Property I

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Grey's Rule

a party must retain control of property even after incidental contact with people and things.

Popov v. Hayashi

Homerun hit into concourse, ¶ gets to it first but is mobbed. Ball squirts to ∆ who hides it until TV camera comes to him, then he shows it. Court held had to sell ball and split profits.

RULE: When two parties have legal claims of equal quality to personal property, the doctrine of equitable division is applied.
• General Rule: a party can retain a pre-possessory interest in property if it is forcibly or unlawfully removed from his possession.

Armory v. Del Amiri:

Chimney sweep finds ring in chimney, takes it to jeweler, jeweler does not return it to sweep. Court awards it to sweep.

RULE: Finder of lost property has claims better than all but true owner.

Ganter v. Kapiloff

Valuable stamps claimed to have been left in a sold armoire, but sellers denied ever selling the stamps.

RULE: Finders of lost property have a claim against all but the true owner.

Benjamin v. Lindner Aviation, Inc.

Mechanic finds money in airplane wing. Money deemed mislaid because purposely placed there. Court awarded money to bank that owned the plane b/c classified the money as mislaid property and mechanic only got 10% finder fee.

RULE: Mislaid property goes to land or premises owner.
• Dissent: Property was abandoned so should go to mechanic as finder.

In Re Seizure of $82,000

Car seized by govt from suspected drug smugglers sold at auction after prior owner failed to claim it. After auction, 82k found in gas tank, which went to new owners b/c car and contents were classified as abandoned.

RULE: Abandoned property goes to the finder.

Maritime Law of Salvage

The Salvager gets a percentage of the property after true owner appears.
• Rarely will a shipwreck be considered abandoned.

The Law of Finds

Applied when owners have expressly and publicly abandoned property. Also applicable if it is an ancient shipwreck outside territorial waters.

Property found embedded in the soil (or other fixture)

constructively said to be owned by premises owner.
• Otherwise lost/mislaid property found by an agent or employee goes to the employer.

Bailment

Rightful possession of personal property by one who is not the true owner.

Elements of Bailment

• Usually, delivery of property to bailee.
• Intent/knowledge of bailee to exercise control.
• Actual possession of property by bailee.

A finder of lost or mislaid property is always a bailee.

Four steps to analyzing a bailment

1. Does a bailment exist?
2. If so, what's scope of the bailment?
3. If so, what's standard of liability to be imposed on bailee?
4. Once standard of liability is established, who has burden of truth and how is it satisfied?
a. ¶ has to show delivery, intent, damage, then negligence presumed on part of bailee. Bailee must then prove not negligent.

If not a bailment, what is it?

A license. In matters of damage to property within license, must show the licensor was negligent (burden is on accuser)

Subrogation

taking over the claims of another with respect to property.

Riggs v. Bank of Camas Prairie

Bank customer gives bank lockbox containing "papers and other valuables." The box was burned in a fire and a large sum of money was lost. Court found for bank re liability for value of property lost. about scope of bailment.

RULE: a bailee is only responsible for what they know they take possession of.

Peet v. Roth Hotel Co.

¶ gave a ring to the hotel's reception to give to a guest. The hotel lost the ring, which was worth a lot. Court held for ¶ b/c regardless of whether she knew the value of it, the receptionist accepted the ring and it was lost/stolen so the hotel was liable, being unable to prove exercised reasonable care.

RULE: a bailee is responsible for what it knows it has. value is not a defense against liability. also, presumes bailee is negligent if does not deliver bailment back to bailor.

Allen v. Hyatt Regency

Parked car in a closed and attended lot held to be bailment b/c car was voluntarily parked (delivered) in an area of restricted access (single entrance/exit and attendants), and car was to remain there until ¶ returned. Also, the court noted that since ¶ was away at the time of theft, it would be nearly impossible for him to prove negligence.

RULE: Bailment was created so upon non-delivery, ¶ entitled to presumption of ∆ negligence by court.

