Property Practice Exam

Instructions:
Read the following fact pattern, and answer the question. Give yourself 60 minutes to complete
this exam. Do not go over the time limit.

We recommend that you take this exam only after you have completed your study of Landlord-
Tenant issues. If necessary, review the Property Rules of Law before starting this exam.

Once you have completed the practice exam in the time allotted, then compare your answer with
this Property Sample Answer.

Property Fact Pattern

Theresa was about to start her first year of law school in a new city. While visiting the school in
June, she entered into a one-year lease for an apartment with Larry, a landlord. The lease stated
that rent was to start on September 1 and that rent of $500 was due at the first of each month.

Theresa showed up at the apartment on September 1, having already paid the first month's rent,
with a rental truck loaded with her furniture but she was unable to move in because Harry was
still living there. Theresa immediately called Larry and informed him of the situation. Larry said,
"It's not my problem." Theresa checked into a motel and kept her furniture in the rental truck
incurring additional charges on the rental truck. Two weeks later, Harry moved out of the
apartment, and Theresa moved into the apartment on September 15.

On October 15 just as the weather began to turn cold, L turned off the heat and hot water to the
apartment because T had not paid her rent on October 1. T insisted that L owed her for the two
weeks in September that she was unable to live in the apartment. On investigating the lack of hot
water, T noticed that the roof leaked. She did not inform L about the leak. T had to pay for a gym
membership to take a hot shower every day.

On November 15, Theresa had become disgusted with the cold water and moved out of the
apartment without ever having paid October or November rent. She immediately informed Larry
of her reasons. Larry didn't do anything until December 1 when he finally inspected the
apartment and discovered the leak. During the period of November 15 to December 1, there had
been substantial rains and the leak caused considerable damage to the apartment. Larry fixed the
leak and hot water, and put a one-line ad on the Internet looking for a tenant. The ad cost Larry
$10. No one rented the apartment until February 1.

Question: What are the rights and obligations of both the Landlord and the Tenant?

Property Sample Answer

The following is a sample answer to the Property Practice Exam. If you have not already done
so, take the exam and then compare your answer to this sample. If necessary, you can also
review the Property Rules of Law for this exam. Since law school professors vary in what they
consider excellent work, this answer is only presented as a sample.

The rights and responsibilities of the two parties can be best understood by breaking them into
three periods of time.

From Date that Lease Term Begins to Date Tenant Begins Occupancy
(September 1 to September 15)

The primary issue is whether Larry (L) had a duty to deliver actual possession of the property to
Theresa (T). The applicable rule depends on the jurisdiction. The majority view is that the
landlord must deliver the premises to the tenant at the beginning of the leasehold term. Failure to
do so means that the landlord is in breach. Under the majority view, L had a duty to evict H in
order for T to gain possession. Since the holdover tenant, Harry (H), prevented T from gaining
possession, L would be in breach of the lease and be liable to T for the cost of the motel and
other reasonable expenses such as the cost of rental van during the two weeks she did not occupy
the apartment.

The minority view is that it is up to T to evict H to gain possession. Consequently, under this
view, T is liable to L for rent even though she cannot occupy the apartment. L has no liability or
duty to T under this rule.

From Date Tenant Begins Occupancy to Date Tenant Abandons Premises

(September 15 to November 15)

The issue is whether L's affirmative act of turning off the hot water and heat in retaliation for T's
failure to pay was either a constructive eviction or a breach of the warranty of habitability
sufficient to relieve T of her duties under the lease.

T has a duty to pay rent under the lease. Even though L may have been liable for two weeks
worth of living expenses in September, T would probably have to seek a judgement in a court of
law to get those expenses. Since T did not pay rent on October 1, L's remedy under the common
law is to sue for the rental payment. Under the more modern view, L could sue for both the
amount of rent due and to evict T. T owed L $500 on October 1 and another $500 on November
1. However, those duties may be mitigated by L's failure to provide necessary services.

However, under all leases there is an implied covenant of quiet enjoyment. The landlord can
engage in no act that prevents the tenant from quietly enjoying her tenancy. Thus, the landlord
must provide for services that make the residential property habitable. Alternatively T also has a
theory to limit her liability for rent under the implied warranty of habitability.

Under the quiet enjoyment theory, T will argue that a constructive eviction occurred. T can argue
that she can properly terminate the lease and seek damages (at very least, the cost of the gym
membership to take the shower) because the landlord acted to make the premises uninhabitable
by turning off the heat and hot water. In a cold climate, turning off the heat and hot water is
considered by most reasonable people to make the apartment uninhabitable.

However, L can argue that since T stayed in the apartment for a month, she did not vacate within
a reasonable time and therefore waived her right to terminate the lease. He will further argue that
proof of her being bale to take a shower at the gym goes to show that the premises were not
uninhabitable. L can also argue that changing the condition was in the hands of T. She could
have had hot water and heat merely by paying her rent. This argument will probably not hold up
under close scrutiny. One month is not a long period of time given the circumstances. With
winter approaching and the coldest weather still ahead, T could argue that she waited a month
because she felt that she might be able to reason with L to turn on the heat and that she only
moved once it became clear that redress was not available. Consequently, T can probably
terminate the lease and seek damages for the cost of her showers at the gym and the loss of quiet
enjoyment of the property during the period she went without heat or hot water (October 15 to
November 15).

If T does not prevail under a constructive eviction theory, she can alternatively pursue redress
under the theory of implied warranty of habitability, which gives a broader footing to tenants.
Under this view, L had a duty to maintain the apartment in a habitable state. The standard is
usually the same as the local housing code. To the extent that the jurisdiction requires hot water
and heat, T has rights and can seek a remedy for breach of those rights. T can either move out
and terminate the lease or reduce or abate the rent to an amount that is equal to the fair market
value of the apartment without heat or hot water. Since T moved out, she might seek an offset of
the rent she owed for the period of October 15 through November 15.

During this time period, however, T had a duty to report the leaky roof to L. Under the doctrine
of waste, T had a duty to prevent permissive waste. Most leases do not require tenants to make
substantial repairs, such as repairing roofs. However, T did have a duty to report the leaky roof.
Her failure to do so made her liable for any subsequent damage but not for the cost of repair. To
the extent that T was still under the lease when the damage was done, she will be liable to L for
any of that damage. T will argue that the substantial damage was done after the lease was
terminated on November 15. To the extent that her theory survives, she will not be liable.

From Date Tenant Abandons Premises to End of Lease Term

(November 15 to August 31)

If T prevails under either of the above theories, then she does not owe L rent for any time after
she abandoned the premises on November 15.
If T does not prevail under a constructive eviction or breach of implied warranty of habitability,
then she must pay L rent for the entire lease period subject to the state's rules on abandonment.

Under the traditional common law view, L can let the apartment lie idle for the entire rental
period. However, most jurisdictions require the landlord to make reasonable efforts to mitigate
the damages by trying to rent the apartment out to another tenant. Here, L made the premises
ready on December 1 and put a one-line ad on the Internet. L's duty to mitigate is met to the
extent that putting a one-line ad on the Internet would reasonably alert potential renters to the
availability of the apartment. The fact that no one rented the apartment until February might
indicate that his efforts were not reasonable; however, L will argue that the holidays made
renting the apartment more difficult and that any greater effort would not have yielded better
results.

T's liability for future rent may also depend on whether L has accepted her surrender of the
premises. T can argue that L's act of turning on the hot water, repairing the roof and reletting the
premises meant that L resumed possession of the premises and those acts constitute acceptance
of surrender. However, most jurisdictions hold that merely making repairs and attempting to re-
rent the premises is not enough to constitute acceptance. Thus, if T was still under the lease, she
would be liable for any month where there was not a tenant present in the apartment as well as
the cost of the Internet ad since that expense was not incurred but for her abandonment of the
premises.