Based on Professor Franseze's Property Lecture for CA bar exam.
Four Leasehold or Nonfreehold Estates
1. Tenancy for years, 2. Periodic Tenancy, 3. Tenancy at Will, 4. Tenancy at Sufferance
Tenancy for years
A lease for a fixed period of time. That period may be as short as a day, or 2 months, or 50 years. When you know termination date from the start, you have the tenancy for years. No notice needed to terminate. Term of more than one year must be in writing due to Statute of Frauds.
Lease which continues for successive intervals until Landlord or Tenant give proper notice to terminate. Can be created expressly. It is continuous, open ended in nature. Also can be created by implication.
Periodic Tenancy by implication
Three ways: 1. Land is leased with no mention of duration, but provision is made for payment of rent at set intervals. 2. An oral term of years in violation of the Statue of Frauds creates implied periodic tenancy measured by the way rent is tendered. 3. Holdover: In a residential lease, if L elects to hold over a T who has wrongfully stayed on past the conclusion of the original lease.
Termination - Periodic Tenancy
Usually written notice must be given at least equal to period itself unless otherwise agreed. In month to month tenancy - 1 month, in week to week - 1 week. If tenancy is from year-to-year then 6 months or greater. Note: Periodic tenancy must end at the conclusion of a natural lease period.
Tenancy at Will
Rare. This is a tenancy for no fixed duration. "To T for as long as T desires." Unless parties expressly agree to tenancy at will the payment of regular rent will cause court to treat this as an implied periodic tenancy.
Tenancy at will, termination
May be terminated by either party at any time. BUT reasonable demand to vacate is usually needed.
Tenancy at sufferance
Created when T has wrongfully held over past the expiration of the lease. We give the wrongdoer a leasehold estate to permit Landlord to collect rent. Lasts only until landlord either evicts Tenant or decides to hold him to a new tenancy.
1. Tenant's liability to third parties - tort law; 2. Tenant's duty to repair; 3. Tenant's duty to pay rent.
Tenant's liability to third parties, tort law
Tenant is responsible for keeping the premises in good repair. Tenant is liable for injuries sustained by third parties Tenant invited, even where landlord expressly promised to make all repairs.
Tenant's duty to repair
When lease is silent tenant must maintain the premises and make ordinary repairs. Tenant must not commit waste. The law of fixtures walks with doctrine of waste. When T removes fixture he commits voluntary waste.
Law of Fixtures
Fixture is a once movable chattel that, by virtue of its annexation to realty shows the intent to permanently improve the realty. This is an objective standard. Examples: heating systems, custom storm windows, furnace, some lighting installations.
Tenant must not remove a fixture no matter that she installed it. Fixtures pass with ownership of the land.
When does tenant installation qualify as a fixture?
1. Express agreement controls. 2. In absence of agreement, T may remove chattel that she has installed so long as it wont cause substantial harm to premises. 3. If removal will cause substantial damage, then in objective judgment Tenant has shown intent to install a fixture.
Tenant's duty to repair when tenant has expressly covenanted in lease to maintain property in good condition
Common law - T was liable for any loss to property including loss due to force of nature. Today, majority view, tenant may terminate lease if premises are destroyed without tenant's fault.
Tenant's duty to pay rent
If tenant breaches payment of rent and still in possession of property landlord's only options are to evict through the courts or continue relationship and sue for rent owed.
Self Help - tenant doesn't pay rent
Landlord must not engage in self help. No changing of locks, forcibly removing tenant, or removing tenants possessions. Self-help is flatly outlawed, and is punishable civilly and criminally.
Tenant breaches duty but out of possession.
If tenant wrongfully vacates - Remember S I R: 1. Surrender. 2. Ignore abandonment. 3. Re-let premises
Surrender - S I R when tenant wrongfully vacates
Landlord can treat abandonment as offer of surrender which landlord accepts. If unexpired term is greater than one year surrender must be in writing to meet statute of frauds. Letter from landlord to tenant.
Ignore abandonment - S I R when tenant wrongfully vacates
Landlord can ignore the abandonment and hold T responsible for the unpaid rent, just as if T was still there. This option is available only in a minority of states.
Re-let premises - S I R when tenant wrongfully vacates
Landlord may re-let premises on wrongdoer tenant's behalf, and hold him or her liable for any deficiency. Majority rule: landlord must try to re-let, good faith effort, mitigation principle.
