Property Ch. 7

Laurie leases an apartment to Toby for a term of two years; Toby agrees to pay $1,000 each month in rent. Six months later, Toby's employer transfers him to a new state, so Toby vacates the apartment, stops paying rent, and notifies Laurie that he has left. For six months, Laurie does nothing to find a new tenant for Toby's unit. Laurie then advertises the unit for rent in the local paper and also retains a real estate broker to find a tenant. Pablo immediately offers to rent the unit for $800 per month; Laurie refuses this offer because she is reasonably confident that Randy, another prospective tenant, will agree to pay $1,000 per month. But Randy is killed in an automobile accident. Laurie never finds a replacement tenant. How much rent is Toby liable for?

$12,000.

Albert owned a shopping center, which consisted of one large store occupied by a supermarket, six retail store spaces, and a parking lot. He leased one of the store spaces to Bob for a 20-year term, pursuant to a written lease which provided, in part: "The leased premises may be used only as a shoe store." Bob began to operate a shoe store, which was successful. Four years later, Bob transferred his interest in the property "to Cindy for a term of ten years." Three days later, Cindy transferred all of her interest in the property "to Dave for a term of five years." Dave then converted the space into a gourmet food store, which sold imported cheese, meats, wine, and other items. The supermarket tenant complained to Albert that Dave's store would interfere with its business, and threatened to leave the center when its lease ended. Under these circumstances, who is liable to Albert in damages for violation of the lease restriction?

Bob

Laura owned a retail store. She leased it to Tana for a 10-year term in return for $2,000 per month in rent. Three years later, Tana entered into an agreement with Susan, by which Tana "transferred all of my interest in the premises to Susan for five years" in return for $3,000 per month in rent. One week later, Susan entered into an agreement with Wesley, by which Susan "transferred all of my interest in the premises to Wesley" in return for $4,000 per month in rent. The next month no one paid rent to Tana. Under the majority approach, who is liable to Tana for rent?

Both Susan and Wesley

Bob owned a private campground. He leased the property to Cara for a term of 20-years. One year later, Cara transferred all of her interest in the property to Dave. Dave operated the campground briefly, and then transferred all of his interest in the property to Ella. Ella then transferred all of her interest in the property to Frank, who continued operating the campground. Last month no one paid rent to Bob. Under the majority approach, who is liable to Bob for rent?

Cara and Frank

Aishath owns a two-story home. The home contains two separate living areas, one on the ground floor and one upstairs. Aishath is a sprightly ninety-year-old woman who immigrated from the Maldives two decades ago. Aishath is in need of additional income and therefore is looking to rent the upstairs apartment. In which of these situations has the federal Fair Housing Act likely not been violated?

Driving by Aishath's house, Mary sees a for-rent sign and stops to inquire. Mary is a young attorney of Indian descent and is wearing a sari. When Aishath opens the door and sees Mary, Aishath exclaims, "I don't rent to Indians, Hindus, young women, or attorneys. Please leave!"

Louise leases a retail store space to Zed for a term of 10 years. Zed uses the premises as an art gallery, selling paintings that he has created over the years. Five years into the lease, Zed fires his employees and hangs a sign on the gallery door that says "Closed for Painting," but continues paying rent thereafter. Two months later, while peering through a window, Louise sees that the gallery is empty aside from two chairs, a cash register, and five paintings stacked against the wall. The same day Louise receives the following email from Zed: "Gone to France. Sorry for the mess. It's all my fault. Best wishes, Zed." One week later, Louise breaks down the gallery door with an ax, enters the gallery, changes the locks, and removes everything Zed had left there. The next day, Zed returns from France with 30 new paintings that he has created, and demands that Louise let him into the gallery. Which of the following is correct?

If the jurisdiction allows self-help eviction, Louise acted improperly because she did not have the right to possession of the premises.

Lou owned a 25-unit apartment building in a large city. Hoping to find a tenant for Apartment 14, Lou placed this ad on Craigslist: "1 bedroom, great location, perfect for bachelor. $1,200. 890-2286." Jill, an Asian woman, inspected the unit in response to the ad and asked if she could rent it. Jill mentioned that she earned a high income because she was a physician. Lou replied: "I'll think about it." When Jill called Lou two days later to inquire, Lou told her: "I won't rent to you. You doctors are too arrogant. You never listen to other people. You'd just cause trouble in the building." One month later, Lou rented the unit to a writer. Which of the following is correct?