Elements of Adverse Possession

Exclusive: actual entry, use, and possession of land.
Continuous: for statutory period. Depends on statute.
Hostile: w/o permission of true owner. See 3 way JX split.
Open and Notorious: actions must be apparent and noticeable.

JX Split on Hostile Element of AP

MAJ: does not care about hostile intent to possess, only that possession is hostile to true owner.

MIN 1: hostile means good faith belief that property is yours (operating under color of title, etc).

MIN 2: must know that land is not yours.

Monroe v. Rawlings

Court held that ∆s operated under "color of title," possessed the land, used it exclusively and continually for over 15 years, acted as an owner, paid taxes on it, and did so openly so quieted title for ∆. Discussed color of title in AP and element of continuity as regarding the intended use of the property.

RULE: the element of hostility may be satisfied so long as the property at issue is regarded according to its intended use.

Nome 2000 v. Fagerstrom

Inuit group in AK built a cabin and reindeer pen on a plot of land not its own. It also fished and foraged in the area and permitted others to do the same. Court gave part of parcel being used to ∆'s but did not allow them to take part not possessed/used.

RULE: AP only extends to the actual part of a parcel being continuously used, not the whole parcel so you can't bootstrap what you have not possessed/used.
• Hostility is an objective test - intent to appear hostile irrelevant.

Chaplin v. Sanders

∆ used strip of ¶'s land for his trailer park for years and treated it as his own property. When it was sold to ¶, the encroachment was discovered, but court quieted title for ∆ b/c fulfilled elements of AP and SOL ran.

RULE: you just have to treat property as your own to obtain it via adverse possession.

Wright v. Wright

Father leaves house to multiple children. House mostly used by one and his wife, they convey parts of the land, paid off the mortgage, and lived in the house continuously for 50 years even though technically cotenancy w/ siblings. Jury finding AP for ¶ affirmed.

RULE: Established that in order to prove AP claim in co-tenancy with a relative must prove the normal elements and a heightened standard
• Presumption that co-owner, even if in exclusive possession, is not holding adversely to other co-owner.
• Improvements did not strengthen claim to land, but selling did.

Porter v. Posey

Re disputed driveway/turnaround and transfer of adversely possessed property conveyed to new owner. ¶'s predecessors did not include the claimed/used land in deed. Court held ¶'s predecessors had established adverse possession by using the land as an owner would.

RULE: Court established writing was not necessary because in AP, privity was sufficient and right to possession was transferred.

Tacking

Years of AP held by a previous owner are tacked onto those of the current owner re statutory length of time for AP.

Autocephalous Greek Church v. Goldberg

Mosaics stolen after Cypriot civil war and sold to art dealer. Cypriot Greek Church wanted them back. Dealer was found liable of fraudulent concealment so replevin claim could succeed.

RULE: Doctrine of fraudulent concealment
o If property is being hidden, doctrine tolls SOL until: (Discovery Rule) SOL begins when true owner knows or should have know property is gone and/or who has the property.

Doctrine of Fraudulent Concealment

If property/claim is being hidden, doctrine tolls SOL until: (Discovery Rule) SOL begins when true owner knows or should have know property is gone/claim accrues and/or who has the property.

Probate Property

property subject to distribution by will or in intestacy when one dies.

Non-Probate Property

Property subject to distribution by means other than will or intestacy when one dies. Ex: life insurance policy, POD account, trust, etc.

Community Property

Husband and wife split everything 50/50 after marriage. Property acquired before marriage is separate and personal.

CL: Husband and wife get what they earn.

Fee Simple Absolute ("FSA")

One owns all the rights to a property.

Fee Simple Determinable ("FSD")

Formed by durational language such as "so long as/while/ during/until" and contains Possibility of Reverter in the grantor alone which can be transferred to a 3d party. If it reverts, grantor has FSA.

Fee Simple on Condition Subsequent ("FSCS")

Formed by conditional language like "on condition that/but if/provided that." If violated, grantor has Right of Entry and can reenter property (typically by suing for ejectment to regain FSA.

