V.

Leaseholds: The Law of Landlord and Tenant

A. The Leasehold Estates
1erms of Years: any tenancy that has a set starting and ending date No notice oI
termination is needed because has set ending point, everyone knows when it
ends Under the Statute oI Frauds any lease Ior longer than a year must be in
writing, other states use 3 years Any option to renew can be done orally but it
does not count in determining the initial term Can have a lease that has a
determinable condition, so that when an events occurs the lease is terminated
, ample: L le,8e8 to T for one ye,r, beginning October 1
8t

!eriodic 1enancy: Tenancy Ior a period oI time, it automatically renews Ior the
same period unless party gives notice oI termination Can be month to month &
last a long time Statute oI Frauds requires writing iI its longer than year
a ample: to T from ye,r to ye,r, beginning October 1
b A problem with leases is how to raise the rent, under common law it
must be terminated Iirst and an oIIer with the new periodic term/rent
must be given Most states today allow you to raise the rent
c To terminate a year tenancy under common law it required a 6 month
notice Today iI it is shorter than 6 months you must give a period notice
(e: month to month give 30 days notice) II it is a year lease then it is 6
month but some states say 3
d Under Common Law iI the notice was less than required then it
permanently prevented the lease Irom being terminated and rent would
continue Today most courts presume iI you`ve given too short notice it
won`t be eIIective that month, but the net
e ample: T, , month to month ten,nt, notified L on November 16, 2010,
th,t 8he would h,ve v,c,ted ,8 of November 30, 2010 T did not give
enough notice oI 30 days thereIore she is bound Ior another month
3 1enancy at Will: Person becomes a tenant, but no deIinitions oI the terms or
ending date are made Usually turn into a periodic tenancy or terms oI years when
the terms are negotiated successIully II the tenancy is at will oI one party it was
also at will oI the landlord Death oI the landlord or tenant terminated the tenancy
at will
a Terminable under CL immediately Treated like a license i
b Under common law lessor and lessee had the right to terminate, Today
one or the either has the right to terminate
c Modern statutes require a period oI notice oI 30 days or a time equal to
the interval between rent payments, which makes it look very much like
a periodic tenancy
d arner v. errish Landlord gave D a lease which states that the
tenancy could continue 'Ior and during the term oI quiet enjoyment
Irom the Iirst day oI May, which term will end D has the
privilege oI terminating this agreement at a date oI his own choice
hether the le,8e i8 , ten,ncy ,t will or determin,ble life ten,ncy
) Rule Court Iollowed the intent oI LL & tenant, intent was Ior the
tenant to stay as long as he wanted Court declared it as some kind
oI terminable/deIeasible liIe tenancy, but not liIe estate All you
need is one party to have right to terminate, but don`t need other
party to be able to
) Today/Traditionally most courts will hold that this is a tenancy at
will or periodic tenancy (month to month)
1enancy at sufferance: Tenant holds over tenant remains in possession aIter the
termination oI the lease Landlord has two options ) to evict ) hold the tenant/
consent to the creation oI the new tenancy
a Common law held the tenant Ior a Iull term up to the maimum period
oI the Statute oI Frauds : Have a term Ior years Ior year but, iI you
stay the net day under common law you are bound Ior a another year
ceptions were made in cases oI illness or some serious prevention to
leave
b Today more likely to be held as a periodic tenant (usually a month) II
tenant sends a check and landlord accepts then tenant goes back to being
another tenancy Some states say its at will at
st
iI landlord chooses not
to evict or he can say your only paying me this Ior unpaid rent & remain
a tenant in suIIerance until I evict you
. Lease
In common law a lease was treated much more as a conveyance with a contract
aspect in it Today we minimize that there is a property conveyance and
emphasize the contractual nature
Under Common Law tenant received a .ovenant of quiet enjoyment
a. The landlord , agents and or superior holders oI a title would not
interIere with the tenants use oI the property
3 very State has a statute that governs the basics oI landlord/tenant law, contain
the obligations oI each party : Civil Rights and Fair Housing Act has a
unique anti-evi.tion statute that requires the landlord to have good reason to
evict the tenant or to not renew the lease
a. Landlord has to show: ) tenant Iailed to pay rent ) tenant acted
disorderly 3) tenant caused damage 4) tenant interIered with other
tenants aIter being warned
4 Most States say ecept Ior civil rights kinds oI things tenant can simply be non renewed
by landlord Ior any reason at all
