Chapter 6 - Leasehold: The Law of Landlord and Tenant

landlord's duty: implied warranty of habitability

(only residential leases): standard is that premises must be fit for basic human habitation; bare living requirements must be met, so intrinsic it is non-waivable as repugnant to public policy. - minor violations standing alone and not affecting the health or safety of the tenant will not be considered a breach of warranty - landlord will not be liable for defects caused by the tenant - to determine whether the warranty has been breached, courts inquire into whether the claimed defect has an impact on the safety or health of the tenant - if landlord was unaware of the condition, tenant must tell him and he must have a reasonable amount of time to repair

the periodic tenancy

- Expressly created. - Written (satisfies statute of frauds). - Customary, no specific period of time stated for lease. - Renews automatically unless there is 1 period notice that the lease will end. (only 6 month notice if from year to year) - Terminates if both parties agree, if premises destroyed, and if eminent domain. - Might not terminate on death.

delivery of possession

1. "English rule" majority requires that L put T in actual physical possession of the premises, thus if there is a holdover in possession, L will be accountable in damages to the new tenant 2. "American rule" states landlord has no duty to deliver actual possession at the commencement of the term, and hence is not in default under the lease when the previous tenant continues wrongfully to occupy the premises

Types of leaseholds

1. the terms of years 2. the periodic tenancy 3. the tenancy at will 4. the tenancy at sufferance: holdovers

terms of years

Expressly created. Written (satisfies statute of frauds). Extends for some specific period of time. Terminates automatically at the end of that period. Terminates if both parties agree, if premises destroyed, and if eminent domain. does not terminate on death. - can be made terminable on some event

Selection of tenants

Federal and state statutes now prohibit discrimination in the sale or rental of property on various grounds - including race, religion, or national origin. These ordinarily apply to both sale and rental of property.

landlord's duty: constructive eviction

Landlord does something or fails to do something that substantially interferes with a tenant's reasonable use of the premises, making it unsuitable for the tenant's use. Must abandon the premises within a reasonable period of time. Problems for tenants Reasonableness standard makes it unclear if the landlord has actually breached. High transaction costs to use courts to resolve these issues, most will not resort to courts. Risk if tenant decides to breach and rent somewhere else that tenant might have to pay 2 rents if tenant loses quiet enjoyment case.

landlord rights

Tenant owes 3 duties to landlord. 1. Duty to fulfill the express obligations in the lease (pay rent). 2. Implied duties not to commit waste or maintain a nuisance. 3. Duty to vacate at the end of the lease term.

Assignment

Unless the lease prohibits it, a tenant or landlord may freely transfer his interest in the premises 1. if T1 transfers ENTIRE remaining term of leashold, he has made an assignment, and L2 comes into privity of state with the L. i. L and T2 are in privity of estate meaning that L and T2 are responsible to each other for all promises in the original lease that run with the land ii. L and T2 are not in privity of contract unless you have been told that T2 expressly assumed the performance of all promises under the original lease iii. L and T1 are no longer in privity of estate however they remain in privity of contract so T1 is secondarily liable to L for damages done by T2 to the property (first action is against T2 for privity of estate)

tenant's duties: T breaches duty to pay rent but is out of possession of premises; landlord can:

a. Surrender; L could choose to treat T's abandonment as a implicit offer of surrender which L accepts; T gives up the leasehold b. Ignore the abandonment and hold T responsible for rent just as if T were still there; only available in minority of states c. Re-let the premises; hold T liable for any deficiency; majority of courts think L must at least try to re-let (mitigation)

landlord's duty: implied warranty of habitability - recourse for violation

a. Terminate lease and recover damages - tenant vacates the premises and recovers damages b. Continue lease and recover damages - tenant remains in possession and recovers damages. (1) the difference between the agreed rent and the fair market value of the premises as they are, or (2) the difference between the fair market value of the premises if they had been as warranted and the fair market value of the premises as is c. Continue lease and use rent to repair - tenant remains in possession and may use a reasonable amount of rent to repair the defective conditions d. Continue lease and withhold rent - tenant remains in possession and, after notice to the landlord, places his rent in escrow until the default is eliminated e. Use as defense against landlord's action for rent - tenant may use the landlord's breach as a defense in an action by the landlord for rent