Fee Simple with Executory Limitations ("FSEL")

Created by durational or conditional language, holds executory interest in 3d party and no future interests in O but can temporarily revert to O until next interest vests if lacks a supporting estate.

Wood v. Fremont County

Land granted to county by ¶ to build a hospital and hospital was later moved and land sold. Court found for ∆ b/c language in deed insufficient to create FSD. Court called it FSA b/c no clause indicating what happens if breach of agmt.

RULE: to create defeasible fee, language must exist indicating what happens on violation of condition creating fee.

In re .88 Acres of Property

Land conveyed to city by ¶'s ancestors for specific purpose. City later used it for a different purpose, violating FSD, but adversely possessed it and acquired title before ¶'s descendants could bring suit to reclaim the land.

RULE: Once an FSD is violated, the land is being adversely possessed until the owner reenters and claims the property or until SOL runs and title is acquired.

Doctrine of Worthier Title

A doctrine in real property law creating a presumption that when a grantor conveys a future interest to the grantor's own heirs, the grantor actually intended to keep the interest in himself or herself. May be overcome with sufficient evidence of a contrary intent.

Created by "to A for life, then to heirs of the grantor."

JX Split on Doctrine of Worthier Title

MAJ: crosses out O's heirs.

MIN: Deed held as written.

JX Split on SOL Accrual After Violation of FSCS

SOME: Statute does not accrue until O reenters.

OTHERS: Statute runs upon breach, same as FSD.

JX Split on Waiver

SOME: silence or inaction for a reasonable time = waiver.

OTHERS: silence/inaction not equal to waiver.

Difference b/t Remainder and EI?

• Both occur in 3rd parties
• Both can follow a fee tail and life estate only
• Remainder may not cut short prior estate
• EI can cut short a vested interest/prior estate
• EI follows a vested interest directly or there is a gap between end of prior estate and next owner, during which O has reversion in FSEL.
• If B has EI, cuts short O's FSEL at time dictated by EI.

How To Analyze Restraints

• Direct v. indirect restraints
• Restraints on alienation as opposed to other rights
• How long the restraint would last
• How the restraint was put in place

A DIRECT RESTRAINT ON ALIENABILITY IS ABHORRED BY LAW

Spendthrift Trust

More than one beneficiary, but w/ express clause saying A and B cannot transfer interests and creditors cannot reach interests in trust.
• Bars voluntary alienation and bars involuntary alienation.
• Example of direct restraint on alienation that IS valid. (Basically trustee calls shots and controls property and beneficiaries are along for the ride).

Three Types of Restraint

• Disabling (Always Void): Any transfer is void.

• Forteiture (Void if unlimited, if limited, may be valid): if recipient acts or does not act a certain way, property reverts to grantor.

• Promissory (Valid): recipient covenants to restrain itself.

Alby v. Banc One

Parents conveyed land to daughter and husband in FSD restricting encumbrance of property. Daughter took out loans on property anyway and defaulted. When bank tried to repossess land, parents sued for quiet title claiming it reverted when took out the loan as it violated FSD. Court looked at scope, duration, purpose, consideration and found for ¶.

RULE: Family ownership not always subordinated to immediate and free alienability and that restraints may negatively affect marketability does not necessarily render them unreasonable.

Two Types of Waste

Voluntary Waste: Any action that decreases value of property.

Permissive Waste: Inaction that decreases value of property (not fixing roof, not paying taxes, etc).

3 Exceptions to Waste

1) Estovers
2) Open Mine Doctrine
3) Emblements

Open Mine Doctrine

Mines must be open and working before acquiring property for life tenant to use them.

Emblements

Life tenant owns crops/value of crops grown on his land, even if not harvested before death.

Doctrine of Estovers

An action that decreases value in an estate but is only used for one's own purposes and not profit.
• For example, cutting down trees for firewood.

Life Tenant Mortgage Payment

Interest only. Principal paid by either grantor to whom it will revert or the next in line to get the property.

