Property Unit 1 - Leasehold Estate/Lease

Assignment

1. A transfer of rights to possession that must be in writing and must also have a verb including, convey, transfer, deliver, and assign. 2. Assignment does not change the privity of contract, but it does change the privity of estate. 3. Once you assign your rights, you can't get that right back

Breach of Covenant of Quiet Enjoyment

1. Actual Eviction 2. Constructive Eviction

Constructive Evidence by Landlord of Breach of Quiet Enjoyment

1. Any wrongful act or omission by: a.) landlord; b.) 3rd party claiming by, through or under the landlord with superior title; OR c.) Other third party with superior legal title 2. Which renders premises Either: a.) substantially unsuitable for the purpose for which they are leased; OR b.) Seriously interferes with beneficial enjoyment of premises AND 3.) Tenant thereafter abandons (T required to abandon premises)

Actual Eviction

1. By landlord - the landlord wrongfully evicts/or forces the tenant off the premises 2. actual eviction by the third party with paramount title (claiming through or under landlord)

Covenant of Quiet Enjoyment

1. Express 2. Implied

Silent on sublease consent (common law)

1. If the lease is silent on the landlords consent, there is no implied prohibition against assignments if all things are equal. 2.If the lease says you cannot assign, you can still sublease because the lease lease is silent on subleasing. Even if there is a prohibition its flexible. 3.If there is no express prohibition in the contract stating the tenant can't assign, then they can assign. The only exception is when the lease is more or a partnership than a lease.

Chain of Landlord lawsuit: sublease

1. In a sublease, the landlord can sue the original tenant (sublandlord) on privity of contract AND privity of estate. 2. The landlord cannot sue the subtenant on anything unless the subtenant assumed the lease. 3. In a sublease, the original tenant is now the sublandlord, making it not a suretyship, but instead a sublease suit.

Lease characteristics

1. Intended as a lease 2. Words: lease, tenant, landlord, terminable 3. Tenant has more control - landlord has less 4. Tenant has the right to exclude 5. Possession 6. No power to revoke tenant's rights to possession

License characteristics

1. Intended as a license 2. Words: license, licensee 3. Licensee has less control - owner has greater control 4. Licensee has less of a right to exclude the owner 5. specify use only 6. license/K law remedies specified owner retains right to revoke

Factors in determining between a license and lease

1. Intentions of the parties 2. Number of restrictions on use 3. The exclusivity of possession 4. The degree of control retained by the granting property 5. The presence or absence of incidental services

Reasonable factor to withhold consent

1. Landlord can't get more than bargained for 2. Increase in the fair market value does belong to the landlord 3. Consent is not a way for the landlord to make more money 4. It must be related to a real property interest. 5. It must protect the landlord in the ownership and operation of the property. 6. It can not be personal taste or the convenience of the landlord. 7. It can only be for the protection of the landlord in its ownership and operation of the property, not for general economic protection.

Privity of estate

1. Lease as conveyance 2. the legal relationship between the holder of the reversionary right (landlord) and the holder of the legal possession

Actual v legal possession

1. Legal - When the tenant has the legal right to the premise 2. Actual - When the tenant takes physical possession. The duty to deliver from the landlord is only the same day the lease begins. If a trespasser comes 2 days after the lease begins, the tenant needs to take it up with the trespasser, not the lessor. - For both: If there is an express provision, express provisions will govern. If lease is silent, then statute applied default rule.

Ny Warranty of Habitability

1. Mandatory Rule 2. Applied to all leases for residential purposes

Surety

1. One who has become legally liable for the debt, default or failure in duty of another (the original tenant). 2. It allows the person who is legally obligated to pay the rent, to go after the person who ought to pay 3. If the LL can sue both, he can choose a person to sue. 4. You get the same rights as the landlord, if the landlord has no rights neither do you.

Reasons for the UK Rule

1. The landlord is in a better position to know if someone is already in possession of the estate. 2. The tenant intended to enter into the apartment and not find the holdover. 3. Between old an new leases the landlord is the only one with the right to evict.

In favor of the US rule

1. When T1 holds over, T2 should require damages against the wrongdoer. the landlord didn't do anything wrong and its outside of his control. 2. T2 can sue just as much as the Landlord, so why should the landlord have to sue. 3. T2 should have a contract provision because it is foreseeable that there might be a holdover.