&nder CL, all covenants in a lease were independent Irom each other II landlord
breached certain promises, tenant still had a duty to pay rent Under CL, LL had no repair
obligations unless he agreed to epress coveant that was still independent covenant &
didn`t Iree tenant Irom rent Tenant had duty to repair under CL II there was a Iire,
tenant had to restore, even iI commercial building destroyed tenant still had to pay rent
Today, they are considered dependant .ovenantsso iI landlord breached tenant may
terminate, without rent or reduce a portion oI the rent
6 Today in many states rent has to be written in how landlord wants rent to be paid
Majority States say iI you don`t write it in, tenant pays rent last day oI lease
In every State LL has $ummary Pro.ess that allows the most epeditious judicial
eviction remedy Allows him to collect back rent as well
8 CL allowed landlord to use reasonable self help which meant in some states as long as
he wasn`t unreasonably violent Today, can no longer use self help even when tenant in
violation ven iI a covenant written saying that LL can reclaim without going to court
this clause is against Public Policy because trying to decrease violence & killings oI
tenants
Landlord Remedies if tenant moves out early:
a To accept the surrender & terminate lease, but still make pay owed rent
b ait to end oI lease & sue Ior unpaid rent LL has no duty to mitigate
c LL can notiIy tenant & hold them to the lease, but try to mitigate and Iind
another tenant as sublease or assignment Irom you II Iind someone and they
pay less, the original tenant has to pay the diIIerence II no new tenant is Iound
then original tenant has to pay all the rent Today majority of $tates require
LL to mitigate
0Tenant in Possession
a erg v. Wiley D objected to P`s continued remodeling oI the restaurant
without procuring written permission & her consequent operation oI the
restaurant in a state oI despair with alleged health code violations D along with
the police came and chained the locks when the P was not there
) Rule(majority opinion in US ) Court says even though there is a selI
help clause written into the lease, self help will T be allowed and LL
would have to use summary judgment procedure that allows eviction
within 30 days Any mode oI selIhelp will be treated as violation oI
tenants rights & improper selIhelp
) NO selIhelp allowed with Court order either
3) Under CL LL can use selIhelp to evict as long as reasonable
4) There are statutes that say iI LL uses selIhelp & its Iound out not to be
proper the amount oI damages is tripled
) In some states selIhelp is still allowed in commercial settings
Tenant Who has Abandoned Possession
a $ommer v. Kridel D was a tenant and signed a lease AIter D let landlord
know he could not take the apartment, LL did nothing and just let the
apartment sit
) Rule (Majority) There is a duty to mitigate and LL has burden oI
proving he mitigated Here, Court says a lease is a contract and LL
cannot let the apartment sit Under CL LL had 3 options when tenant
abandoned
) LL has contract duties to mitigate and tenant has right oI recession and
epectations oI mitigations Court put the burden on LL to prove that he
mitigated (e: need to advertise, show the apartment iI that is the one a
new tenant wants)
3) Minority/Traditional Rule LL has no duty to mitigate unless there is an
epress covenant stating that he has to accept the surrender, lease would
be terminated and tenant is not liable Ior the rest oI the rent or the
landlord could sublet and tenant would have to pay diIIerence iI new
tenant would pay less
C.Dis.rimination
ederal air Housing A.t (68) someone who is advertising (craigs list) or using a
broker (agent) cannot discriminate iI building larger than 3 units or the LL owns more
than 3 units But iI they just put up a sign saying Ior rent in their building they can
discriminate Ior 3 units or less The Fair housing act does not protect against seual
orientation, but does protect against race, gender, religion, and national orientation
$eparate se.tions dealing with disability & handi.aps New building has to be
wheelchair accessible and tenant has to be able to make certain changes to accommodate
them
Today in some states you cannot discriminate based on proIessional status In most states
still valid to discriminate against Lawyers
a ote Case (Kramarsky v. $tahl management) LL reIused to rent an
apartment to divorced black woman because she was a lawyer NY held that
LL can discriminate because she is a lawyer Later on they included a ban on
discrimination because oI proIessional status
D.Delivery of Possession- at start oI the lease, obligations of LL:
English Rule (Majority Rule) LL has to give physical possession to tenant
a Tenant Remedies: () Can end lease iI LL Iails to give physical possession
() Tenant can also sue Ior damages (3) tenant can say going to continue
lease, but have no obligations to pay rent until landlord gets everyone out &
gives possession