Brokaw v. Fairchild

Father bought up land, built grand houses on it, and left it to ¶ as in LE. ¶ wanted to demolish houses and build apts to make money, but was barred by the remainder holders b/c he only had LE and that act would constitute waste. Court held for remainder holders due to below rule.

RULE: A life tenant may not demolish his inherited building against wishes of remaindermen even if property would be more valuable if demolished. Such action would constitute waste.
o Generally, any act by life tenant that causes permanent injury to an inheritance is waste.

Melms v. Pabst Brewery

¶ had mansion right next to his brewery that was sold to ∆, but ¶'s wife had LE in the mansion. The area changed and was industrialized so the ∆ graded right around the mansion and eventually removed the mansion, making it a parking lot. Court found for ∆ b/c it thought it owned the mansion when it demolished it, and it actually ended up increasing the value of the land for ¶.

Three Types of Partition of Real Property

In kind - property divided by boundary.

By sale - when partition in kind not possible, property or some of it is sold and proceeds divided among cotenants.

By Allotment - one cotenant buys the shares of the others at the original value of the property pre-improvement.

Beach v. Beach

Daughter let parents build an addition to her home, which she would get when they died. Mother later sued to partition addition from house but was denied b/c it was LE anyway and daughter had remainder as a successive, non-concurrent property interest. Court found for daughter.

RULE: Court cannot force sale of partition where market value cannot be determined and injustice would occur to a party.

Severing a JT

Convey by deed (one or all joint tenants).

Split on whether lease severs JT:
SOME: Yes it does.
SOME: No it does not.

Split on whether contract to sell severs JT:
MAJ: No it does not.
MIN: Yes it does.

In case of a FINAL divorce decree:
MAJ: Final divorce decree giving full possession to one party does not a JT.
MIN: Final divorce decree giving full possession to one party severs a JT and makes it TnC.

Severing a TbE

Only a FINAL divorce decree severs a TbE.

Crowther v. Mower

∆'s mother signed a quitclaim deed for property held in JT with her husband, the ¶, to ∆ and he recorded it after she died. ¶ brought suit to quiet title. Court found for ∆ b/c deed was effective and ∆ foung to be TnC w/ ¶.
• RULE: MAJ - JT severed when deed signed and delivered. CA Statute (MIN): must execute and deliver deed, and deed must be recorded before death of JT or deed notarized no earlier than 3 days before JT dies.

Phillips v. Nyhaus

Partners bought property as JTRoS. Both signed a contract to sell the property and earnest money agmt was signed. One partner died before the sale was complete and estate of the deceased brought suit against the partner for proceeds from the sale. The partner claimed the sale severed the JT. Court held for estate of deceased b/c land not conveyed yet and contract to sell did not sever.

RULE: Contract to sell does not sever JT and proceeds are still required to go to both tenants. JT not severed until conveyance occurs.

Albro v. Allen

Parties had JTFRoS. ∆ sold her interest to Kinzer giving him and ¶ LEs w/ dual CRs. Court held for ∆ b/c she could transfer her interest to him but only for ∆'s life.

RULE: MIN - Creating Full ROS in JT makes the JT non-severable.
o Means if A and B have Full RoS, b/c cannot sever, A can transfer to C for length of A's life. now B and C have current possessory interest as JTRoS. If A survives B, C gets FSA. If B survives A, B gets FSA.

Porter v. Porter

Husband and wife get divorced. The house they own as TbE is given exclusive possession to wife, but divorce decree not final. Husband remarried and, when he died, new wife sued to get house. Court found for ex-wife in FSA.

RULE: JT not severed by exclusive granting in a divorce decree b/c unity of possession not destroyed by court retaining further power to change divorce arrangements.

Brant v. Hargrove

Wife borrowed money against house owned as JTRoS w/ husband. Lender tried to come after him and house after she died. Lender got nothing because she died and lien disappeared with her. LIEN THEORY MAJ 1

JX Split on Whether Encumbrancing a Property Severs a JTRoS

MAJ 1: Lien Theory: Deed w/ mortgage creates only a lien on the house but does not transfer title to lender.
o If JT who signed the mortgage dies, the lien disappears along with the deceased tenant's interest.

