PROPERTY II OUTLINE (midterm: Read Ernst v. Conditt!!) I. The Landlord and Tenant Relationship a.

Lease:(nonfreehold estate) agreement where owner of the prop (the lessor) contracts to grant a lessee exclusive possession of specific real or personal prop. i. Both a contract & conveyance: a lease transfers a possessory interest in land, so it is a conveyance that creates prop rights. ii. Leases usually contain a number of promises: promise to pay rent, promise to the landlord to provide utilities thus creating contract rights 1. A lease contemplates a continuing relationship b/w landlord & tenant 2. Typically, landlords use form leases- standardized documents offered to all tenants on a take-it or leave-it basis, w/no negotiation over terms. b. The Statute of Frauds: leases for more than one year must be in writing; Types of Leases: (4) term of years, periodic tenancy, tenancy at will, and tenancy at sufferance (all involve a landlord tenant relationship) a. Tenancy for Years: any estate/tenancy arising from a lease or rental agreement for a fixed period of time. Beginning and end dates must be fixed (doesnt have to be a calendar date), thus no addtl notice of termination need be given by either party. On the last day the tenancy ends, and the tenant must vacate the premises. (usually for non-residential leases) i. *When the term ends, the reversion holder takes back possession. (landlord) ii. Does not automatically renew iii. can be made defeasible which means that it can be terminated upon a stated event does not apply to residential apartments iv. if fits criteria for SOF then it must be in writing b. Periodic Tenancy: once which continues from one period to the next automatically, unless either party terminates it at the end of a period by proper notice i.e. month to month, year to year. i. Death does not affect tenancy for either L or T ii. Can be implied1. Holdover: lease ends and T continues paying rent & L accepts rent 2. Rent Payment: a lease w/no stated duration but with no end period yet rent is paid on monthly basis iii. Can be expressed if its written in lease iv. Routine of payment can establish periodic tenancy if monthly = Periodic if sporadic (i.e payments made every few years)= tenancy by will v. Will automatically be renewed for a further period unless one party gives valid notice of termination recvd. vi. Maximum notice given is 6mths vii. Common Law: notice is half of what the tenancy is for ex.) 6mths notice needed to terminate a year to year tenancy and a full periods notice needed for anything less end period must be set as termination date- notice period equal to one interval/anything not illegal can be negotiated.. notice period can be negotiated viii. Modern Law: most states require only 30 days notice for any tenancy c. Tenancy at Will: tenancy which has no stated duration terminated at any time by either party lasts as long as landlord or tenant desire does not need to be in writing b/c it cld be terminated. Ex. Gpa leased farm to someone and it is common knowledge that X is using family farm i. Usually one lump sum payment per year for the property BUT if you had an annual rent of $25K but you pay 2100 per month = now you have created a periodic tenancy.. Common law: does not require notice (may be given immediately/implicitly); absent a statute/written in lease ii. Modern Law requires notice of a reasonable time (i.e. 30days) unless specifically stated in your jurisdiction

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iii. Lease may say it is a tenancy at will iv. When T starts giving rent on a regular consistent basis=converted into a periodic tenancy v. Must keep payments sporadic to keep lease under tenancy at will. d. Tenancy at Sufferance tenant holds over- remains on lease premises at the end of valid lease. LL has the right of election , 3(options) 1) sue to eject T 2) Consent and enter into a new lease 3) do nothing and continue to collect the rent = usually subj to same terms as to the original lease i. Holdover as Renewing Lease: periodic tenancy is thus created if LL elects to hold the tenant to another term. The length of the period is determined by the way rent was computed under the lease that was terminated. Landlords Duty to deliver possession :Tenants Right of Possession a. Upon signing lease, tenants gain rights of possession and enjoyment. Whether the tenant has actual or legal or both depends on whats stated in the lease OR if silent in the lease, the view the court subscribes to. b. American Rule: the LL has a