Jill has a prima facie case for discrimination under the Fair Housing Act

LLL, a conservative religious organization, leases space in its building to Terri for a term of five years. The lease provides: "Terri may not assign or sublease without LLL's consent, which shall not be unreasonably withheld." Terri now wishes to assign the lease to GLC, an organization that will use it as a community center for gay and lesbian couples. Under these circumstances:

LLL cannot refuse consent because there is no commercially reasonable objection.

LX Investments, Inc. ("LX") owned an older two-story building in a small town. The bottom floor was used as a small grocery store, while the upper floor was an apartment. LX leased the building to Theo for a term of five years pursuant to a written lease which required Theo to pay $5,000 per month in rent. Theo moved into the apartment and started operating the store. Six months later, while having breakfast in the apartment, Theo noticed an unusual electrical smell coming from his apartment wall; when he touched the wall, it was hot. He called an electrician who discovered that old frayed electric wiring inside the wall was smoldering and about to burst into flames. The electrician replaced the smoldering wires, but warned that the rest of the wiring in the building was old and frayed, and in such poor condition that it was likely to cause a fire in the near future. Theo sent a note to LX which read: "LX: There was an emergency with the wiring in the building which almost caused a fire. The wiring is in such bad shape that it needs to be replaced now. Best, Theo." Theo waited for a month, but LX never fixed the wiring or responded to his note. Which of the following is most likely?

LX breached the implied warranty of habitability by not fixing the wiring problem.

Larry owned a 50-unit apartment building in a hot southwestern state. Unlike almost all other apartments in the area, the units in Larry's building did not have air conditioning. Tony leased Apartment 47 in Larry's building for a one-year term beginning on January 1. While inspecting the unit before signing the lease, Tony noticed that it had no air conditioning and asked whether Larry planned to install it. Larry replied: "No, that's why my rents are cheaper than the competition." In June, outside temperatures peaked at 110 degrees for two weeks, and the temperature inside Tony's unit reached 115 degrees. When Tony complained about the heat, Larry said: "I'll let you end the lease if you want. But air conditioning is too expensive." In July, after a week of scorching heat, the temperature in Tony's unit hit 118 degrees for several days. During that period, elderly tenants in five of Larry's units suffered heat stroke and were taken to the hospital. Tony then refused to pay rent until Larry addressed the heat problem. Which of the following is most likely?

Larry breached the implied warranty of habitability

Lee leases a house to Toni for a term of five years. Four months later, Toni stops paying rent and refuses to move out. In order to convince Toni to either pay the rent she owes or to vacate the premises, Lee cuts off the water to the house; Toni remains in possession. Which of the following is correct?

Lee is liable for self-help eviction

Thad leases a condominium unit from Lena pursuant to a written lease which creates a month-to-month periodic tenancy. The lease provides, among other things, that "Thad is responsible for any and all needed repairs to the premises." When Lena's friend Barry, enraged that his favorite football team lost the championship, angrily throws a football toward Thad's unit, it shatters one of the windows. Thad complains to the police about Barry's conduct. When Thad asks Lena to fix the window, Lena refuses. Which of the following is correct?

Lena is obligated to repair the window

Leonard and Tina orally agreed that Tina would lease Leonard's house on a month-to-month basis for $600 per month in rent. Two months after moving in, Tina noticed a few ants in the kitchen, which she ignored. A few weeks later, she discovered about 10 ants in the same place, which she stepped on and killed. Three months later, she encountered about 20 ants in the kitchen. When she complained to Leonard he offered her a can of ant spray to use in case the problem continued. Tina refused the spray, saying: "I can't use an insecticide in my home because my daughter has asthma." After that, Tina took special care to ensure that nothing in the kitchen would attract ants; she swept the floor each day, and emptied the trash basket frequently. One morning six months later, she found 15 more ants in the kitchen. She then sent Leonard an email which read: "Leonard: Sorry, but I won't pay any more rent until you fix the ant problem. Tina." Which of the following is most likely?