MAJ 2: lien stays on property but no obligation on remaining cotenant to pay.

MIN: Title Theory: the Deed is treated as conveyance to lender so ROS is automatically destroyed and JT severed. Lender gets the mortgaging cotenant's interest.

Joint Bank Accounts

JT is presumed
o 2 or more names on acct
o All can withdraw
o Survivor gets the money

POD Account

o 2 names on acct with one designated to recover on death.
o B cannot withdraw money.
o B only gets money when A dies.

Convenience Account

o Created with "B as agent for A."
o B can only withdraw money for A.
o B does not get money when A dies.

Esteves v. Esteves

Parents and son purchase house as TnC. Son makes improvements then later moves out so parents live in house alone for 18 years, wherein they paid all the expenses for the house. After selling, the issue of how to divide proceeds arose. Court held that parents owed son for improvements and reasonable rental value, but son owed parents for mortgage, taxes, and insurance, which were offset to determine allocation of proceeds.

General Rule (vast MAJ): Absent ouster or agmt, cotenants do not owe rent to the others.
o If in tenant requests contribution from out tenant, in tenant will owe reasonable rental value if out tenant requests accounting.
o Esteves said burden on out tenant to prove reasonable rental value.

--- Only to be applied to JT and TnC ---

Three Remedies for Cotenants

1) Contribution
2) Partition
3) Accounting

Contribution

Typically requested by the demanding tenant for prorated reimbursement of mortgage, taxes, insurance.
o The most important things re persevering the property.

Accounting

Typically requested by the responding tenant after demand for contribution from in tenant, for prorated reimbursement of mortgage, taxes, insurance, repairs, income from 3d parties, and is offset by reasonable rental value of in tenant if in tenant demands contribution.
• If tenant paying mortgage is living in property, must take into account reasonable rental value as well.

Partition

Also entitled to accounting.

• Partition In Kind: divides property physically to tenants by who has improved what portion.

• Partition By Sale: sells property and allots proceeds, amount earned via the improvements, to tenant responsible for improvement.

Partition by Allotment: One cotenant basically buys out the others at the values of their shares of the property before it was improved.

Carr v. Deking

Father and son owned property as TnC. Dad leased the land without son's approval. Son wants to oust the tenant and enter the interest held by the lessee. Court held for lessee b/c one cotenant can lease his interest in the property, meaning the son could get half the income.

Son's remedies
o Partition
o Consent to the lease (affirm) and receive half income. However, the son cannot oust the tenant b/c the lease is valid.

RULE: One co-owner may lease the property to a 3d party. The lessee takes only the co-owner's interest though. The other tenant can sue for partition.

Massey v. Prothero

Brother, though TnC w/ siblings, purchases tax deed to property at auction. He then tried to end their claims to the house but couldn't. Court found for siblings.

RULE: A cotenant may not extinguish the claims of other cotenants by buying the tax deed b/c it is viewed as an action beneficial to all cotenants, but the purchaser may ask for contribution.

Ark Land v. Harper

Ark Land bought 67.5% of property from sibling co-owners and tried to force a sale to get rest and mine on it b/c remaining sibling co-owners would not sell and it would cost more to mine only portion it had. Court found for ∆, deciding it would not force a tenant to sell property regardless of the greater economic value proposed by opposing party b/c it disregards any emotional or other interests owners might have in property and that partition by sale possible only if partition in kind not possible.

Lakatos v. Billotti

Husband killed wife and tried to convey property to himself through straw man. The court + statutes find that TnC property is now ½ husband's and ½ property of heirs of victim. For JTROS property, it is as if husband did not survive wife he murdered and property is passed on to the heirs of wife.

RULE: Killing joint tenant invokes "slayer statute" and makes it so the killer never outlived victim and victim's heirs get property in FSA.
• In TnC, killer owns half the property but victim's half goes to heirs.