duty to deliver only legal possession not actual i. T owes rent/cant terminate/cant recover for breach its Ts duty to oust prior T and cannot resort to Self-help c. English Rule: (Majority View) LL has a duty to deliver both actual and legal possession : T does not owe rent otherwise/can terminate lease/can recover for breach i. Tenant has right to terminate lease for breach if prior tenant holdsover and LL does not oust him. OR ii. Tenant may continue lease and get dmgs for the period until prior tenant is removed. Assignment & Sublease a. if lease doesnt prohibit it, T has right to transfer rights to lease b. L must consent to transfer and denial of transfer must be reasonable c. T may be released from lease either in writing or orally. d. 2 Distinct types of tenant transfers: Assignments and Subleases i. Assignment: 1. Question 1: was there an assignment? 2. Question 2: was there an assumption by the assignee (to assume obligations under the lease = liab to L = assignee is in PK & PE w/LL) 3. Question 3: Was there a release of Original T a. If yes = T is no longer in PK w/L b. If no = T remains in PK w/L 4. There can be an assignment w/o an assumption 5. There can be an assignment w/an assumption and no release 6. There can be an assignment w/an assumption and a release. 7. If Original T is released and assignee did not assume liab but defaults.. L may go after assignee b/c of PE. 8. Assignee may call L b/c of PE if anything needed. 9. If original T transfers prop. for the entire remaining period of the lease, the transfer is an assignment (3rd party called assignee) a. Common issue: who is liable if the assignee does not pay rent? The original tenant always remains liable on the lease because he/she is in PK w/L unless she has been released from obligations of the lease. b. Generally, the assignee of the original lessee can be held liab for rent due for the period of time he was actually in possession and not for breaches by original lessee or subsequent assignee. c. PK b/w Assignee and LL if: When Assignee personally assumes the resp of the lease. d. Covenant to pay rent does fall under privity of estate e. Assignee has PE w/L. Assignee is resp for all provisions/terms of lease

f. Ernst v. Conditt Still assignment although T1 defaulted, T remained liab ii. Sublease: 1. If original tenant retains interest in premises, transfer from tenant to 3rd party is sublease/even if 1 day is left (3rd party called sublessee) 2. A sublessee does not have PE. Sublessee can have PK w/L if : Sublessee has expressly assumed liable to L OR sublease is enforceable as a 3rd party beneficiary 3. Sublessee is not liab to lessor even on covenants running w/land. 4. Sublessee does not pay rent to L but to original T b/c Sub does not have relationship w/L. 5. L will not answer to Subs demands on repairs etc. Sub must call original T for issues on land e. Elements of Tenant Transfers: Privity of Contract and Privity of Estate i. Privity of Contract: 1. Relationship to the lease agreement itself 2. Exists b/w LL & T, but not b/w LL & Ts assignee or Ts sublessee. 3. 3rd party beneficiary: allows someone not in PK to gain benefits of contract as it has been executed likely that the contract was written for 3rd party. ( i.e. I get apt for grandma who is not listed on K Grandma can still sue b/c intent of lease is for 3rd party, if proven to be true.) a. Can only sue for breach or reliance on a contract if they can prove that they are the 3rd party beneficiary. ii. Privity of Estate: 1. Created by the physical possession of the premises 2. Created b/c when a tenant transferred her leasehold to a third party (assignee) and the landlord wanted to collect rent from the assignee, who was not a part to the original lease.. not in privity of contract w/the landlord..the courts created privity of estate. 3. Exists b/w a LL & a T and a LL & a Ts assignee, but not b/w LL and a Ts sublessee (b/c T is still bound to lease) iii. Note: LL can sue for back rent a tenant who subleased b/c of PoC iv. Note: LL can sue Ts assignee for rent b/c of PoE..liab for performances under the lease whose burden runs with the land (Ts assignee took physical possession of land) f. Note: LL can have 1 recovery to satisfy rent g. Chart: RULE BLOCK i. Tenant: A T in an assignment is no longer in PE w/L; however, the T is in PK w/L unless the L expressly releases the original T or ts release is implied. The release can be implied thru a novation. A novation is a new contract. ii. The Tenant is in PE w/the L for a sublease and they