the property (3) Sue for Damages Immediately (4) What and Sue

T occupies land under lease from L which provides for rent at the annual rate of $12,000 per year. The lease terminated on Dec. 31, 2016, but T has yet to move out. What are L's remedies?

(1) Eviction: L can evict T and recover damages for the value of occupation/any damages dealing with the holding over or 2-3x the rent in some states (2) New Lease: L can hold T to a new lease Majority Rule: periodic tenancy Minority rule New term of years

Lease has not expired but tenant stops paying rent or breaches part of the lease. What can L do?

(1) L can terminate the lease early to evict T if it's in the lease (2) Can use self-help if it's peaceful and not likely to cause violence (3) L can recover damages for lack of rent (can be 2 or 3 x the rent if you're in a holdover state or damages for breach

Remedies for violation of Implied warranties of habitability

(1) Rescission (2) Specific performance (3) Action for damages (4) Set off against rent liability (5) Withholding of all or a portion of the rent

L leases property to T for 10-year term. One month later T transfers his interest to T1 for 9 years and retains no interest.

- L leased property to T - T assigns property to T1

L leases property to T for 10-year term. One month later T transfers his interest to T1 for 9 years retaining the rights to retake the premises. What happened here?

- L leased property to T - T subleases to T1 - T has reversion

Covenants that Run with The land

A covenant runs with the land if (1) the original parties intended it and (2) if the covenant touches and concerns the land

Anticipatory Repudiation

A declaration by the promising party to a contract, that he or she does not intend to live up to his or her obligations under the contract.

Release

A grant letting someone out of their contract

Periodic Tenancy

A lease that automatically rolls over for a stated period of time, usually a year or a month Indefinite terms Inheritable, devisable, alienable Termination requires on period's notice or six months, but it may be modified by a statute

Term of Years

A lease that has a fixed term at which it terminates or ends Inheritable, devisable, alienable Must be in writing if it's to last more than a year Ends Automatically, neither landlord nor tenant is required to give notice to the other before terminating the relationship

Common Law Duty to Repair

A t common law a landlord has no duty to repair or maintain the premises

Holdover Tenant

A tenant that breaches his lease by remaining in possession of the land after the lease has expired

Landlord A and tenant B enter into a lease of Blackacre for a term of 5 years beginning January 1, 2017. B moves in but is later evicted by O, the true owner. What is the result?

Actual eviction by a third party. B wins in either jurisdiction because landlord is obligated to provide good title to the leasehold

Construction Eviction Elements - nirVana

After such reasonable time tenant vacated the premises

Fair Housing Act

Bars discrimination based on race, ethnicity, religion, etc. Exceptions doesn't apply to owner-occupied apartment with no more than four units or more than 3 single-family dwellings

Privity of Contract

Being in a contractual relationship

B leases to C. C then leases to A for the balance of the leasehold term. However, should A fail to make the rental payments to the landlord, the right to reenter and reclaim the premises is reserved. What is the state of the interest?

C assigns his lease to A A has lease subject to condition subsequent C has right of reentry/power of termination

Sublease

Carving out a lease from the original lease while grantor retains part of the transfer

Acceleration Clause

Clause that requires you to pay future rent for whatever specified amount of time if you violate the lease early - makes whatever is left unpaid due immediately

Assignment

Complete transfer of the entire remaining interest

Suppose Landlord's lease obligates the landlord to repair and maintain plumbing in the premises and the tenants storage closet floods. Landlord is repeatedly contacted about the repair but does nothing about it. Can tenant remove stored items and withheld rent for the affected portion?