Owelty

Compensation paid by one cotenant to the other after partition in kind, where the paying cotenant receives land improved by the other or a greater portion of the land.

Diff b/t Common law and UPC In Cotenant Violence

UPC turns a JT where a cotenant kills the other into a TnC w/ victim's heirs.

Slayer statutes act as if killer in JT was predeceased so only victims heirs received property as in Lakatos.

Benham v. Morton

¶ visiting cabin rented by her sister and gets hurt. Court rules they are licensees so rental company is liable. Lessors would not have had a claim.

License v. Lease

License is when terms of possession are like a hotel.

Lease is when terms of possession are like an apt.

Term for Years (or Fixed Term Tenancy)

• Language to create: "to T for ___ years/months."

• Key Feature: Ending date fixed at outset.

• Notice required to end? No.

Periodic Tenancy

• Language to create: "to T from month to month/year to year."

• Key feature: rolls over indefinitely.

• Notice required to end?
CL: 6 months standard.

MAJ: ntc = period (so a month to month lease means one month notice to end).

MIN: secondary ntc required.

Tenancy at Will

• Language to create: Express or implied.

• Key feature: No fixed period.

• Notice required to end? Required, but if L or T dies, it ends.

Tenancy at Suffrance

• Language to create: None. T holds over after end of prior lease.

• Key feature:
o Landlord can hold T to addt'l period (month/year, etc), or;
o Landlord can evict

• Ntc required to end? If evicting, must give ntc. If not, landlord must decide which of above tenancies he wants and give ntc of that.

Common Law View on Writings for Leases

Must be written if over 3 years.

Modern vast MAJ: lease exceeding one year needs to be in writing.
• MUST look at whether it can be performed in a year or less.

Common Law View of Oral Leases

In oral leases violate SOF, all JX will say term is invalid.

• MAJ: turns into periodic tenancy according to how rent was paid.
• MIN: term for maximum allowed by SOF, usually a year. If statute says 3 years, and oral contract is 5, then only 3 years is valid.

JX Split on Requirements for Signing Leases

MAJ: lease does not need to be signed by both parties. Needs to be signed by "the weasel" - whomever would try to "weasel" out of the agmt.

MIN: lease needs to be signed by both.

David Properties v. Selk

Selk sold property to David, but didn't leave even though the they kept writing letters to him to either leave or pay. The letters from ¶ extended the term of ∆'s tenancy until ∆ left mid month after two years and ¶ brought suit for breach of contract. Court found that ∆ owed rent to ¶ but that it was offset w/ what ¶ owed ∆ for purchase of the property.

RULE: if a tenant retains possession of some of the land without owners approval, he retains all of it.
• L can fix rent. Does not need to prove "reasonable rental value" if suing for back rent.

Steps For Analyzing a Tenancy

• What type of tenancy?

• Does it need writing (SOF)?

• What are the terms?

Adrian v. Rabinowitz

¶ leased store space from ∆. On first day of lease, ¶ was unable to move in b/c previous tenant wrongfully held over. ∆ finally ejected holdover after a month. ¶ sued for breach of contract and won b/c court ruled L has a duty to provide legal AND actual possession to T on day lease begins.
RULE: English Rule - actual and legal possession MUST be delivered to T on first day of lease.

Tenant Right to Possession - American Rule

(MIN) American Rule - T gets legal right to possession. No implied covenant of actual right to possession.

Tenant Right to Possession - English Rule

(MAJ) English Rule - T gets legal right to possession. Implied covenant of actual right to possession.

o Rightful T can sue L under this rule b/c L has obligation to deliver actual possession to T. Rightful T may also prorate rent for time not in possession of property. Rightful T can also sue holdover T to get him out.

URLTA

Uniform Residential Landlord Tenant Act. Only applies to residential leases.

Tenant Duty to Occupy

Generally NOT implied UNLESS:
• Express language of agmt, or;
• Implied, if rent is nominal and T has agreed to pay % of profits to L via implied covenant. In such a case, if T doesn't occupy, L might have cause of action.