Leonard did not breach the implied warranty because the house was habitable

Lilly owned a condominium unit which she leased to Tony for two years, beginning on July 1. As the end of the lease approached, Tony announced that he had no interest in renewing the lease. Lilly then posted an on-line ad seeking a new tenant. Frank answered the ad, inspected the unit, and orally agreed to rent the unit for $1,000 per month, beginning on July 1. Frank then told Lilly: "I intend to live in the unit for three years." Two days later, Sarah saw the ad, called Lilly, and offered to pay $1,200 per month for the unit. Because Lilly believed that her oral agreement with Frank was unenforceable, as she told Sarah, she leased the unit to Sarah for a three-year term beginning on July 1, pursuant to a written lease. Tony vacated the unit on June 30. Frank and Sarah both appeared at the unit on July 1, ready to move in. Which of the following is correct?

Lilly is liable to Sarah for damages under either the American rule or the English rule

Lana owned a large warehouse, which she leased to Tim for five years beginning on January 1. One month before the expiration of Tim's lease, Lana entered into a lease with Ned, whereby Ned leased the premises for a three-year term beginning on January 1. When Ned arrived at the warehouse on January 1, however, he discovered that Tim was still occupying the premises, even though Tim had no legal right to do so. Which of the following is correct?

Ned may evict Tim if the jurisdiction follows the American rule

Al owned Bookacre, which consisted of a freestanding store building and its surrounding parking area. In January, Al leased Bookacre to Cara for a 10-year term pursuant to a written lease. The lease was silent about who would pay for repairs to the building. Cara moved her stock of books into the building and opened a used bookstore. During a strong rainstorm in November, the building roof began to leak, first through slow drips in three places and then small trickles in 12 spots. Cara was able to catch most of the water in buckets, but the leakage ruined 53 books. Cara consulted a contractor who reported that the roof was so old that the leakage would continue getting worse with each new storm until the roof collapsed by March or April of the next year. Cara then sent this email to Al: "Al: The roof is leaking badly, and it will only get worse unless you fix it now! Regards, Cara." Al failed to respond. Has Cara been constructively evicted?

No, because Al is not obligated to repair the roof

Lisa owned a single-family home. She entered into a written agreement by which she leased the home to Tanya "on a month-to-month basis" for $800 per month in rent, due on the first day of the month. Tanya later assigned the lease to her friend Alice. A few months later, Alice noticed that the water heater in the home was failing to produce sufficient hot water. But when Alice mentioned this to Lisa, Lisa became upset and shouted: "Alice, this isn't the Ritz Hotel! Everything can't be perfect." A week later, Lisa served Alice with a notice which purported to terminate Alice's tenancy in 30 days. Is Lisa entitled to evict Alice?

No, because Lisa cannot evict Alice due to her complaint.

Nina owned a small shopping center which consisted of 15 retail store spaces and a parking area. Most of the spaces were rented to tenants whose stores sold goods for children. Oliver approached Nina about renting one of her vacant spaces to operate a bookstore. Reasoning that the bookstore would complement the other stores in the center, Nina entered into a written lease with Oliver for a 10-year term. The lease provided, in part: "The premises will be used as a bookstore." Three years into the lease term, Oliver told Nina that he intended to assign his lease to Paul, who planned to open a pornographic bookstore there. There is no provision in the Nina-Oliver lease that deals with lease transfers. Can Nina block the transfer of the lease to Paul?

No, because Oliver is entitled to assign his interest.

Perry owned a small shopping center, which consisted of 10 retail stores and an adjacent parking lot. He leased one of the store spaces to Dan for a five-year term pursuant to a written lease. Dan then opened "Dan's Donuts," where he sold doughnuts, pastries, snacks, and coffee. The business was a success; within a year, it produced $10,000 per month in total revenue, giving Dan a profit of $6,000 per month. Perry then leased another space in the center to Dunkin' Donuts, a national doughnut chain. Once the Dunkin' Donuts store opened, the total revenue from Dan's business fell to $5,000 per month, only slightly more than his expenses. Dan would like to terminate his lease and move to a new location. If Dan gives proper notice and vacates the premises, can he avoid liability for future rent on the basis that he was constructively evicted?

