Assignments and Subleasing
A landlord is not liable to the tenant or others on the premises with the consent of the tenant for injuries caused by a condition of the premises, except in the following situations:
(a) an undisclosed dangerous condition exists that is known or should have been known to the landlord but is unknown to the tenant; (b) a condition exists that is dangerous to persons outside of the premises; (c) the premises are leased for admission to the public; (d) parts of land are retained in the landlord's control but are available for use by the tenant; (e) the landlord has contracted to repair; or (f) the landlord has been negligent in making repairs.
What can a LL do if a tenant abandons the premises?
(a) retake the premises; (b) ignore an abandonment and continue to hold the tenant liable for rent; or (c) reenter and relet the premises.
If the tenant fails to pay rent or commits another material breach of the lease, the landlord may seek
(a) to evict the tenant; and/or (b) to recover damages for the tenant's breach.
Vertical Privity and Covenant to Rent
. An assignee is in privity of estate with the landlord but a sublessee is not, so a covenant can be enforced against an assignee but not a sublessee.
Silent Consent Clause
A consent clause in the lease that does not state a standard or condition for giving or withholding consent is commonly known as a "silent" consent clause.
Traditional/Majority Rule for Consent Clause
A silent consent clause gives the landlord the right to withhold consent for any reason, or for no reason at all, even if withholding consent is arbitrary and unreasonable. This rule is subject to any applicable statutory housing discrimination laws
Creation of a sublease
A sublease occurs when the tenant transfers to a third person (the subtenant or sublessee) less than all of his rights, title, and interest in the leased premises.
Privity of estate relationship between LL and sublessee
A subtenant does not come into privity of estate with the landlord.
Death of a tenant at will
A tenancy at will, however, will be terminated by the death of either party.
When does a tenant abandon the premises?
A tenant abandons the premises if she vacates the premises without intent to return and fails to pay rent
Tenant's Remedies for Landlord's Breach of Duty
A tenant may seek money damages for the landlord's breach of the lease. Statutes in many jurisdictions provide the tenant with the following statutory remedies: 1) withholding rent; or 2) repairing the premises and deducting the cost of repair from subsequent rent payments.
Is the original tenant still liable to the LL?
Absent a novation, the original tenant always remains liable to the landlord even after an assignment or sublease. This is because the original tenant remains in privity of contract with the landlord.
Privity of estate relationship between LL and assignee
An assignee comes into privity of estate with the landlord.
Creation of Assignment
An assignment occurs when the tenant transfers to a third person (the assignee) all of his rights, title, and interest in the leased premises. · Tenant transfers all of the remainder of the interest (rental obligation) to a new party.
How is a sublessee or an assignee liable to the LL?
Either through privity of contract or privity of estate
Covenant of quiet enjoyment
Every lease contains one: express or implied LL promises the tenant that the landlord (or someone claiming through the landlord) during her possession of the premises. A tenant may treat the lease as terminated and withhold rent if the covenant of quiet enjoyment has been breached by an actual or constructive eviction.
Death of a LL with a life estate
If the landlord holds a life estate in the leased property, the lease is considered void upon the death of the landlord.
Middle of Chain assignees
If there is more than one transfer, only the original tenant and the current tenant are liable to the landlord for rent. Middle-of-the-chain assignees are not liable to the landlord, only to the original tenant.
Death of a tenant for years
In the absence of a contrary provision, the death of a tenant for years will not terminate the tenancy, and the leasehold will pass as personal property through the tenant's estate. (a) This may not be the case if, for example, the terms of the lease contain a provision that it terminates upon the death of either party, or the nature of the lease and peculiar qualifications of the tenant make the lease personal to the tenant.
Definition of privity of contract
Privity of contract is the relationship that exists between the original parties to an agreement. Privity of contract will always exist between the original parties and only those original parties, unless there is a novation.
Definition of privity of estate
Privity of estate arises through the succession in rights to the same property by multiple parties.
Retaliatory Eviction
Prohibited
Self-Help Modern Rule
Prohibited, must seek court action to reeenter
Privity of Assignee
The assignee comes into privity of estate with the landlord, while the tenant remains in privity of contract with the landlord.