CL View of Duty To Repair

No duty to repair on either party. T can't commit waste though.

Affirmative Waste: T's own acts creating damage. T obligated to repair.

Permissive Waste: Failing to prevent damage caused independently of acts by T. T not obligated to mitigate, not repair. L obligated to repair.

Hadian v. Schwartz

Dispute b/t L and T as to who should pay for upgrading building leased by T to meet CA earthquake code. Court found for T and said L should pay using the six factors test.

Six Factor Test re Duty To Repair

1) Relationship of cost of curative action to rent reserved.
2) Term of lease.
3) Relationship of benefit of lessee to of reversioner.
4) Whether curative action is structural or non-structural in nature.
5) Degree to which lessee's enjoyment of premises will be interfered with while curative action undertaken.
6) Likelihood parties contemplated application of particular law or order involved.

Barash v. PA Terminal Real Estate Co.

Leased premises did not have air flow through the building and a/c was only on at certain hours so remaining in the building was unbearable. No constructive eviction in this case b/c ¶ did not leave premises. Court found for ¶ anyway due to statute too.

RULE: a tenant is constructively evicted only when he is forced to completely abandon the premises due to discomfort or hardship.

Actual Eviction

L has taken steps to eject T: changing locks, throwing stuff on lawn, etc.

Actual Partial Eviction

If lessor leases part of already leased area to another party as well:
• Must look at whether it is material portion of premises if T wishes to terminate lease.

• If not material portion being evicted, T can decrease rent in proportion to space evicted.

• Common law: if L interferes with T, T can withhold rent.
o Today, actual partial eviction only applied if violating lease does not materially affects prior leased premises and rent is adjusted to match how much of space is actually held.

Constructive Eviction

T must leave entirely and move all property out of premises b/c L makes it miserable or impossible to remain on premises.

Covenant of Quiet Enjoyment (CQE)

Applies to all leases (commercial and residential).
• If L breaches:
o Subjective standard of measurement - the individual L.
o T must be constructively evicted.

• Defects can be waived.

Implied Warranty of Habitability (IWH)

Applies only to residential leases.
• L, 3d party, or elements can cause breach.
o Objective standard of measurement.
o Defects cannot be waived.
o L's duty to maintain habitable and safe premises for entire lease and implies L's duty to repair.

Remedies for Violation of IWH

• Rescind lease (terminate lease)
o requires constructive eviction.

• Reformation of lease:
o Repair and deduct from lease.
o Withhold rent without abandoning premises. T Pays rent into escrow and L usually sues T where claim of IWH arises.

• Damages: T recovers overpayment relative to reasonable rental value as determined by court by suing for IWH.
o Punitives
o Specific performance

Hilder v. St. Peter

¶ was resident in ∆'s apartment complex, and paid full rent despite serious defects and unsanitary conditions in unit. ¶ also repaired unit out of pocket and cleaned unit in exchange for security deposit returned, which ∆ denied receiving. Court found for ¶.

• IWH if non existent in statute
o If statute, it tells which kind of residential leases covered by it
o If implied by court, covers pretty much all residential leases.

Steps Before Making Good Faith Claim of IWH

1) T must have lease.
2) L must have ntc of problems: it can be obvious or obscured defect and can preexist lease or arise later.
3) T must allow reasonable time to fix problem.

Detling v. Edelbrock

L countered claim of violation of IWH by claiming lease was illegal b/c defects existed at time of lease, but it was rejected because it was not timely. Court found for T but held L could still recover reasonable rental value.

• Raises the concept that IWH can be affected by lease being illegal.
o For lease to be illegal due to code violations, violations must preexist lease.
o Some states don't have housing codes to be violated.

• A statute is not the exclusive remedy for a tenant unless explicitly stated in the statute.

Formulas to Determine Measure of Damages in Violation of IWH

Formula 1: rent paid - reasonable rental value (if T is overpaying).