No, because Perry was entitled to lease to Dunkin' Donuts

Terry owned a 20-unit apartment building with a central heating system. He leased Unit 8 to Vince on a month-to-month basis in return for $500 per month in rent. Terry owned a 1965 Ford Mustang, which he loved dearly. One winter day Vince saw Terry driving his Mustang and shouted: "That's a terrible car! You should be ashamed of driving it." Angry at this insult to his prized car, Terry decided to terminate Vince's tenancy. Accordingly, he cut off the heat to Vince's apartment so that Vince would abandon the premises. The temperature in Vince's apartment dropped to 30 degrees that night, and the next day Vince complained to Terry about the lack of heat. After enduring three more days and nights of freezing temperatures, Vince abandoned his apartment. Was Terry's conduct appropriate?

No, because Terry's action was self-help eviction.

Oscar owned a luxury home in an upscale neighborhood. It had five bedrooms, four bathrooms, a gourmet kitchen, a huge living room, a private theater, a large library, and other amenities. The home also featured a spectacular ocean view. Oscar rented the home to Victor and Verna, a couple with one child, for a term of two years; the written lease required the payment of $8,000 per month in rent. Six months after Victor and Verna moved in, another property owner built a new house which entirely blocked the ocean view from their rented home; they protested to Oscar, who ignored their concerns. Two months later, the toilet in one of the bathrooms became inoperable; Victor and Verna again protested to Oscar, who promised to fix the problem but never did. Which of the following is most likely?

Oscar did not breach the implied warranty of habitability because the home is habitable.

Oscar owned a shopping mall. It included four large retail spaces which were leased to major national chains, 120 small retail spaces leased to local stores, a food court, and a large parking area. He leased one of the retail spaces to Julia, a jeweler, for a term of ten years in return for $2,000 per month in rent. Julia opened a jewelry shop in her space. But after two years of intense effort, she concluded that a jewelry store could not succeed in that location. In order to minimize her liability for future rent, Julia decided to try to assign her lease to a replacement tenant. The provision of her lease concerning transfers read as follows: "31. Transfers. Tenant may not assign, sublease, or transfer any interest in this Lease or in the Premises unless Lessor gives written consent." Julia then entered into an agreement to assign her lease to Gus. Gus planned to operate a store where guns could be bought, sold, and repaired; he also planned to install a small shooting range in the rear of the store so that a customer could try out a gun before buying it. Julia asked Oscar for permission to transfer the lease to Gus. In response, Oscar sent this letter: "Dear Julia: I refuse permission for the transfer. A gun store would not be an appropriate tenant in my mall. And, as a general matter, there are already too many guns in circulation in my view. Sincerely, Oscar." Julia and Gus then sued Oscar, seeking a declaratory judgment that he was obligated to consent to the assignment. Assuming that the jurisdiction uses the Kendall v. Ernest Pestana, Inc. standard, how will the court rule?

Oscar may refuse consent because the shooting range will make noise.

Terry leased a home from Laura pursuant to a written lease which provided that "the term of this Lease will begin on January 1 and continue for two years." The lease further provided that Terry would pay $850 in rent on the first day of each month. Terry immediately began occupying the home. Neither Laura nor Terry ever gave notice of termination. On January 2 two years later, Terry continued to occupy the home. Laura then sent Terry an email which read: "Terry: Get out of my house! You have no right to be there. Laura." Terry then mailed Laura a check for $850, which Laura cashed; the same thing happened in the next month. What estate does Terry have?

Periodic tenancy

Louis owns a 10-unit apartment building. Last week he entered into a written lease with Tina, a new tenant, which provided that she would lease Apartment 8 in his building "for $12,000 per year, payable at $1,000 per month." There is no other provision in the lease specifying when its term will end. What estate does Tina have?

Periodic tenancy (year-to-year).

Tara enters into an oral agreement to lease Leslie's house "on a year to year basis." But when Tara arrives to move into the house on the first day of the lease term, she discovers that the house is still occupied by Pierre, the prior tenant, who has remained in possession even though his lease term has expired. Which of the following is correct?