tenant's duties: T in breach to pay rent and still in possession of premises; landlord can:

a. evict and sue for rent owed b. continue the relationship with the tenant and sue for the rent owed c. CANNOT engaged in self-help (change locks or forcibly remove T or T's possessions)—punishable civilly and criminally

landlord's duty: covenant of quiet enjoyment

i. A tenant has a right to quiet enjoyment of the premises, without interference by the landlord. If this is not expressly stated in the lease, it is always implied. ii. It has always been implied that the tenant's covenant to pay rent was always dependent on the landlord's performance of the covenant of quiet enjoyment. Thus, if the landlord breached this covenant by evicting the tenant, the tenant's obligation to pay rent ceased. iii. Breach - the covenant of quiet enjoyment can be breached by either actual or constructive eviction

Tenancy at sufferance

i. Created when T has wrongfully held over past the expiration of the lease (holdover); gives this holdover a property interest in order to permit landlord to recover rent ii. A landlord can choose to (1) evict (action in ejectment); (2) treat as trespassor (action in trespass); or (3) hold him as tenant. If a landlord elects to treat the tenant as a trespasser but fails to pursue the remedy of eviction and accepts checks for rent due, it creates an extension of the lease on a month-to-month basis (periodic tenancy)

landlord's duties: actual eviction

i. If a tenant is physically evicted from the entire leased premises - either by the landlord or by someone with paramount title - the tenant's rental obligation ceases. The tenant may now treat the lease as terminated, and his liability for further rent under the lease is discharged. He may also collect damages from the landlord for breach of covenant ii. Partial eviction - if tenant is evicted from any portion of the lease premises by the landlord, his rent obligation abates entirely until possession thereof is restored to him. The tenant may stay in possession and refuse to pay rent iii. Example: L leases T a farm of 40 acres. Subsequently L takes possession of an unused barn on the 40 Acres and stores corn in it. T may stay in possession and refuse to pay any rent until L gives up the barn. v. If the landlord partially evicts the tenant, tenant may stay in possession and pay no rent. But if third party partially evicts the tenant, tenant does not have the option of staying in possession and paying no rent

landlord's remedies: abandonment by tenants

i. If tenant has no right to vacate property, but abandons it, landlord has several options: (1) terminate lease; (2) let premises lie idle and sue the tenant for rent as it comes due; (3) retake possession and attempt to relet premises ii. Landlord terminates lease - effects a surrender. T is liable only for rent accrued and for damages caused by abandonment iii. Landlord stands by and does nothing - landlord can leave premises vacant and sue tenant for rent as it comes due under lease. Modern trend is that landlord has a duty to mitigate damages. iv. Landlord repossesses and relets - landlord may reenter and repossess the property for purpose of renting it out to another tenant

tenant's duties: waste

i. If tenant substantially damages premises by an affirmative act, tenant is liable to the landlord. Sometimes known as voluntary or affirmative waste.

tenant's duties: duty to repair

i. In absence of a duty on the part of the landlord to repair, the tenant has a duty to make ordinary repairs to keep the property in the same condition as at commencement of the term, ordinary wear and tear excepted. T doesn't have to make substantial repairs but must protect premises from damage usually by the elements ii. If tenant has duty of repair, tenant is liable to persons injured as a result of failure to repair iii. There must be a covenant in the contract stating that the tenant has a duty to repair for substantial repairs. If the repairs are ordered by government though,, courts will interpret the lase and analyze favors to determine parties intent as to liability for the particular repair.

landlord's remedies: eviction of tenant

i. Landlord may wish to evict tenant for: (1) during the term of lease for nonpayment of rent or for other cause; or (2) evict the tenant who holds over after the term expires ii. Eviction through judicial process - number of remedies to choose from: 1. Suit in ejectment - L can bring action in ejectment to recover possession. This always takes forever so they never do this. 2. Summary proceedings - landlord can recover possession quickly and at low cost. Must give notice to quit (usually 3 days) 2. Self-help not permitted - states prohibit self-help in recovering possession and require landlord to resort to statutory remedy