Holy Properties v. Kenneth (3 rules)

3 options when the tenant abandons: 1. Do nothing and collect full rent from T 2. Accept the tenant's surrender (termination of lease), re-enter premises and relet premises for the landlord's own account (tenant has no liability) 3. Notify the tenant that the landlord is entering and reletting for the tenant's benefit (money goes to the landlords expenses, then to the tenant's rent liability and the tenant is still liable)

Periodic Tenancy

A lease for a period of some fixed duration that automatically continues unless the landlord or tenant gives notice of termination, like month-to-month or year-to-year. If there is no notice given, the lease is automatically extended for another period.

Term of Years

A lease with a term of years, says when the lease will terminate, and therefore notice of termination is not required

Holdover tenant

A person who used to be a tenant, but is considered a trespasser because when the lease was up, they never left

Termination of Tenancies at Will or by sufferance, by notice

A tenancy at will or by sufferance may be terminated by written notice of not less than 30 days given. Notice myst be served by delivery, or to a suitable person of age and discretion. If no such person exists, notice must be affixed upon a noticeable place on the premises where it may be conveniently read. At the expiration of 30 days after notice, the Landlord may re-enter or remove the tenant.

Tenancy at will (definition)

A tenancy with no fixed period that endures so long as both the landlord and tenant desire. If the lease provides that it can be terminated by one party, it is at the will of the other party as well.

Self Help (berg v Wiley) rule and main points

All self-help is wrong as a matter of law if the tenant has not abandoned, then the judicial process must be used. "The only lawful means to dispossess a tenant who has not abandoned nor voluntarily surrendered, but who claims possession adversely to a landlord's claim of breach of a written lease is by resort to judicial process"

Common Law Rule of Convenance

Convenance is independent, meaning that just because the landlord doesn't do something, that does not allow you not to pay rent. However, you can create a contract provision that changes the default rule. (unfixed conditions do not excuse a tenant from paying rent)

Silent on sublease consent (row v. A&P rule)

Courts will only find an implied covenant when it does not violate any special laws or bad faith. In other words, would the landlord have agreed to the original lease, if he knew the tenant would assign it.

Duty to mitigate if tenant abandons cases?

Does the landlord have the duty to mitigate if that landlord abandons? 1. Sommer v. Kridel: Yes, duty to mitigate 2. Kenneth Cole: No, duty to mitigate (NY)

Kendall v. Pestana (issue)

Does the landlord have to be reasonable in consenting to assign or sublease if it is in the lease? Adopts the modern rule and states that only wen there is no standard for reasonable.

Tenancy at Will (Common Law)

Either party has the right to terminate the lease with no prior notice needed - A tenancy at will is terminated when one of the parties terminates it or at the death of one of the parties.

Actual evidence

Eviction by the Landlord: Landlord wrongfully evicts and/or forces the tenant off premises 3rd party having paramount title (legal right) dispossesses the Tenant

Common Law Rule: Ending a Periodic Tenancy

For any periodic tenancy of less than a year, notice should be given equal to the length of the period, but not exceeding 6 months. The notice will terminate the tenancy on the final day of the period, not in the middle of the tenancy.

NY statute (duty to mitigate residential)

For residential properties, if a tenant vacates a premises in violation of the terms of the lease, the landlord shall, in good faith and according to the landlord's resources and abilities, take reasonable and customary actions to rent the property at fair market price or at the rate agreed to during the term of the tenancy, whichever is lower. The burden of proof shall be on the party seeking to recover damages. Any provision in a lease that exempts a landlords duty to mitigate damages under this section shall be void as contrary to public policy.

Reste v. Cooper

How did the court respond to the Landlord's argument related to the Waiver? Rule: If regular and serious enough to substantially interfere with use and enjoyment for purpose of lease (in effect, defining "constructive eviction")

Sublease v Assignment: Traditional Rule

If it transfers the whole term, then it is an assignment. If it doesn't transfer everything, even if it is just less than a day, then it is considered a sublease.

Dumpor Rule

If the landlord consents to one assignment, they are implicitly deemed to consent to any other assignment. The only way to prevent this is to put in an express statement prohibiting it.

Sublease v Assignment: Modern Rule

If the parties intended the instrument to be an assignment, it should be considered an assignment. If the parties intended for the instrument to be a sublease, it should be considered a sublease. The intent can be derived from the language of the instrument.