Constructive Eviction Landlord - action could've been fixed by the landlord Substantially and materially - flooding qualifies as deprivation of use of enjoyment Notice to Repair- repeatedly contacted means he gave notice Vacates - Tenant removed items which shows vacated by partial eviction Yes so long as she withheld it from the time she vacated

Acceptance of surrender

Created by operation of law when the parties to a lease do some acts so inconsistent with the landlord-tenant relationship which implies their intent to deem the lease terminated

Percentage Reduction Formula

Develops a ratio between the difference of values of the premises if it's in compliance with the implied warranties against habitability and the value of the premises if it's not in compliance with the implied warranties against habitability over the value of the premises if it is compliance with the IWH and multiplies this ratio by amount reserved for reduction

Who does assignee owe rent to?

Directly to the landlord for the time he is in privity of estate - from the time of assignment until the end of the lease or until the assignee himself reassigns

Landlord A and tenant B enter into a lease of Blackacre for a term of 5 years beginning January 1, 2017. On that date, B is ready, willing, and able to take possession. H, a prior tenant, holds over precluding B's entry to the premises. The lease is silent on the issue. Is A liable to B for damages? Does B have other remedies?

Duty to Deliver Possession English Rule/ AL - Yes. A has a duty to deliver the possession free and clear of all squatters on the day first day of the lease. A can recover damages for the price of having to find a new place or for money lost at a job and terminate the lease American Rule - No. A only has a duty to give legal right to possession. B must evict squatter himself

Duty to Delivery Possession of the Premises

English/AL Rule: Landlord has a duty to put the tenant in actual possession of the premises at the beginning of the leasehold term. American Rule: landlord has a duty to give the tenant the legal right to possession. Tenant is recovered to damages for finding a more expensive housing or job money loss

Landlord may terminate the lease at its option in the event of violation of many of the tenant's lease covenants

Forfeiture Clause

Landlord may terminate the lease reenter and retake the premies if tenant violates covenants of lease

Forfeiture Clause

Re-let the property

Give notice to the tenant that the implied offer to surrender is not accepted Tenant remains liable for the rent Any changes to the lease can amount to an acceptance of surrender notwithstanding the landlord's intent not to do so

What happens when an assignee reassigns the leasehold interest? What happens if the new assignee fails to pay rent?

His privity of estate ends and the new assignee is in privity of estate. Tough luck! the first assignee is not liable unless he specifically promised he would be for the remainder of the lease term in which case he would be obligated to pay based on privity of contract

Privity of Estate

Holding the full interest in the land

Housing Regulations

Housing regulations imply a warranty of habitability

Assumption by Sublessee

If the sublessee expressly assumes the rent covenant and other covenants he is bound by the assumption and becomes personally liable to the landlord on the assumed covenants. The landlord is considered a third-party beneficiary of the assumption agreement

Forfeiture Clause

If you want to be able to evict someone for breaching the lease agreement there now must be a clause in the written lease

Covenant of Quiet Enjoyment

Implied covenant that neither the landlord nor someone with paramount title will interfere with the tenant's quiet enjoyment and possession of the premises

What covenants can a sublessee enforce?

Implied warranty of habitability against landlord

Sue for damages immediately

Invoke contract doctrine of anticipatory repudiation lease terminates and rent is no longer due Contract damages remain

Common Law Caveat lessee Rule

L has no responsibility for the quality of the leased premises and no obligation to repair

L leases to T for a term of three years at a monthly rent of $1,000. T covenants "to keep the leased premises in good repair. Six months later, T assigns her entire interest to T1, who agrees in the instrument of assignment to "assume all the covenants in the lease" between L and T; three months later T1 assigns his interest to T2, and three months after that T2 assigns his entire interest to T3. T3 defaults on rent payments and fails to keep the premises in good repair. L sues T, T1, T2, and T3, what is the result?

L v T: T term of years lease with a covenant that runs with the land .˙. there's privity of contract and L can sue T L v T1: T gets assignment where he expressly agrees to assume the covenants running with the land .˙. L can sue T1 L v T2: Privity of estate ends when he assigned it so he can't sue him L v T3: Privity of estate is still running here .˙. L can sue T3 only responsible for covenants running with the land

Constructive Eviction Elements Lola Sings NirVana

Landlord Substantially and materially deprived Notice and a reasonable time to repair Vacated the premises

Consequences of Assignment with respect to privity

Landlord and assignee are in privity of estate and each is liable on all covenants that run with the land

Constrictive Eviction Elements - Lola

Landlord breached a duty to tenant

Breach of Covenant to Pay with Sublessee

Landlord can terminate the main lease for nonpayment of rent which will automatically terminate the sublessee's lease.

Acts that Do Not Constitute Acceptance of Surrender

Landlord enters premises after abandonment to make repairs, receives keys, offers or attempts to relet on behalf of the tenant

Duty to Mitigate Damages

Landlord has a duty to make a reasonable effort in repossessing the premises or getting someone to repossess it Doing so does not relieve the tenant of liability for future rent

Pros to the English Rule for Duty to Deliver Possession

Landlord is in the best position to engage with the holdover tenant

Pros to the American Rule for Duty to Deliver Possession

Landlord is not being held liable for the wrongful acts of another party Forces tenants to ensure it is in the lease

Acts that Constitute Acceptance of a surrender

Landlord resumes possession of the premises for himself Tenant is absolved from liability

Tenancy At Will

Lease that lasts so long as both parties agree Terminable at any time by either party (10 days in AL) Created expressly or by operation of law Lease "to A so long as A and B agree"/Lease without agreement as to rent amount or term Neither alienable, devisable, nor inheritable

What happens if the landlord has a holdover tenant in regards to his duty to deliver possession of the premises?

Majority: Landlord is in breach if he hasn't evicted the hold-over tenant Minority: Up to the tenant to bring eviction proceedings against hold-over tenant

Novation

New lease between a landlord and assignee

Is there a duty to mitigate damages in the commercial context?

No, right now it is only in the residential context

In 2012. Tenant rents a townhouse from landlords. The house burns down. Does the tenant have to pay rent?

No.

Landlord A and tenant B enter into a lease of Blackacre for a term of 5 years beginning January 1, 2017. Blackacre was available for occupancy on January 1, but B didn't get around to moving in until January 4, when S entered onto Blackacre, preventing B's occupancy. Can B sue A?

No. Trespasses after the start of the lease are the tenants responsibility

Tenancy At Sufferance

Not always regarded as a lease, more of a label for someone who used to be a tenant but is no longer a tenant Name for someone whose lease has expired but who has not left the premises enables landlord to elect either to evict or to hold tenant to a new term

Does failure to repair excuse tenant from paying rent?

Not unless it's linked to implied warranty of habitability

Partial Eviction

Occurs when the tenant is physically excluded from only part of the leased premises. Remedies for breach differ on based on who caused it

Touch and Concerns the land

Promise must be so related to the land as to enhance its value and confer a benefit upon it - Benefits the landlord and/or burdens the tenant and vice versa

Under what circumstances can you enforce a promise that was entered into by an original landowner?

Promises that run with the land Must Ask whether the parties intended the covenant to run, and whether the covenant touches and concerns the land

Actions to show you've made a reasonable effort in mitigating damages

Putting the rental back on the market Treating the market like it's vacant, showing it off to others

Partial Eviction by Landlord

Relieves the tenant of the obligation to pay rent for the entire premises

Partial Eviction by Third Party

Results in an apportionment of the rent - tenant is liable for the reasonable rental value of the portion he continues to possess

Exceptions to the Caveat Lessee

Short term lease of furnished dwelling Fraudulent misrepresentation actionable (this includes the duty to disclose a latent material defect Landlord's duty to maintain common areas Landlord's duty to carefully under take any promised repairs Landlord's duty to abate nuisances/immoral conduct

Ways to show remedies for damages related to implied warranties of habitability

Straight forward damages method Fair Market Rental Percentage Reduction Formula

Consequences of a Sublease

Sublessee is considered a tenant of the originally lessee, pays rent directly to the originally lessee who pays rent to the landlord