Ameri.an Rule- LL has to give right to possession, but doesn`t have to give actual
physical possession II LL allows prior tenant to stay as a tenant in suIIerance he has still
violated the Am Rule & hasn`t given the right oI possession to incoming tenant
a Tenant Remedies (tenant is bound to lease and has burden to get prior
tenant out): () Tenant can treat the holdover as a trespasser and evict
through summary procedure and recover damages Irom holdover tenant and
has to bare epenses oI the lawsuit
3 Hannan v. Dus.h P was leased property by D, P was supposed to move in on the
st
, but
D Iailed and reIused to put P in possession or to keep the property open Ior him D also
reIused to bring legal action against tenants who still occupied the property
a Rule Court adopted the American Rule, landlord has no obligation to give
physical possession just have to give legal possession
b II trespasser comes that`s problem oI tenant, not LL Tenant has to sue
holdover tenant to get damages, tenant is still bound by lease & has to pay
rent
c Once tenant in actual possession LL`s promise oI Q doesn`t cover this
However, Implied arranty oI Habitability does include some obligation that
does etend to 3
rd
parties to protect tenant aIter day
E. Landlord`s bligations and Tenant`s Remedies
Covenant for Quiet Enjoyment takes over when lease starts so iI prior tenants want to
come back this covenant isn`t violated by a trespasser because prior tenant showing up on
day & LL has no obligation to protect tenant $tates that adopted implied warranty of
inhabitability for residential purposes the covenant oI quiet enjoyment has been
epanded Ior LL to protect against 3
rd
parties as well ut on commercial side they don`t
have to protect
mplied Warranty of Habitability(WH)- 0 States recognize Ior commercial leasing
Most states only apply it to residential side, and states do not recognize (IH) at all
The &niversal Residential Landlord Tenant A.t was passed by legislature that sets out
basi. rules of mplied Warranty of Habitability that LL is required to supply
minimum set of known servi.es when renting residential spa.e:
a There must be walls () windows that open & close and don`t let cold air in
(3) hot water (4) at least toilet in unit () cant be inIested with mice & rats
(6) adequate plumbing () electrical connection
b $afety locks, windows; no dangerous/disease (vermin, bedbugs
c $e.uritylocked Iront door, security personnel, smoke detectors, structural
soundness (shouldn`t be collapsing)
d $anitarydon`t want to smell sewage or have basement Ilooded with sewage
orking Iitures
) ith Luxury apartments IH is not going to help you Ior pool
e. ote: n when there was a protest and garbage could not be collected LL
was liable and rent was to be reduced
f. Who is .overed by this mplied Warranty: Most states applies to invitees
and guests directly using building not to just anyone who can come into
contact, but people directly using it ew states say it applies to passerbyers
and anyone who could be Ioreseeably injured (e: woman raped by a non
tenant when passing building bc she was a 3
rd
party beneIiciary oI promise LL
made to get a lock Ior Iront door; guy walking by building and piece oI
building Iell on him)
) II LL owns multiple buildings and one causes damage to another
building, some states say that the IH will not be etended and other
states say that LL is liable Ior both buildings under IH A new
landlord can be sued Ior the damages caused by the building
) LL may have a duty to disclose the crimes that have happened in the
apartment
g. Ways Tenant Can &se the mplied Warranty of Habitability:
h. Tenant .an sue LL Ior differen.e between value as leased & value of
.urrent state and get damages
i. Tenant .an repair & dedu.t from rent (no more than months rent or no
more than or times a year) Tenant has to notiIy LL oI condition & give
them time beIore carrying out repair, law suit or moving or saying the
violation has terminated lease
) Most states say can only do repairs on apartment & not common area
But some states allow a group to withhold rent to repair a Iurnace or
pipes
) o waiver is allowed so LL cannot put burden on tenant to do repairs
LL may hire or pay tenant to do repairs, but cant shiIt burden /4 allow
waiver which has to be separate printed document & separately signed so
LL can shiIt entire repair burden to tenant iI they want to
j. ithhold payment oI Iuture rent where there has been a breach oI IH
Tenant must show:
) The LL had notice oI the previously unknown deIect & Iailed within a
reasonable time to repair it
) The deIect, aIIecting habitability eisted during the time Ior which rent is
withheld
3) Can get punitive damages iI there was a willIul and wanton or Iraudulent
breach
. Tenants rights to lease/transfer v. Landlords Control: Assignment & $ublease
Landlord always have right to sell property unless express .ovenant that says they
.ant. In many states this covenant is void as restraint on alienation New landlord can