Formula 2: if apt was habitable, what would it have been worth? - rent paid.
• Difference between rent paid and actual rental value would go to T, but housing code violation does not need to be proven to recover.

Exceptions to URLTA

• Frats
• Living in property before purchase completed.
• Farmhouse leases b/c farm is primary reason for lease.
• Co-ops and condos are owned, not leased so URLTA does not apply.

Elements of CQE

• L promises will not interfere with T's use or enjoyment of property.
• If L's actions cause T to have to leave property entirely, it is constructive eviction.
• L has power to demise.
• T has legal right to possession of property.
• T will have actual possession

Paxton Test - Retaliatory Eviction

T must prove:
• L is in business of renting residential property.

• T is not materially in default of obligations.

• L is primarily motivated by T's complaints. URLTA says if eviction within 1 year of complaint, retaliation is presumed.

• T claims in good faith and for reasonable cause.

JX Split on Evicting W/O Appearing Retaliatory

• SOME say L can evict once repairs are made and T is given sufficient time to find housing.

• SOME say L can't evict until can show motivation is not retaliatory.

URLTA Policy re Security Deposits

Limits sec dep to one month's rent
• L can only use it to pay back rent and damages

• 14 day ntc requirement of withholding sec dep and it must be itemized.
o if L does not comply, T can get back twice the amt withheld and attys fees.

NM Statute re Security Deposits

L must give itemized ntc of witholding sec dep w/ 30 days ntc.
If L does not comply, then all claims against T forfeited.
• Can still use sec dep for back rent but not repairs

JX Split on Eviction Rights

MAJ - Judicial Proceeding
• L may not forcibly enter the property to evict T even though T does not have the legal right to possession.
• Forcible Entry and Detainer ("FED") or UD must be through court.

MIN 1: "English Rule" allows L to use reasonable force necessary to evict T from property.

MIN 2: peaceful self-help. L may enter premises, but not when anyone is there. If that fails, must take legal action.

Ouster

Where one cotenant bars the other cotenants from using or possessing the property.

Service Oil v. White

Lease signed for gas station but owner misrepresented about ownership property and suitability of use.

RULE: No warranty of suitability of premises implied by law for commercial properties, only for residential (IWH).

Steps for Analyzing Who Must Repair

Start with common law perspective (no obligation on either but T has duty to try to mitigate reasonably)

Then look if lease indicates obligation on either party

If lease is silent on an issue, such as government mandate to repair or update, landlord would have obligation
o Use six factor test from Hadian v. Schwartz

Abandonment

If T abandons property, L may:
• Take back premises for L's account
• Do nothing and not accept the surrender by T
• Re-lease premises for T's account = mitigation

JX Split on Duty to Mitigate

MAJ: in res leases, L has duty to mitigate. Not in commercial.

MIN: L has duty to mitigate in both res and commercial.

JX Split on Mitigation

L must treat the property as back on the market.

MAJ: T has burden to show L has duty to mitigate and failed to meet it.

MIN: L's duty to mitigate and prove it.

Failure to mitigate is not a cause of action but it can be used as an affirmative defense.

Austin Hill v. Palisades Plaza

Lease stipulated that L must remodel interior for T. When L tried to contact T for instructions, it received no response. L sued for breach and T claimed that L had failed to mitigate. Court decided L must mitigate, especially if L reenters. Also, if lease allows L to go in, must mitigate.

Talbot Case

L leasing property to T and then leasing part of that to another party may result in actual partial eviction.

Mercury v. Woolworth's

No duty to Occupy b/c T paid standard rent, not nominal, so no benefit to L to ask for more hours or better work by T.

Garcia v. Thong

L must provide a written, itemized statement of damages to a departed T or forfeit all claims to the damage deposit.

Bruce Case

If L doesnt give itemized ntc, can still claim back rent.

When Oral Lease Does Not Satisfy SOF

SOME: Lease is only valid as long as SOF would allow for unwritten lease.

SOME: Lease becomes periodic for what ever payment period was in lease, so month to month or something like that.

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