Repudiation

Surrender

L leases to T for a term of 3 years at a monthly rent of $1,00. The lease provides that T shall not sublet or assign without permission of L. Six months later T, with the permission of L, transfers to T1 for the balance of the term. Thereafter, T1 pays rent directly to L for several months then default. L sues T for rent due. What is the result? What if T argues that L consented to the assignment

T assigned lease to T1 so T is no longer in privity of estate, but he is in privity of contract with L. So L can sue T1 and T. Consenting to the assignment doesn't remove privity of contract T needs a release or novation

L leases to T for a term of 3 years at a monthly rent of $1,000. One year later T "transfers, subleases, and assigns" to T1 for a period of one year from date." Thereafter T nor T1 pays the rent to L. What rights has L against T or T1?

T has a term of years lease T subleases to T1 for 1 year with a power of reentry. L v T: L and T are in privity of estate and privity of contract .˙. can sue T because he has violated his duty to pay rent L v T1: L and T1 are only in privity of contract .˙. L cannot sue T1, but L can evict T1 by terminating the main lease

Straightforward Damage Method

Take the rent reserved under the lease and subtract the value of the premises in their noncompliant condition

Constructive Eviction Remedies

Tenant may terminate the lease and be relieved of her duty to pay from the date of abandonment and may also seek damages

Accepting Surrender

Terminates the lease Action for consequential damages is till possible There is a danger for the landlord inadvertently accepting surrender and terminating the lease.

Constructive Eviction Elements - Sings

The breach substantially and materially deprived the tenant of her use and enjoyment of the premises (ex. flooding absence of heat in winter, loss of elevator service)

Who is the sublessee in privity of contract with? Who is the sublessee in privity of estate with?

The sublessee is in privity of contract with the sublessor, but not with the landlord. The sublessee is not in privity of estate with anyone cause he doesn't own the tenant's full estate

Who does a sublessee pay rent to?

The sublessor, he is not personally responsible to the landlord for rent or the performance of any other covenants made by the original lessee.

Construction Eviction Elements - Nirvana

The tenant gave the landlord notice and a reasonable time to repair

If landlord repossess/relets the premises and they have not accepted surrender

The tenant remains liable for the differences between the promised rent and the fair market value

Wait and Sue

This goes with the typical property conception of a leasehold as a term of years. There is a trend to move away from this toward a contract conception with a duty to mitigate damages

Assignment Requirements

Transfer must be on the same terms as the original lease except that the tenant has reserved his power of termination/reentry in case of breach

Implied Warranty of Habitability

Unwaivable default rule that the landlord has an obligation to deliver and keep the property in habitable conditions. Can be waived in some jurisdictions. Tenant can assume habitability for the duration of the lease - Safe,clean, and fit for human habitation

Fair Market Value Rental

What the fair market rental would be if the premises were in compliance with thew implied warranty against habitability and then subtract the value of the premises in their noncompliant condition

Actual Eviction

When a landlord, title holder, or hold-over tenant excludes the tenant from the entire leased premises. Terminates the tenant's obligation to pay rent

When does a promise to pay money touch and concern the land

When it restricts the use of the funds to the benefit of the property

Constructive Eviction

When landlord's breach of duty renders the premises unsuitable for occupancy. Tenant must prove elements of eviction.

Back in 1600. Tenant rents a townhouse from landlords. The house burns down. Does the tenant have to pay rent?

Yes

Do you have to satisfy your covenant to pay rent if your landlords fails to repair?

Yes.

Covenant to Pay Rent

You have to pay rent regardless of unless the landlord fails on his covenant of quiet enjoyment

If landlord repossess/relets the premises and they have accepted surrender

the abandoning tenant is free from any rent liability accruing after abandonment

Untentable

unsuitable for occupancy

Does this run with the land Covenant regarding the duration of the lease (termination clause)

yes

Does this run with the land Covenant regarding the duration of the lease? (termination clause)

yes

Does this run with the land Covenant to do or not to do a physical act? (ex. repair, conduct business, supply heat)

yes