hold all tenants to lease they had ith tenancy at will it varys in some states tenancy at
will terminates at sale because its speciIic to landlord
$tarting Point II lease is silent, because tenant has recognized property right, they have
right to transIer property as a assignment or sublease II Lease says tenant cannot assign
this does not apply to sublease II says tenant cant sublease, this does not apply to
assignment It is saIer to say both $ome $tates say term sublease reIers to assign &
sublease so know statute Ior the State you`re in
3 Assignment transIer oI all remaining period oI lease Tenant doesn`t keep any kind oI
reversion nor does he have a right oI entry in case assignee violates covenants Tenant
can write in a right to enter Unless epressly released by LL, original tenant always stays
liable under the lease here you have an assignment, LL & assignee are in privity oI
estate & oI contract Assignee directly pays landlord & directly responsible Ior covenants
binding tenant (e: repairs) LL can directly sue the assignee or can choose who he wants
to sue (it can be the tenant or assignee or both) However, this obligation is only true
during period an assignee has right to possession oI property Original tenant stays bound
Iorever, but once second tenant leaves and tenant 3 comes in, tenant doesn`t have
responsibility anymore
4 $ubleasegiving third party anything less than all oI remaining term oI lease Subtenant is
in privity w/tenant, but not with landlord No direct relationship with LL Theoretically
subtenant supposed to pay rent to tenant & tenant pays LL Subtenant does whatever
repairs Ior the tenant and not the landlord II LL wants to evict the subtenant LL must
include tenant in suit In States today subtenant can be included in law suit, whereas
beIore subtenant could be released Irom law suit since no privity oI estate or contract w/
LL Most States Today require subtenant to sign a direct agreement with LL Doesn`t
release tenant, but at minimum creates privity oI contract with LL Some States say it
also privity oI estate with LL
II lease is silent, CL rule & rule in most places says Landlord .an refuse an assignment
or sublease Ior any reason or no reason at all, but there is still civil rights overlay and
can`t reIuse them Ior any religious or racial reasons In commercial leases, $ome $tates
automatically read in that LL will only turn them down Ior good commercial reason
a.Ernst v. Conditt P had a lease with Rogers, so Rogers can build a gocart track
Ior a term Ior years Rogers and DeIendant negotiated an etension oI the term
and LL`s made an amendment to the lease D made some payments oI rent, but
then stopped, he remained in possession oI the property until the epiration oI
the leasehold
) Rule Court held that D was an assignee, he can be sued and has an
obligation to pay rent
) Reasoning: Roger did not have a right oI reentry, thereIore Roger did
not retain anything and the lease gave the D the entire remaining terms
3) Another reason why D is liable: D signed the same document that LL
did Although the terms were modiIied Court could have said there was a
direct contractual relationship and privity oI estate because there was a
new lease
6 Problems:
a. L leases to T for a term of three years at a monthly rent of ,000k. ne
year later T ~subleases, leases, and assigns to T for ~a period of one year
from date. Thereafter neither T nor T pays rent to LL. What rights has
LL against T? T?
) This is a sublease because tenant is going to come back aIter the year, L
has to sue T, T would have to sue T II LL wants to evict using
summary eviction he would have to include both T and T in the lawsuit
b. L leases to T for a term of three years at a monthly rent of ,000; the lease
provides that ~T hereby .ovenants to pay said rent in advan.e on the first
of ea.h month. The lease also provides that ~T shall not sublet or assign
without the permission of L. $ix months later T, with permission of L,
transfers to T for the balan.e of the term. Thereafter T pays the rent
dire.tly to L for several months, then defaults. L sues T for rent due.
) This is an assignment because it is Ior the rest oI the term Original
tenant is not released Irom his obligation L can sue either T or T
.. L leases to T for a term of three years at a monthly rent of ,000k; in the
lease ~T .ovenants to pay the rent in advan.e on the first of ea.h month.
And also .ovenants to keep the leased premises in good repair. $ix months
later T assigns her entire interest to T, who agrees in the instrument of
assignment to ~assume all the .ovenants on the lease between L and T;
three months later T assigns his entire interest to T2, and three months
after that T2 assigns his entire interest to T. T defaults on rent payments
and fails to keep to keep the premises in good repair. L sues T, T, T2, and
T. What are the liabilities of the four tenants to L and as among
themselves?
) This is an assignment L can sue T because he remains bound to the
lease T would have been bound only until he assigns to net person,
but since he agreed to assume T`s covenants he is equally bound even
aIter giving up possession oI property to T T is only responsible Ior
the 3 months because that is the time when he is in possession T3 is
responsible Ior the rest oI the lease because he is currently in possession
L can sue T, T or T3
Kendall v. Ernst Pestana, n.. LL is the city oI San Jose they leased to the Perlitches
who subleased to Biler (the Perlitches are their landlord), Perlitches assigned to D and
Biler wants to assign to P Lease says that permission Irom D to make assignment is
required D wants to end the sublease with Biler and sublease directly to P to charge
them a higher rent
a. Rule Court says that there is a IorIeiture restraint in the lease; they are going
to read into every commercial lease an obligation oI Iairness Landlord must
have a commercially reasonable reason to reIuse the assignment $ome
states have not etended commercial reasonableness requirement
b. Courts will not allow personal taste to come in as a reason Ior why the LL
wants to reject the assignment
.. Should a LL have a right to improve the lease even iI it is not written in? LL
is bound to lease, but would have to write in option to improve the lease Cali
adopted a statute saying LL can write in that iI you sublease LL is allowed to
take proIits
. Right`s and enefits of Tenants
Traditionally, protection oI tenant was generally through landlord`s promise oI Quiet
njoyment Most states have an implied Q even iI not epressly written Originally,
landlord was violating covenant Ior Q when he evicted the tenant; improperly
interIering with the tenant Today eviction is no longer a violation oI Q, it`s the taking
back possession oI the property because rent was not paid
Types of Evi.tion:
a. Total A.tual Evi.tion Landlord physically bars tenant by changing the locks,
putting bricks in Iront oI the door, or grabs him by the neck The lease
terminates at that moment and tenant has no Iuture obligations to LL iI he didn`t
want to stay there He is still obligated Ior prior rent or damages committed
Tenant could also sue LL Ior damages because their interests have been injured
II evicted & didn`t want to be evicted tenant could get court order that LL acted
improperly and could be restored by court to leasehold & it would continue &
they could collect damages
b. Partial A.tual Evi.tion- iI LL put up a Ience near property or LL took over
storage room not in the apt or part oI leasehold Duty to pay rent dependant on
LL not evicting tenant Until late in 20
th
C, partial a.tual evi.tion Ireed tenant
Irom duty to pay rent, but could remain on property Ior as long as LL in
possession oI any part oI property Tenant had duty to do repairs on land & LL
could evict iI tenant Iailed No summary judgment at this time so only had
ejectment which took 3 years Most $tates, now say get pro rata redu.tion
in rent due iI losing 0 oI property reduce rent by 0, but not going to give
you totally Iree rent ther $tates say iI your partially evicted you do not have
a duty to pay rent
.. Total Constru.tive Evi.tion Indirect act by LL that interIeres with Q oI
premises by tenant : LL improperly graded driveway & now when it rains it
leads to Ilood (Reste Case) Creating a dangerous situation, or allowing another
tenant to create a dangerous situation (e: moving tuberculosis treatment center
was seen as constructive eviction because dangerous & creating a danger)
here there`s constructive eviction tenant has no duty to pay rent, no obligation
to LL and lease is terminated However, tenant must promptly move out
(Modern approa.h is followed by Reste .ase which etended the time when
she can move out) Downside of tenant moving out iI wrong and what LL did
wasn`t constructive eviction tenant has improperly abandoned tenant obligations
and may be bound to LL Ior all unpaid rent
3 Reste Realty v. Cooper D rented the basement Iloor and every time it rained during the
Iirst year oI the lease the resident manager made repairs D signed a new lease and every
time she complained about the rain the new manager did not Ii anything D did not
move promptly and waited a Iew days P sued D to recover rent allegedly due
a. Rule Court is () rejecting the idea that conveyances are independent Irom
each other, leases are dependent () to be constructively evicted the tenant
does not have to be permanently evicted, the problem just has to be recurring
(3) epanded the covenant oI quiet enjoyment allowing not only protection,
but more enjoyment by being allowed to stay longer $ome $tates ask did you
move out within a week or 0 days & even iI been constructively evicted you
waived your right to remedy iI haven`t moved out
b. Promise by LL was held to be meaningless under CL & iI clauses were
independent you can`t rely on it II LL comes immediately & Iies Ilooding
problem then you can delay leaving
4 Some States recognize Partial Constru.tive Evi.tion (NY) (apartment penthouse on
top oI building, but on rooI central air conditioning system that gave oII green liquid that
Ilowed on terrace oI apt when running so tenants moved out oI terrace stayed in apt &
stopped paying rent saying PC) Courts agreed that it only means you move out of area
not full pla.e you don`t have to move completely out oI apartment Remedy should be
the same for partial .onstru.tive evi.tion as is for partial a.tual evi.tion. Tenant
didn`t have to pay any rent at all as long as air conditioning system dropped the green
stuII Some courts say reduce rent by Iair amount rather than totally terminating Most
likely to say pro rata redu.tion rather than NY case that allowed total rent reduction