Leases

Question 1

Lease

Answer 1

a transfer in which the owner of real property conveys exclusive possession to a tenant (generally in exchange for rent).

Question 2

3 Types of Leases

Answer 2

1. Term of Years
2. Periodic Tenancy
3. Tenancy at Will

Question 3

Term of Years

Answer 3

leasehold measured by any fixed period of time.
- automatically ends when the stated term expires.
- Neither party is required to give the other notice of termination
- death of either contracting party does not affect a term of years lease unless the landlord and tenant have agreed otherwise.

Question 4

Periodic Tenancy

Answer 4

a lease for some fixed duration that automatically renews for succeeding periods until either the landlord or tenant gives notice of termination.
- No certain end date

Question 5

Periodic Tenancy Termination

Answer 5

Termination requires one party to give advance notice to the other.

Under the common law, for year-to-year periodic leases (or any periodic lease with a longer initial duration), parties must give notice at least six months before the period ends.

For leases less than a year, the minimum notice equals the length of the lease period.

Additionally, unless the parties arrange to the contrary, the lease must terminate on the final day of a period.

Question 6

HYPO: T signs month-to-month lease on May 1. On August 20, T gives notice of termination to her landlord. When will the lease end?

Answer 6

T must give landlord a minimum of one month’s notice. = September 19

A periodic tenancy must end on the last day of a period. = September 30 (at midnight)

The death of either the landlord or tenant does not end a periodic tenancy.

Question 7

Tenancy at Will

Answer 7

no fixed duration and endures so long as both party’s desire.

Question 8

Tenancy at Will termination

Answer 8

Under the common law, either party could end such a lease at any moment.

Today, most states have enacted statutes that establish minimum notice periods – 30 days is common.

Tenancies at will also terminate if the landlord sells the property, the tenant abandons the unit, or either party dies.

Question 9

Holdovers

Answer 9

Tenants that refuse to move out at the end of their lease are called “hold-overs.”

Question 10

Holdovers Options

Answer 10

1. treat the holdover as a trespasser, bring an eviction proceeding, and sue for damages.
2. tenancy at sufferance

Question 11

tenancy at sufferance

Answer 11

Renews the holdover’s lease for another term. Creates periodic tenancy.

Majority: Some simply copy over the length of the original lease (with a maximum of one year).

Minority: Others divine the repeating period by looking at how the rent was paid.

Question 12

2 Rules of Delivering Possession

Answer 12

1. English Rule (Majority)

OR

2. American Rule (Minority)

Question 13

English Rule

Answer 13

implies a covenant requiring the lessor to put the lessee in possession

• Must provide tenant with actual possession, if he doesn’t, tenant can break lease.
• Tenant may terminate the lease and sue the landlord for damages.
• The tenant can also choose to withhold payment from the landlord until the tenant is able to take possession.

Question 14

American Rule

Answer 14

Recognizes the lessee’s legal right to possession, but implies no such duty upon the lessor as against wrongdoers, are irreconcilable

• Landlord only must provide tenant with the right to possession.
• In contrast, under the American rule, the tenant must bring an eviction action directly against the holdover.

Question 15

Fair Housing Act of 1968

Answer 15

Prohibits discrimination in the renting, selling, advertising, or financing of real estate based on
1. race
2. color
3. national origin
4. religion
5. sex
6. familial status
7. disability.

Exception: They can affirmatively discriminate for handicapped people (first floor rooms, etc.)

“Familial status” means one or more individual (who have not attained the age of 18 years) being domiciled with a parent or another person having legal custody of such individuals.

Question 16

Mrs. Murphy exemption:

Answer 16

If renting/selling a single-family home or apartment complex with 4 units or less, and LL lives in one unit – may discriminate

Note: this exemption does not apply to the subsection that prohibits discriminatory advertising. Thus, although certain categories of landlords are exempted from the statute’s basic framework, they are still not allowed to post discriminatory advertisements.

Question 17

HYPO: You show up to rent an apartment from the Abominable Landlord. He looks you up and down and says, “I don’t rent to your kind.” You think he means he doesn’t rent to Irish because he starts burning a 4-leaf clover and throwing potatoes at you. How do we get the Abominable Landlord out of a lawsuit?

Answer 17

Mrs. Murphy exception.

Question 18

Two FHA Claims can be brought:

Answer 18

1. Disparate Treatment Claims
2. Disparate impact Claims

Question 19

Disparate Treatment Claims

Answer 19

Disparate treatment claims target intentional forms of discrimination, including the refusal to rent based on one of the protected categories.

Question 20

Proving Disparate Treatment

Answer 20

Option 1: A plaintiff can show intent to discriminate with “smoking gun” evidence, such as statements by the landlord that he “would never rent to an Irishman.”

Option 2: Burden-shifting approach that allows plaintiffs to prove intentional discrimination with indirect circumstantial evidence.

The initial burden is on the plaintiff to make a prima facie case of discrimination. In a refusal to rent case, the plaintiff must show that:

(1) she is a member of a class protected by the FHA
(2) that she applied for and was qualified to rent the unit
(3) that she was rejected, and
(4) the unit remained unrented.

Once the plaintiff has established sufficient evidence to state a prima facie case, the burden shifts to the defendant landlord to proffer a legitimate nondiscriminatory reason for the refusal to rent. If the defendant meets this requirement, the burden then shifts back to the tenant to prove that the reason offered is a pretext.

Question 21

Disparate Impact Claims

Answer 21

allege that some seemingly neutral policy has a disproportionately harmful effect on members of a group protected by the FHA

• rely heavily on statistical evidence and employ a very similar burden-shifting methodology as the disparate treatment claims.
• Using statistics, plaintiffs need to show that a defendant’s policy has caused some disparity.
  The defendant then can escape liability if it can show that its actions are necessary to achieve a valid goal.

Question 22

When a landlord believes that a tenant has committed a material breach of the lease, how exactly does she go about removing a lessee from the property?

Answer 22

Common-law rule: a landlord may rightfully use self-help to retake leased premises from a tenant in possession without incurring liability for wrongful eviction provided two conditions are met:

(1) The landlord is legally entitled to possession, such as where a tenant holds over after the lease term or where a tenant breaches a lease containing a reentry clause; and

(2) the landlord’s means of reentry are peaceable.

Modern: In most jurisdictions, statutes mandate that landlords pursue relief through the court system and refrain from self-help remedies.

Question 23

Covenant of Quiet Enjoyment

Answer 23

The basic idea is that the landlord cannot interfere with the tenant’s use of the property.

Common Law: Every lease, whether residential or commercial, contains a covenant of quiet enjoyment.

Rule: “A breach of the covenant of quiet enjoyment occurs when the landlord substantially interferes with the tenant’s use or enjoyment of the premises.”

Question 24

Covenant of Quiet Enjoyment: Substantial

Answer 24

courts generally consider the purpose the premises are leased for, the foreseeability of the problem, the potential duration, and the degree of harm.

Question 25

Covenant of Quiet Enjoyment Remedies

Answer 25

(1) the tenant can always choose to stay in the leased property, continue to pay rent, and sue the landlord for damages. (2) certain violations of the covenant of quiet enjoyment allow the tenant to consider the lease terminated, leave, and stop paying rent.

Question 26

Partial Eviction

Answer 26

If the landlord denies the tenant access to some portion of the rented space (say, and allotted parking space) that constitutes a breach of the covenant of quiet enjoyment.

Question 27

Partial Eviction Remedies

Answer 27

terminate the lease and sue for damages.

Question 28

Actual Eviction

Answer 28

when the tenant is deprived of the occupancy of some part of the demised premises.

Question 29

Constructive Eviction

Answer 29

things are so bad that even though a tenant has not actually been evicted, they are still forced to leave.

Question 30

Constructive Eviction Elements

Answer 30

(1) some act or omission by the landlord Affirmative step can be an act, omissions are only applicable if the LL has a clear duty to do something. (2) substantially interferes with the tenant’s use and enjoyment of the property - What counts as substantial interference? – Crack in the window? (No.) Look at the degree of the harm (how bad?), the potential duration of the thing (ex: construction), foreseeability (did you know?), and ask “For what purpose was the unit leased?” (3) The tenant also needs to notify the landlord about the problem, give the landlord an opportunity to cure the defect, and (4) then vacate the premise within a reasonable amount of time. Some jurisdictions let the tenant stay, but they must continue paying rent while suing for damages. Don’t need to meet each. The difficulty with traditional constructive eviction doctrine is that it forces the tenant to move out of their unit before they sue.

Question 31

Implied Warrant of Habitability

Answer 31

Imposes a duty on landlords to provide residential tenants with a clean, safe, and habitable living space. - Implied warranty of habitability covers all latent and patent defects in the essential facilities of the residential unit.

Question 32

IWoH - Determining Breach

Answer 32

1. See if it’s a major violation of building codes 2. Use a reasonable person standard - Would a reasonable person find it unsuitable for human habitation?

Question 33

IWoH - Remedies

Answer 33

(1) leave, terminate the contract. Tenant may consider the lease terminated and move out. (2) stay and sue for damages. Must pay rent while staying and suing for damages. (3) stay and charge the cost of repair. Tenant may fix the defect and then deduct the cost of repair from the rent. (4) stay and withhold rent. Tenant can withhold the entire rent for violations of the IWH. - This gives the landlord strong incentive to respond to valid complaints from tenants and puts the burden on the landlord (rather than the tenant) to initiate a lawsuit when contested issues arise. If the landlord does move to evict the tenant for non-payment, violations of the IWH can serve as a defense. (5) extreme violations. Tenants have won punitive damages in cases where the landlord committed repeated or gruesome violations of the implied warranty.

Question 34

IWoH Damages

Answer 34

Majority: damages are the agreed rent minus the fair market share. Minority: damages are the value of apartment if it’s up to habitability minus the current rental value.

Question 35

IWoH v. QE

Answer 35

(1) Generally, have to leave in QE, do not under IWH (2) QE can be waived, IWH cannot (3) No punitive damages under QE, punitive damages under IWH (4) Cannot abate rent under QE (unless partial eviction), can under IWH

Question 36

Retaliatory Evictions

Answer 36

landlord may not punish tenants when they exercise legal rights incidental to their tenancy. Generally, this means that a landlord cannot raise the rent, reduce services, refuse to renew a lease, or bring an eviction action for the purpose of retaliating against a tenant who has complained about the condition of the unit, filed a lawsuit concerning the fitness of the unit, contacted a local agency, or exercised rights under the implied warranty of habitability. The landlord can rebut, but the burden is on the landlord to prove it wasn’t done for retaliatory purposes.

Question 37

Landlord Tort Liability

Answer 37

landlords must: (1) exercise reasonable care in keeping common areas safe, (2) use reasonable care when making repairs, and (3) warn tenants about latent defects – unsafe conditions that would not be obvious upon an inspection.

Question 38

If a leasehold doesn’t qualify as either a term of years or periodic tenancy

Answer 38

The law crams it into the tenancy at will box – even if that clearly violates the goals of the parties. (90 year old Effel case)

Question 39

FHA Exemptions

Answer 39

(1) Allows housing designated for older persons to bar families with young children (2) Allows religious organizations and private clubs to give preferences to their own members (3) Mrs. Murphy exemption

Question 40

Landlords may sell their properties to third parties at any time. What happens to a lease if a property is transferred?

Answer 40

As a default rule, when a landlord sells his interest, the purchaser takes subject to any leases. If there are tenants with unexpired term-of-years leases the new landlord cannot evict them. Conversely, the tenants must continue to pay the agreed upon rent to the new owner. If the lease is a periodic tenancy (or tenancy at will), the new landlord may end the leasehold by providing the tenant with the required notice. Until then, the leases continue unabated. Landlords often insert provisions into leases that give them the option to terminate rental agreements upon sale of the property.

Question 41

Tenant Exit: Transfer

Answer 41

The default rule is that a tenant’s interest in a term of years lease or periodic tenancy is also freely transferable. A tenant cannot transfer a tenancy at will to another party.

Question 42

Two Types of Transfer

Answer 42

Assignment Sublease

Question 43

Assignment

Answer 43

the original tenant transfers all of the remaining interest under the lease to a new tenant. If a person who transfers has no further rights in the property, it’s an assignment.

Question 44

Sublease

Answer 44

the original tenant transfers less than all of her remaining right in the unexpired period – the original tenant either gets the unit back at the end of the sublease or reserves a right to cut the sublease short.

Question 45

Sublease vs. Assignment

Answer 45

Primarily, it affects who can benefit from the promises in the original lease and who is on the hook for the obligations. For example, if another person took over the original tenant’s lease, and stops making rent payments, who can the landlord sue?

Question 46

Privity of Contract

Answer 46

Parties are in privity of contract if they have entered a valid contract with each other. The original tenant’s promise to pay the landlord stands until the original lease expires (or until the landlord releases the tenant from this obligation).

Question 47

Privity of estate

Answer 47

Privity of estate makes concrete the medieval belief that an individual assumes a series of rights and obligations when they occupy land owned by another. FOR OUR PURPOSES, privity of estate arises when two parties have successive ownership claims in the same property.

Question 48

Asking two quick questions can help define Privity relationships.

Answer 48

The first step is to ask, “Have any tenants made an assignment of their rights?” If a tenant has assigned their rights, they have no chance of possessing the property again, and thus, cannot stand in privity of estate with anyone (although they may still be in privity of contract with various parities). For all the remaining tenants ask, “Who receives the property when this tenant’s possessory rights finally end?” Remember, parties with successive interests have privity of estate. Whenever a landlord initially leases to a tenant the two parties are in both privity of contract and privity of estate.

Question 49

When the original tenant subleases or assigns his leasehold, the default rule is that the landlord and the new tenant are not in privity of contract. It is possible, however, to create a privity of contract relationship.

Answer 49

Most often this is accomplished by including a clause in the takeover agreement between the original tenant and the new tenant that reads, “New Tenant assumes the obligation to perform all of the original tenant’s duties under the original lease.” If the new tenant takes on this responsibility, the landlord becomes a third-party beneficiary to the agreement and comes into privity of contract with the new tenant – only matters for a sublease.

Question 50

Limiting Tenant's Right to Transfer

Answer 50

Modern courts continue to recognize the alienability of tenancies as a default position but allow parties to contract around the basic rule. As a result, most leases now contain some restriction on a tenant’s ability to assign or sublease her property rights. Reasonable restraints are acceptable, more controversial are clauses that allow sublease or assignment but only “with the consent of the landlord.”

Question 51

Julian Rule (minority but modern)

Answer 51

landlord’s consent to alienation by the tenant cannot be withheld unreasonably unless a freely negotiated provision in the lease gives the landlord an absolute right to withhold consent.

Question 52

Reasonableness factors

Answer 52

(1) the sublessee’s credit history, (2) the sublessee’s capital on hand, (3) whether the sublessee’s business is compatible with landlord’s other properties, (4) whether the sublessee’s business will compete with those of the lessor or any other lessee, (5) the sublessee’s expertise and business plan.

Question 53

Surrender

Answer 53

A tenant can always ask her landlord to terminate the lease before the term ends. The tenant generally agrees to turn over the property and pay a small fee and, in return, the landlord releases the tenant from all further obligations.

Question 54

Eviction Rule

Answer 54

Common-law rule: a landlord may rightfully use self-help to retake leased premises from a tenant in possession without incurring liability for wrongful eviction provided two conditions are met: (1) The landlord is legally entitled to possession, such as where a tenant holds over after the lease term or where a tenant breaches a lease containing a reentry clause; and (2) the landlord’s means of reentry are peaceable. Modern: In most jurisdictions, statutes mandate that landlords pursue relief through the court system and refrain from self-help remedies.

Question 55

QE Remedies:

Answer 55

(1) the tenant can always choose to stay in the leased property, continue to pay rent, and sue the landlord for damages. (2) certain violations of the covenant of quiet enjoyment allow the tenant to consider the lease terminated, leave, and stop paying rent.

Question 56

QE applies to

Answer 56

Residential and Commercial

Question 57

LL's Four Duties

Answer 57

(1) Provide possession (2) Follow the terms of the lease (3) Honor the tenant’s right to quiet enjoyment (4) Honor the tenant’s implied warranty of habitability

Question 58

IWoH applies to

Answer 58

Residential

Question 59

Nuisance

Answer 59

if I use my property in a way that unreasonably interferes with your use and enjoyment of your land, you can sue me.

Question 60

A plaintiff in a private nuisance case must show the defendant’s conduct was

Answer 60

(1) intentional, (2) unreasonable, and (3) substantial interference with the use and enjoyment of another’s property.

Question 61

Nuisance: Intentional

Answer 61

Interpreted quite broadly. The intent necessary to commit nuisance is the intent to do the act, not intent to interfere with the use and enjoyment of another’s property. Knew or should have know that their actions would ensure a cost (ex: Clowney’s pig problem)

Question 62

Nuisance: Unreasonable

Answer 62

The “unreasonableness” of the defendant’s conduct is often the dispositive issue. If the defendant’s behavior crosses a certain threshold, the conduct is legally sanctionable. Courts examine: (1) the character of the harm (2) the extent of the harm (3) the character of the locality where the harm occurred (4) the temporal priority of the parties (who was there first) (5) social utility of the defendant’s conduct Reasonableness reflects the idea that occasionally, you’ll have to put up with a neighbor who is doing something annoying (ex: construction).

Question 63

Nuisance: Substantial

Answer 63

The harms complained about must be strongly annoying or seriously offensive. There is no liability for trivial interference with the property rights of another and the law does not protect eggshell plaintiffs.

Question 64

Can aesthetic be a nuisance?

Answer 64

No, unless done out of spite

Question 65

Nuisance Remedy

Answer 65

The ongoing harm of the nuisance suggests equitable relief, as damages for past harms would not address those that would follow if the nuisance continued. A nuisance remedy is usually the remedy plus the injunction.

Question 66

Boomer v. Atlantic

Answer 66

This case is famous because the court finds nuisance and gives the plaintiffs damages for the harm the nuisance has already caused AND future damages the neighbors will experience