When Tenant may Surrender Premises

If the tenant has to quit and surrender possession (because the property is untenable) of the leasehold premises... he or she is not liable to pay to the lessor or owner, rent for the time subsequent to surrender.

Rowe v. A&P (issue)

If the the lease is silent on consent about assigning and subleasing should one be implied?

Sublease

Landlord cannot sue the subtenant because the subtenant has no legal relationship with the landlord. The reversionary interest is with the primary tenant through privity of estate and privity of contract.

NY statute (duty to mitigate commercial)

Landlord has no duty to mitigate the damages

License v Lease

License - a type of contract; terminable Lease - A conveyance of a present possessory interest

How to find intent for sublease v. assignment

Look at the actions of the parties or from the language in the instrument.

Reasonability to release (traditional rule)

May refuse consent even if unreasonable

Privity of Contract v. Privity of Estate

Privity of Contract - Lease as a Contract Privity of Estate - Lease as conveyance

Tenancy at Will (Modern Statutes)

Require a period of notice of at least 30 days or a time equal to the interval between payments in order for one party of the other to terminate a tenancy at will.

Sel-Help v. Duty to mitigate

Self-Help cases - if the tenant is in possession of the property and defaults, can the landlord take self-help and retake possession (common law permits self-help) Duty to mitigate -whether or not the landlord has to mitigate when the tenant is not in possession. The landlord can't mitigate if the the tenant is still in possession.

Assignment v. Sublease

Sublease - less then whole lease Assignment - the rest of the lease, which severs privity of estate

Delivery of Possession (Hannan v. Dusch)

Term of years lease, which will expire at the end of 15 years. When the term ended the tenant stayed and the tenant became a holdover tenant. There was no express covenant for the delivery of possession. Legal Question: In the absence of an express covenant is there an implied duty? Without the expressed covenant is the landlord required to to evict or take some action to get rid of the trespasser, so as to have it open for the new tenant at the beginning. of the term?

Death of Landlord

The death of a landlord or tenant has no effect on the duration of a term of years or periodic tenancy, but does on tenancy at will.

General common law on silent lease

The general rule is that the common law favors free transferability when the lease is silent. Subleases and assignments are permitted unless expressly prohibited by the lease because of general common law favoring free transfer.

Delivery of Possession: New York Statute

The landlord has an implied duty to deliver both, legal and actual possession

Delivery of Possession: The English Rule

The landlord has an implied duty to deliver both, legal and actual possession

Delivery of Possession: The American Rule

The landlord has an implied duty to deliver only legal possession

Self-Help (common law)

The landlord may use self-help to retake the premises from a Tenant-in-Possession (without incurring liability for a wrongful eviction) so long as two conditions are met: 1. The landlord must be legally entitled to possession because there is either a holdover tenant or a breach of lease and the lease contains a re-entry clause. AND 2. Re-entry must be peaceable. Therefore, the tenant may recover damaged for wrongful eviction if either: 1. the landlord is not entitled to possession OR 2. it is not peacable

Reasonability to release (modern rule)

The landlord must be commercially reasonable where no provision exists in a lease. The contract may contain a provision allowing the landlord to be unreasonable. Restatement: The landlord cannot unreasonably withhold consent, unless a freely negotiated provision gives the landlord the right.

Holy Properties v. Kenneth Cole (rule)

The law imposes upon a party subjected to injury from breach of contract, the duty of making reasonable exertions to minimize the injury. Leases are not subject to this general rule, however, for unlike executory contract, leases have been historically recognized as present transfer of an estate in real property. Once the lease is executed, the lessee's obligation to pay rent is fixed according to its terms and a landlord is under no obligation or duty to the tenant to relet, or attempt to relet abandoned premises in order to minimize damages.

Ending Term of Years lease

The tenant has the right to move out without any notice.

End of surety ship

There is only suretyship if the original tenant is the one being sued because if the original tenant is release, the landlord cannot sue.

Hannan Application

To determine if the defendant has possession at the beginning of the lease term.

Delivery of Possession: Safeguards

You can protect yourself in a jurisdiction that follows the US rule by having an express provision or a contract stating that they will not pay rent until they have legal and actual possession. The tenants remedy absent an express provision - the T2 must sue the holdover - T2 cannot sue the landlord

Ernst v. Conditt (main takeaway)

how to identify if it a sublease or an assignment

Primary obligor

the one who ought to pay (person in possession)

Creditor

the right to receive the money (landlord)

Release

when a party announces the other party does not have to perform as promised