Pierre is a tenant at sufferance

Greta owned a four unit apartment complex near a college campus. Greta rented one of the units to Simone, a student at the college, for a one year period. Both signed a written lease that provided, in pertinent part, that Simone would pay Greta $500 each month on the first of each month. After three months, Simone decided to transfer to another school and conveyed all the remainder of her lease term to Isla. Isla agreed to assume all the covenants of the Greta-Simone lease. Two months later at the end of the fall semester, Isla learned that she was academically disqualified and had to leave school. Isla assigned all the remainder of her lease term to Ben. Unfortunately, a few days later, Ben had to leave school for personal reasons. Although seven months remained on the leasehold, Ben was only able to find a student (Ximena) to rent the apartment until the end of the spring semester (a four month period). After Ben left and Ximena moved in, no one has paid rent to Greta. Which of the following is correct?

Simone is liable to Greta for the rent under privity of contract.

Lenora owned a mountain cabin that she wanted to rent. Toby answered her "For Rent" ad on Craigslist. He explained that his doctor had told him that he had only two years to live, and he wanted to spend the rest of his days in the same home. Lenora then entered into a written lease with Toby, which provided in part: "Lenora hereby leases the Property to Toby for so long as Toby lives, in return for $900 per month in rent." What estate does Toby have?

Tenancy at will

Lana leases Redacre to Tully "for as long as Tully lives or until Lana dies, whichever occurs first." What estate does Tully have?

Tenancy at will.

Luis owned a residential condominium unit near a medical school. Tanya, a new medical student, inspected the unit and decided to rent it. Luis and Tanya entered into a written lease which provided, among other things: "Luis hereby leases the said property to Tanya for five years, but this lease will end if she graduates from medical school before that time." The lease obligates Tanya to pay $700 in per month in rent. What estate does Tanya have?

Term of years subject to a condition subsequent.

Rudy owned a five-unit apartment building in a small town. On January 1, he leased Apartment B to Alex for a two-year term in return for $800 per month in rent, due on the first day of each month. Alex regularly paid rent for the first year of the term. On December 31, however, he got quite drunk early in the evening and became angry at Rudy without any cause. That evening, he had a moving company take all his belongings from the apartment to a nearby hotel and sent an email to Rudy which read: "Rudy: Sorry, but I can't live in your building any more. Alex." Alex failed to pay the rent due the next day, January 1. On the same day, Rudy's friend Flora learned that the apartment was now vacant. Because the fair rental value of the apartment had risen to $900 per month, she offered to rent it for a year at that rate. A few minutes later, Alex, now sober, called Rudy and asked: "Can I rent my apartment again like I did before?" What is Rudy's best option?

Terminate Alex's lease.

Tim owned a small commercial building. On January 1, he leased the building to Abby for a one-year term pursuant to a written lease in return for $2,000 per month in rent; Abby planned to use the building as an art gallery. The lease provided, in part: "The Property may only be used as an art gallery." Abby opened an art gallery in the building, but after a few months it was still unsuccessful. To increase revenue, Abby opened a café in the building in May; the café sold espresso, tea, and gourmet snacks. The café occupied the middle of the building, while its walls continued to exhibit the same amount of art as in the past. Abby duly paid the rent due on June 1. But early in the morning on June 2, Tim entered the building in Abby's absence, changed the locks, and placed the contents of the gallery/café in a storage unit. Which of the following is most likely?

Tim's conduct was not appropriate, and Abby can recover damages from him

Linda owned a commercial building which she had leased out to various businesses over the years, but was now vacant. Tully, who hoped to open a bookstore, contacted Linda about leasing the building. After inspecting the building, Tully told Linda that he would rent it for 24 months for $1,000 per month; Linda agreed. Later that day, Linda sent Tully an email which read: "Dear Tully: Confirming our conversation, you have agreed to rent my building at 101 Main Street, Centerville, for 24 months starting tomorrow, for $1,000 per month. Best, Linda." Tully moved into the building and opened his bookstore. But it was not a success. Tully paid the rent for each month for three months, but then handed Linda a note which read: "Linda: I hereby terminate my month-to-month tenancy. Tully." Tully then vacated the building and paid no further rent. Linda exerted reasonable efforts to find a replacement tenant, without success, and eventually sued Tully for $21,000 in lost rent ($1,000 per month for 21 months). What is the most likely outcome?

Tully is not liable for any rent because the lease does not comply with the Statute of Frauds.