Who is entitled to collect rent?
The landlord of record, on the date the rent is due, is entitled to that rent.
Privity of Sublessee
The sublessee comes into privity of estate and privity of contract with the tenant, owing the tenant rent. The tenant continues to owe rent to the landlord.
Definition of Novation
This is a separate agreement between the landlord, original tenant, and assignee whereby the landlord agrees to discharge the original contracting party (the original tenant) from contractual liability in exchange for the assignee becoming liable as if he had signed the original lease agreement.
To show breach of implied warranty of habitability
To prove that the landlord has breached this warranty, the tenant must show a defect in essential residential facilities. In the majority of jurisdictions, the defect may be patent (obvious) or latent (nonobvious). To claim a breach of the implied warranty of habitability, the tenant must: 1) provide the landlord with notice of the defect; and 2) allow the landlord reasonable time to make necessary repairs
Implied Warranty of Habitability
Under the modern trend, the landlord is deemed to have impliedly warranted that the residential premises are fit for habitation. The implied warranty of habitability guarantees that the landlord will deliver and maintain premises that are safe, clean, and fit for human habitation. Does not apply to commercial leases
Sale of property by LL: generally
When a landlord sells the property, there is generally no effect on the tenant, unless the lease provides otherwise, except for the tenant paying rent to the new landlord. If the lease contains such a term, then the buyer may terminate the lease upon the conclusion of the sale. Otherwise, the buyer "steps into the shoes" of the original landlord as to all contract obligations.
Death of either party: in general
a lease will not be terminated by the death of either the landlord or the tenant
Assignments are made by...
either LL or tenant
Assignee is liable to the LL for rent unless...
he or she re-assigns to a new assignee who takes over privity of estate
Rule in Dumpor's Case
once waived, a covenant against assignment is unenforceable as to the next assignment. (a) The Rule in Dumpor's Case does not apply to subleases. (b) The Rule in Dumpor's Case also does not apply where the landlord specifies that the waiver is "one-time only." In this situation, the covenant will remain against subsequent assignments.
Covenants against subleasing/assigning are construed....
strictly against the LL
In an assignment, who is liable for rent?
the assignee
Covenant to Pay Rent can be enforced by
the landlord against the original tenant because of the contractual nature of the relationship
Modern Majority Rule for LL Mitigating Costs After Abandonment
the landlord has a duty to mitigate if the tenant abandons. If mitigation is required, the burden of proof is placed on the landlord to show that he attempted to mitigate his losses. Where the landlord relets the premises on the tenant's behalf, the landlord is entitled to damages from the tenant based on the difference between what the tenant owed for rent and what the landlord collected from reletting.
To prohibit both an assignment and a sublease...
the lease must specifically state that both are prohibited
Rent acceleration clauses
the modern majority rule permits the use of rent acceleration clauses in leases. In an action for rent, the tenant may defend on the grounds of non-compliance by the landlord or on the ground of destruction of the premises.
For the original tenant to be discharged from liability
there must be a novation
If a buyer purchases property without notification of the lease and qualifies under the jurisdiction's applicable recording statute...
they would take the property free of the lease. Leases are considered encumbrances on the property. If the buyer knows about the lease and purchases the property anyway, they have accepted that encumbrance and are bound to the lease. On the other hand, if the buyer has no actual notice of the lease, it is not recorded (no constructive notice), and the buyer could not have discovered the leasehold by visiting the property (no inquiry notice), then the buyer would not be bound by the lease, and their purchase (free of the lease) would have higher priority to the property than the tenant would have.
If the LL is not receiving rent, who can be evicted?
this is a material breach of the lease and the landlord can have the assignee or sublessee evicted.
Anticipatory Repudiation
under modern law, when the lease is for a tenancy for years and the tenant abandons the property, the landlord may treat this as an anticipatory breach of the entire lease, entitling the landlord to sue immediately for all rent due on the entire agreement (subject to the landlord's duty to mitigate damages).
In order for the original landlord to enforce covenant to pay rent against a new tenant...
· the requirements for a covenant running with the land must be satisfied:
