Landlord and Tenant - Dependent and Independent Covenants Flashcards
(41 cards)
1
Q
Entity Property
A
- forms of property that allow for specialization of function
- management vs. possession - landlord/tenant, common interest communities
- management vs. beneficial interest - trusts
2
Q
Types of Leases
A
- term of years
- periodic tenancy
- tenancy at will
- tenancy at sufferance
- note that if the “end date” of your lease is the duration of an indefinite time period (ex: for the duration of the war in the example) this is a numerus clausus violation
3
Q
Term of Years
A
- terminates at a point in time predetermined in the lease
- can be for any time period so long as maximum duration is definite enough
- no notice required for termination
4
Q
Periodic Tenancy
A
- fixed duration that continues until notice given
- rolls over automatically from one time period to the next, unless one of the parties gives advance notice of termination
- under common law, 6 months notice required for year-to-year lease
5
Q
Tenancy at Will
A
- no fixed term
- continues indefinitely
- either landlord or tenant can terminate (modern form includes notice requirement)
6
Q
Tenancy at Sufferance
A
- created when tenant holds over after the termination of the lease
- tenant has greater rights than a trespasser but subject to eviction by whatever procedures the law allows
7
Q
Two Models of Landlord Tenant Law
A
- property/conveyance - independent covenants (if one is broken, that does not mean the other party no longer has an obligation to fulfill the others)
- contract - mutually dependent covenants
8
Q
Paradine v. Jane - Facts
A
- L leases agricultural land to T for a term of yrs at an apparently fixed rent, payable quarterly
- T is three years behind in rent -> L sues to recover unpaid rent
- T says has been ousted by Prince Rupert (“alien army”) + hasn’t been able to earn income from the land
9
Q
Paradine v. Jane - Decision + Significance
A
- court says T owes rent - T bears the risk of being ousted, not L
- under this traditional model, allocation of risk entirely on tenant - both windfall gains and wipeout losses
- reflects independent covenants
10
Q
Forfeiture Under Independent Covenants Model
A
- forfeiture wasn’t automatic - you don’t automatically get kicked out if you don’t pay rent
11
Q
Forfeiture Clauses
A
- landlords started adding these in to lease to resolve forfeiture issue - said if tenant violated enumerated clauses in the lease, tenant’s interest in the lease immediately forfeited
- means certain covenants are dependent when landlord wants to invoke, but tenant can’t get benefit
12
Q
Blackett v. Olanoff - Set-Up of Situation
A
- landlords rent apartments to residential tenants + also lease commercial space in another building nearby to bar or cocktail lounge
- there’s a clause in the commercial lease that the lounge will keep the noise down so can’t be heard outside the lounge, but lounge still plays super loud music + evidence of noise from patrons fighting
13
Q
Blackett v. Olanoff - Facts
A
- residential tenants repeatedly ask landlords to control the noise from the lounge -> landlords periodically complain to the lounge tenants + noise abates, but then returns
- tenants vacate -> landlords sue for unpaid rent -> Ts claim constructive eviction
14
Q
Blackett v. Olanoff - Decision + Standard
A
- court finds constructive eviction
- Constructive eviction = defense to a claim for rent that builds on the common-law rule regarding actual eviction -> says you don’t owe rent if landlord performs some action/fails to perform some action which has consequences analogous to actual eviction
15
Q
Blackett v. Olanoff - Reasoning
A
- landlords try to argue they’re not chargeable w/ or responsible for conduct of lounge tenants - court disagrees -> says natural + probable consequence of their action in permitting the lounge to operate where it did + landlords could control the actions of the lounge but failed to do so-> thus not entitled to collect rent from premises that weren’t reasonably habitable
16
Q
Rule Regarding of Tenant Nuisance
A
- given in Blackett v. Olanoff
- where landlord has the power to control the offending conduct of one tenant, + where failure to control such conduct will foreseeably injure another tenant, common law rule that landlord not responsible for nuisance of one tenant against another doesn’t apply
17
Q
Quiet Enjoyment
A
- most important covenant on landlord’s part
- must not interfere w/ tenant’s possession during the term of the lease
18
Q
Medico Dental Building Co. v. Horton and Converse - Set-Up
A
- Medico Dental Building = multi-story commercial building in LA dedicated to medical and dental offices
- tenant, Horton and Converse = drug store that rents space on the first floor
- drug store’s lease has a clause that landlord won’t lease any other part of the building to a drug store or another tenant for the purpose of “selling drugs or ampoules”
- three yrs. into lease, landlord rents 9th floor to Dr. Boonshaft -> operates a clinic, patients pay monthly fee + can receive drugs at no additional charge
19
Q
Medico Dental - Dr. Boonshaft
A
- Dr. Boonshaft’s lease says he promises not to operate a drug store or to distribute drugs to patients “except in connection w/ regular course of treatment of lessee’s own patient”
- his lease also mentions the lease to H & C and promises not to do anything that would conflict w/ that lease
- Dr. B initially obtains drugs from H & C, but then wants to buy wholesale and save sales tax -> purchases from a different H & C
20
Q
Medico Dental - Immediate Circumstances Prior to Suit
A
- H&C writes letter to landlord, demanding put a stop to Dr. B’s distribution of drugs
- landlord promises to see “what arrangements could be made” but landlord’s attorney later calls to say Dr. B won’t stop
- drugstore says it will vacate - landlord advises “use your own judgment about that” -> drugstore vacates + landlord sues for rent
21
Q
Medico Dental Building - Holding + Standard
A
- court decides in favor of the drug-store
Court says that tenant who has suffered a substantial breach of the material covenant has three remedial options: - can rescind the lease and be released of any further obligation to pay rent (what H&C did)
- can remain in possession and sue for damages for loss in profits suffered by reason of the breach
- can rescind, putting an end to the contract prospectively, + sue for damages suffered up to the time of rescission
22
Q
Four Groups of States Today on Commercial Leases
A
- Group 1 (TX, UT) implies a warranty of fitness into commercial leases, analogous to IWH
- Group 2 (Mass) adopts position that all lease clauses are dependent
- Group 3 (majority) adopts rule that material clauses are dependent, nonmaterial clauses are independent
- Group 4 - adopts position that all clauses except quiet possession are independent + tenant remedies are based on constructive eviction
23
Q
Implied Warranty of Habitability
A
- where it applies, IWH = more important than the covenant of quiet enjoyment
- strengthens tenants’ rights beyond constructive eviction (useful b/c w/ constructive eviction, you had to move out before even knowing whether or not you’d won the case - here, you can withhold rent w/o moving out)
24
Q
Illegal Lease Doctrine
A
- recognized by DC courts prior to IWH
- focused on violations in existence at the time the lease is executed (making the lease an “illegal contract”)
- problem: if it’s an illegal contract, your lease is void and you get evicted
25
Javins v. First National Realty Corp. - Facts
- tenants did not pay their rent for month of April -> landlord sued
- tenants defend by alleging the premises are subject to 1,500 Housing Code violations (their "offer of proof" goes only to violations that arose after their tenancies commenced - didn't want illegal lease doctrine)
26
Javins v. First National Realty Corp. - Decision
- DC Circuit adopts the IWH - held that (substantial) housing code violations arising during the tenancy violate a warranty implied mandatorily into every lease + so give rise to remedies for breach of contract (means there's a counterclaim to landlord's rent claim)
27
Javins - Reasoning
- tenant lack of bargaining power
- tenant's need to rely on skill + honesty of landlord
- housing shortage
- impediments to competition in rental housing market
- racial and class discrimination
- standardized form leases
28
Why make the IWH mandatory vs. default that you could contract around?
- asymmetric information (landlord typically knows more than tenant about property, requirements of the law, + meaning of lease provisions)
- unequal bargaining power
29
Question of Impact of IWH on Low-Income Tenants
- if IWH increases quality of housing, demand may increase + rents may increase
- supply may also decline, if landlords find it too costly to comply w/ IWH (conversions to condos or abandonment) - might also cause increase in rents
- idea is that improvement in the quality of housing might not actually be worth more to low-income tenants than the higher rents they need to pay
30
Doctrine of retaliatory eviction
- landlord can't evict tenant out of retaliation for tenant reporting code violations
31
Sommer v. Kridel - Facts
- Kridel enters into two-year lease w/ Sommer, owner of apt building
- rent is $345 per month + Kridel pays $690 (half for first month, half as security deposit)
- Kridel's marriage gets called off + parents who were going to help pay the rent now won't-> writes to landlord asking to be released from lease
- Sommer doesn't respond + turns away someone else interested in renting the apt. -> finally rents it out 16 months later
- Sommer sues for full 16 months of rent + security deposit (ignored the deposit Kridel made)
32
Sommer v. Kridel - Holding
- landlord has a duty to mitigate damages - need to make a reasonable effort to mitigate (+ landlord has the burden of showing reasonable diligence)
- if landlord doesn't attempt to mitigate, can't recover damages
33
Sublease - Basic Principle
- landlord starts w/ fee simple, then carves out lease, then tenant carves out sublease, etc. (basically a nesting doll situation)
- tenant doesn't transfer entirety of remaining interest, instead retains some element for self
34
Sublease - Responsibilities
- prime tenant remains liable to landlord under privity of contract
- subtenant only liable to tenant - no privity of estate w/ landlord (if subtenant fails to pay rent, landlord goes to original tenant - can't collect anything from subtenant directly)
35
Assignment vs. Sublease
- "English" rule - distinction turns solely on whether there's any kind of reversion retained upon transfer of tenant's interest (if reversion, then sublease)
- American rule - tracks the parties' intent (ex: did they intend for T2 to deal directly w/ landlord? who is T2 writing checks to?)
36
Assignment - Basic Principle
- tenant transfers entire remaining interest in the lease to a third party
- new tenant steps into shoes of the original tenant
37
Assignment - Privity
- old tenant has privity of contract
- new tenant has privity of estate (means new tenant must perform all obligations of the original lease that touch and concern the land)
- since old tenant still in privity of contract, old tenant is still technically liable for the rent
38
Kendall v. Ernest Pestana Inc - Lease Arrangement Pre-Suit
- Lots of people involved in leasing + assigning of hangar space at San Jose Municipal Airport – basically, you start out w/ City of San Jose leasing it to the Perlitches, and the Perlitches then sublease it to Robert Bixler
- But after this sublease, the Perlitches assign their interest in the property to Ernest Pestana, Inc., who basically then steps into their shoes as the lessee and subleasor
39
Kendall v. Ernest Pestana - Facts
- Bixler runs airplane maintenance business in the space -> wants to sell business (including existing lease) to Kendall + 2 other applicants
- Bixler's lease says he can't assign his interest to someone else w/o consent from lessor
- Pestana refuses consent, despite fact that Kendall + others had stronger financial statement + greater net worth than Bixler + were willing to be bound by the terms of the lease (implied that Pestana trying to impose higher rent + more onerous terms)
40
Kendall - Procedural Posture
- proposed assignees brought suit for declaratory + injunctive relief + damages
- sought declaration that Pestana's refusal = unreasonable + unlawful restraint on alienation -> trial court shuts this down (older rule said unless there was something in the contract saying otherwise, he could refuse his consent arbitrarily)
41
Kendall - Holding
- where a lease provides for assignment only w/ prior consent of lessor, consent may be withheld only where lessor has a commercially reasonable objection to the assignment, even if lease doesn't have a provision specifically stating that assignment can't be unreasonably withheld