are also PK w/L unless; the L expressly releases the original T or ts release is implied. The release can be implied thru a novation. The Landlords Duty to Deliver Possession (look @ lease for duty owed) a. Duty: * to deliver possession of the premises; * to satisfy the covenant of quiet enjoyment (So long as the tenant is complying w/terms of the lease they have the right to enjoy the leased premises); * (in residential leases) to satisfy the implied warranty of habitability ( in nonresidential lease turn to the lease terms); *to refrain from breaching the doctrine of retaliatory eviction: tenant blows whistle on LL for something the LL is doing/fails to do LL cannot turn around and evict T for being a whistle blower OR else LL better be able to show that they have evicted Ts for similar reasons i.e. failure to pay rent on time.. b. Public Policy: Does L have duty to mitigate? i. Common Law No

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ii. Modern Law- yes by attempting to find a suitable replacement tenant. Landlords Remedies (for defaulting tenants): (4) a. Security Deposits Once lease terminates, L must return deposit to T after subtracting for any dmgs. b. Acceleration Clauses- most leases have acceleration of rent clause by which if T fails to pay rent promptly, L may require that all the rent for the rest of lease term is payable at once. If L demands this, he cannot also demand possession of premises. c. Eviction L has right to terminate lease if T fails to pay rent or violates any other provision. Ts breach must be material to use this remedy. i. Majority: If L is entitled to terminate lease and regain possession OR if T holdsover at the end of the lease term and L wants T out L may do so by summary proceedings. Summary Proceedings provides for a speedy trial of Ls right to immediate possession = to evict T but L must give T notice of default to give T time to fix default. This limits defenses that T may assert i.e. Implied Warranty of Habitablity (livable, repairs) ii. Under no circumstance can L forcibly remove the T to bar T from possession absent of a court order (Self help) iii. Minority: Self- Help: it must be peaceful more than non-violent must have legal right to do so. d. Dmgs for holdovers If T holdsover after lease terminates, L is entitled for dmgs as well as eviction Tenant Abandons Prop: a. L has 3 otpions: 1)accept Ts surrender of premises & resp for paying rent ( L shld get surrender in writing); if remaining period of time on unexpired portion of lease exceeds a year it is reqd under SOF to get it in writing. 2) ignore abandonment and let rent accrue as though T was still there & then sue for all of the accrued rent 3)L can relet premises on Tenants acct. b. L has duty to mitigate - a contractual principle that says that a non defaulting party to a contract has a duty to minimize dmgs by a defaulting party i. Duty arises as soon as there is a default! Nonetheless, L can allow rent to accrue as long as L is attempting to place another T in that space no other way to mitigate dmgs Tenant has right of quiet enjoyment of premises the right to quietly enjoy that leased premises so long as you the T are complying w/terms of the leaseL has the duty to not disturb you or any superior title to disturb T. Whether explicit/implied this is present in both residential/commercial i. Common Law: no habitability aspect of quiet enjoyment breached only when T deprived use of premise and full enjoyment included in terms of lease 1. Exceptions to NO landlord duty rule to provide a suitable premises a. Short term leases of furnished dwellings: there was an implied duty to keep premises habitable. b. Duty to disclose latent defects if known c. Maintain common area used by tenants (applies to both common &modern law) d. To undertake carefully any repairs L promised to make (i.e. L promises to fix something he must do so the right way e. Abstain from any fraudulent representation of premises ( place has mold and L denies it) f. Abate from immoral conduct and other nuisances if it affects the prop.( cannot place strip joint next door to a daycare) ii. Modern Implied in all residential leases Implied Warranty of habitability livable/habitable residential premisesdoes not apply to commercial iii. Paramount Title: LL impliedly warrants that he has legal power to give possession to a tenant for the term of the lease. BUT if someone else successfully asserts a claim to the prop which is superior to the tenants claim under the lease LL has breached this warranty.