Lois owned a five-unit apartment building in a large city. She leased Unit B to Tyler for a three-year term pursuant to a written lease that complied with the Statute of Frauds; the lease term was to begin on September 1. The lease provided, among other things: "Tenant shall be fully responsible to pay for all repairs and improvements to Unit B which may be necessary or appropriate." Six days after Tyler moved in, heavy rains and strong winds caused the city airport to change its approach patterns for incoming airplanes. As a result, jets flew over Tyler's unit at an altitude of 100 feet for five days; on average, a jet flew by every three minutes. The noise was so loud and so frequent that Tyler could not sleep. He demanded that Lois fix the problem, but she did nothing. Similar storm patterns caused the same problem for many days in October, November, and December. On January 1, Tyler handed Lois a letter which read: "Lois: I will not pay any more rent until the airplane noise problem is resolved. Tyler." Thereafter Tyler failed to pay rent. Lois then sued to evict Tyler for nonpayment, and Tyler asserted the defense that Lois breached the implied warranty of habitability. Who will win the lawsuit?

Tyler, because Lois breached the implied warranty

Larry leases to Tim for a term of 10 years at a monthly rent of $2,000. Two years later, Tim transfers "all my interest in this lease" to Ulla; three years later, Ulla "subleases and assigns" to Vern for a period of two years. No one is paying rent to Larry. Who is liable to Larry for rent?

Ulla, under privity of estate

Dell owned a house, which he rented to Toby for a five-year term pursuant to a written lease which called for $1,000 per month in rent. Three months later, Toby's employer transferred him to a job in another state, so Toby transferred all of his interest in the house to Velma. After living in the house for almost two years, Velma had the opportunity to work in Paris on a special one-year assignment. She accordingly transferred "all of my interest in the property to Will for twelve months" in return for $800 per month in rent. After Will moved into the house, he discovered that it was infested with thousands of cockroaches. Who is responsible for fixing the cockroach problem?

Velma

Omar owned a residential duplex; both of his units, Unit A and Unit B, were vacant. He leased Unit A to Henry for a one-year term pursuant to a written lease which required Henry to pay $800 per month in rent. Six months later, when Henry abandoned Unit A without cause, Omar elected to continue the lease in effect and seek to mitigate his damages. Unit B was still vacant at this time. Omar retained a rental agency to locate tenants for both units; over the next four months, the agency sent three potential tenants to inspect the units. Rita inspected both units and decided to rent Unit B. Sam offered to rent Unit A for $700, which Omar refused. Tony offered to rent Unit A for $800 per month, but was unable to post the $1,500 security deposit which Omar always required from tenants. Unit A remained vacant from the time of Henry's abandonment until the end of his lease term. Did Omar adequately mitigate his damages?

Yes, because his efforts were reasonable.

Oliver owned a two-story office building with a central heating system. On July 1, he leased part of the second floor to Freda, an architect, for a 10-year term pursuant to a written lease. The lease provided, in part: "Landlord will provide heat to the leased premises." During cool days in October, Freda discovered that the heating system would only heat her office to 55 degrees before automatically shutting off, regardless of how high she or her employees set the office thermostat. When Freda complained to Oliver that her office needed to be heated to at least 68 degrees, Oliver responded: "The lease says I have to supply heat, which I'm doing. It doesn't say how much. We all need to conserve energy now." As a result, Freda and her employees had to wear heavy sweaters, ski hats, long underwear, and other winter clothing while working inside the office. Even so, their fingers were cold, which made it much more difficult to prepare architectural plans and drawings. Some of Freda's long-time customers refused to come to her office because it was so cold. After Oliver ignored more complaints, Freda vacated the premises on January 1. Oliver subsequently sued Freda for rent, and she asserted the defense of constructive eviction. Has Freda been constructively evicted?

Yes, because the constructive eviction elements are satisfied.

Company leases a large warehouse from Lisa for a 20-year term to store large quantities of flowers until they can be delivered to retail florists. The written lease between Company and Lisa says nothing about the condition of the premises. The warehouse is located in an industrial park owned by Lisa, and Lisa leases other buildings to other tenants. After taking possession of the warehouse and filling it with flowers, Company discovers that one of Lisa's other tenants operates a toxic waste facility in the industrial park which emits large amounts of noxious smoke for three hours every Friday afternoon. The smoke penetrates small cracks in the Company warehouse, which injures 10% of the flowers, making them more difficult to sell. Can Company establish constructive eviction?

Yes, but it may have to vacate the premises