Fair housing act of 1968

i. Makes it unlawful to refuse to sell or rent a dwelling to any person because of race, color, religion, or national origin. It was also amended to prohibit discrimination on the basis of sex. Amended again to prohibit discrimination against persons with children except in senior citizen housing; and it prohibits discrimination against handicapped persons ii. The act also prohibits advertising or making any public statement that indicates any discriminatory preference. A statement to a tenant or prospective tenant that the landlord will not rent to persons protected by the Act violates the Act

tenancy at will

i. Term: tenancy for no fixed period of duration; to T for as long as L or T desires i. Notice: may be terminated by either party at any time however by statute in most states a reasonable demand to vacate the premises is typically required 1. terminated by the death of the landlord or tenant

how to prove discrimination

i. To prove a violation of the Fair Housing Act or section 1982, plaintiff must: 1. First, establish a prima facie case. To do so, plaintiff must show that (1) she is a member of a statutorily protected class, (2) she applied for and was qualified to rent the designated dwelling, (3) she was denied the opportunity to inspect or rent the dwelling, and (4) the housing opportunity remained available for others. 2. Second, if plaintiff makes a prima facie case, the burden shifts to the defendant to produce evidence that the refusal to rent was motivated by legitimate considerations having nothing to do with the plaintiff's race, religion, ethnic origin, sex, disability, or family status. If any of those or even one of several motivating factors, the statute is violated. 3. Third, once defendant introduces evidence of his alleged legitimate reasons, the burden shifts back to the plaintiff to show that the alleged legitimate reasons are pretextual and not the real reasons.

landlord duties: constructive eviction

i. Where, through the fault of the landlord, there occurs a substantial interference with the tenant's use and enjoyment of the leased premises, so that the tenant can no longer enjoy the premises as the parties contemplated, the tenant may terminate the lease, vacate the premises, and be excused from further rent liability. Known as doctrine of constructive eviction. 1. Constructive eviction applies where the tenant is left in possession but the tenant's use and enjoyment is disturbed. This serves to make the tenant's obligation to pay rent dependent on the landlord's performance of her covenant of quiet enjoyment. Gives the tenant the remedy of termination of the tenancy. 2. Actual eviction requires physical expulsion or exclusion from possession. If landlord changes locks or bars entry, the eviction is actual. If the landlord interferes with enjoyment, but does not bar entry, the eviction is constructive

Sublease

if a tenant transfers less than the entire remaining term of his leasehold, he has made a sublease, and he becomes the landlord of the sublessee. T has transferred only a portion of the leasehold interest to someone else i. L and T2 are in neither privity of estate nor privity of contract; T2 is responsible to T1 and visa versa ii. The sublessee is not in privity of estate with the landlord and cannot sue or be sued by the landlord. Because the sublessee has made no contract with the landlord, he cannot sue or be sued on a contract either.

landlord's duties: difference between actual and constructive eviction as to remedies

ii. *It is important to distinguish between actual and constructive eviction because the tenant's remedy varies with each. In the case of actual, partial eviction, the tenant can remain in possession of the rest of the premises and refuse to pay rent. This option is not available in the case of constructive eviction. If the tenant wants to stop paying rent in a constructive eviction scenario, he must abandon the premises and terminate the tenancy iii. Example. L rents to T who is a lawyer using it as an office. T works late but L turns the air conditioning off at 6. T finds he can't work because the office is too hot and stuffy. He stops paying rent due to constructive eviction. This doesn't work though because T cannot stay in the office and refuse to pay rent. To claim for constructive eviction and not have to pay rent anymore, the hurt party must abandon the premises.

exemptions to fair housing at

iii. Exemptions - private clubs, dwellings for religious organizations, and certain specified persons are exempt from the Act. Purpose is to protect some types of close personal relationships from what is thought to be an invasion of privacy. 1. A person leasing or selling a dwelling she owns is exempt if she: (1) does not own more than three such dwellings, (2) does not use a broker, and (3) does not advertise in a manner that indicates her intent to discriminate 2. A person is exempt if she is offering to lease a room or an apartment in her building of four unites or less, one unit of which she occupies, and she does not advertise in a discriminatory manner. Known as the "Mrs. Murphy exemption."