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1. T may only terminate lease if evicted by superior person iv. Constructive Eviction: if Ts right to quiet enjoyment *T cannot constructively evict himself can only do so in response to Ls failure to do something the substantial interference of enjoyment /usage (excessive noise/terrible orders) of premises, T may terminate lease. T is not entitled to terminate/stop paying rent unless he abandons property. a. Elements: i. an intentional act (actual or inferred acts) of L that breaches a duty owed to T (i.e. always calling L for repairs & L ignores calls=inferred intentional acts) ii. L is cause of the interference that must be substantial and the interference is that the T enjoyment of the premises or renders it unfit for purpose of which it was leased. iii. T must provide notice to L to provide cure for breach iv. T must vacate premises cannot stay if L fails to provide cure v. T must evict w/in reasonable time after Ls actions Tenants Duties: (look @ lease for duty owed) i. *Duty to pay rent- if T fails to pay rent and departs from premises refer to Ls duties; ii. * Duty to repair( Common Law T has implied duty to make minor repairs subject to ordinary wear & tear..also look @ what lease says. Modern Law- L has that duty under Implied Warranty of Habitability; iii. * Duty to refrain from committing waste ( any1 who has a future interest in the land (i.e. LL who holds a reversion) may bring about an action for waste- Ameliorative (good waste; T is not allowed to improve value of prop) v. Permissive- T is not allowed to neglect premises or Affirmative- T cannot attempt to take fixtures of land that dmgs value of property) iv. * Duty involving fixtures on Property (Fixtures-an item of personal prop which is attached to the land, that T is usually allowed to attach if it will not affect the value of Ls reversion) v. * Duty to behave reasonable (in use of premises must obey reasonable regulations posted by L, must not unreasonably disturb other Ts) vi. Tenants Self- help not allowed; Tenants use of Summary Proceedings Condition of Premises: i. Common Law: T takes premises As Is. L is not deemed to make any implied warranties that the premises are fit/habitable/make any repairs. Even if L warrants that premises are habitable and it is not, T can rely on constructive eviction after first leaving premises/or sue for dmgs. ii. Modern Law Implied Warranty of habitability, if L breaches this, T may withhold rent and use it to make repairs. But if T knew about latent defect- then T waived the defect so the implied warranty of habitability does not apply to that defect. Only if T had reason to know about defect. Most do not extend this warranty to commercial leases. iii. Successful Warranty of Habitability Claim: 1. L must have notice of defective condition 2. Defect must be substantial: ( look @ totality of circumstances) a. To consider the violation in regards to the housing code to that area b. The effect of Ts health & safety c. Length of time that defect has existed d. Its seriousness 3. L must have had reasonable time to repair and not done so. 4. Remedies: a. T may withhold rent until necessary repairs are made

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b. T may sue L to collect dmgs c. Minority: some jurisdictions T may repair condition himself and deduct the reasonable costs from his next rent payment d. L cannot evict T for a T who pursues dmgs or withholds rent based on Implied Warranty of Habitability iv. Doctrine Retaliatory Eviction: L usually may not terminate a periodic lease or deny Ts request for a new lease at the conclusion of a tenancy for years on account of Ts assertion of the right to habitable premises a. Majority: Applied where L tries to terminate the tenancy in retaliation for Ts complaints made to a housing authority about code violations b. Minority: Applied non renewal or termination is in retaliation for Ts withholding of rent or joining in a tenants organization. Premises Liability of Landlords i. Latent defects: any defect that takes time to appear and is sometimes unk to both L and T where ii. Once disclosed-either before, at, or after delivery to T-LLs responsibility to T ends Midterm Analysis: 2 covenants: quiet enjoyment & paying rent a. Look at pg.504 Tort Liability: premises are in state of disrepair or one of Ts visitors are injured or theres some dmg If T is inj /dmged was it in premises OR common areas i. If Invitee was inj/dmged- was it in premises or common area ( i.e. parking lot/elevator etc) Objective Subjective