1. Duty to deliver possession 2. Implied covenant of quiet enjoyment 3. Implied warranty of habitability 4. No retaliatory eviction
Duty to deliver possession - Landlord Duties
Majority, English rule, requires that landlord put tenant in physical possession of premises at the start of tenant's lease or if breach damages. Minority, American rule, only requires landlord give legal possession.
Implied covenant of quiet enjoyment - Landlord Duties
Applies to both residential and commercial leases. Tenant has right to quiet use and enjoyment of premises. Breach by wrongful eviction when L wrongfully evicts T or excludes T from premises.
Implied covenant of quiet enjoyment, Breach by Constructive Eviction
Constructive Eviction if 3, S I N G, elements met: 1. Substantial Interference - Due to L's actions or failures - recurring, chronic problem 2. Notice- T tells L about problem, L fails to act 3. Goodbye - T vacates in reasonable time after refusal to fix
Implied warranty of habitability
Applies only to residential leases. It is non-waivable. Premises must be fit for basic human dwelling. Bare living requirements met. Standard set by housing code or court decisions. No heat in winter, no running water.
Implied Warranty of Habitability Breached - Tenant's rights
M R3: Move, Repair, Reduce, Remain. (p. 44) Move out, end lease. Repair and deduct, allowable by statute. Reduce rent until court determines fair rental value. Remain in possession, pay rent, seek money damages.
Retaliatory Eviction - not allowed
If Tenant reports landlord for housing code violations, landlord is barred from penalizing tenant by raising rent, ending the lease, harassing tenant, or taking or reprisals.
Assignments and Subleases
Unless prohibited by the lease, a tenant may transfer his or her interest in whole, an assignment, or in part, a sublease.
Prohibitions on assignments and sublets
Are permitted! Landlord can prohibit tenant from assigning or subletting without landlord's written approval. Once landlord consents to one transfer by tenant, landlord waives the right to object to future transfers by that tenant unless landlord reserves the right.
Tenant 1 transfers remaining term of lease two tenant 2. Hence, landlord and tenant 2 are in privity of estate. Landlord and tenant 2 are liable to eachother for all covenants of the original lease that run with the land.
Assignments, Covenants that run with the land
Promise to pay rent, to paint, to repair. Most promises in original lease run with the land.
Assignments and privity of contract
No privity of contract! Unless Tenant 2 assumed all promises in original lease.
Impact of assignment on tenant 1
Landlord and tenant 1 are no longer in privity of estate. However, they remain in privity of contract. Thus landlord and tenant 1 are secondarily liable to eachother for originally exchanged promissory words.
L leases to T1. T1 assigns to T2. T2 assigns to T3. T3 engages in abuse to the premses. Can L proceed against T3, the direct wrongdoer? Can L proceed against T1? How about T2?
Yes! L wins against T3! L and T3 are in privity of estate. L can also proceed against T1 under privity of contract! BUT L cannot proceed against T2. Privity of estate with T2 ended when T2 assigned to T3. Never privity of K unless T assumes all promises of original lease.
Sublease, landlord tenant relationship
L and sublessee are in neither privity of estate nor privity of contact. T2 is liable to T1 and vice versa. L and T1 remain liable to eachother under original lease.
Caveat Lessee, Landlord Tort Liability
Caveat Lessee: Let Tenant Beware. The norm in tort law is that landlord was under no duty to make premises safe.
CLAPS, Landlord Tort Liability
Claps, C L A P S: Five exceptions to common law caveat lessee: 1. Common areas. 2. Latent defects. 3. Assumption of repairs. 4. Public use rule: 5. Short term lease of furnished dwelling.
Common areas, Claps
Landlord must maintain all common areas, hallways, stairwells.
Latent defects rule, Claps
Landlord must warn T of hidden defects that Landlord knows about or should know about. Simply a duty to warn, not to repair.
Assumption of repairs, Claps
Landlord who voluntarily makes repairs must complete them with reasonable care. If Landlord fixes negligently and tenant is injured then landlord is liable.
Public use rule, Claps
Landlord who leases public space such as museum or convention hall and who should know, because of the nature of the defect, and the length of the lease, that tenant will not repair, is liable for any defects on the premises.
Short term lease of furnished dwelling, Claps
Landlord is liable for any defects that harm tenant.