What is a leasehold (landlord/tenant) estate and what are the 4 types?
Estate created & governed by a lease signed between the parties.
Types:
- Tenancy for years;
- Periodic tenancy;
- Tenancy at will; and
- Tenancy at sufferance
Define
tenancy for years
Tenancy with a fixed starting and ending date.
Also called a “term for years,” “fixed term tenancy,” or “estate for years”
When is a tenancy for years required to be in writing?
If the lease is longer than one year, must be in writing to satisfy the SOF
When does a tenancy for years terminate?
Automatically at the end of the fixed period or end date
Define
periodic tenancy
Automatically renews at the end of the period with no set end date (e.g. month-to-month lease)
How is a periodic tenancy created?
- Express agreement;
-
Implication; or
- No explicit end date in agreement
-
Operation of law
- Holdover tenant
- Invalid lease
Define
holdover tenant
Someone who overstays their lease without the landlord’s consent. Also called a tenant-at-sufferance.
What actions can the landlord take if they have a holdover tenant?
- Refuse to accept payment from holdover tenant (tenant becomes tenant-in-sufferance and landlord can evict); or
- Bind the tenant to a periodic tenancy by either:
- Accepting rent; or
- Giving notice to holdover tenant
What is the effect if the landlord accepts rent from holdover tenant?
Periodic tenancy is created for that payment period
Can the landlord raise the rent for a holdover tenant in a periodic tenancy?
Yes, as long as the landlord gave notice to the tenant before the original lease expired.
Does leaving personal possessions behind or overstaying the lease for a few hours make someone a holdover tenant?
No, landlord cannot impose periodic tenancy
For a holdover tenant with a commercial lease, what is the maximum new lease period that the landlord can impose?
One year
How do you terminate a periodic tenancy?
Give notice by words or conduct a full period in advance (e.g. if month-to-month, must give one month’s notice). If period is one year, then six months notice is required.
Termination is effective on the last day of the period.
What is tenancy at will and how is it created?
Tenancy with no specific term that can be terminated at any time by either party.
Created by express agreement (if no express agreement, court will imply a period tenancy)
How do you terminate a tenancy at will?
At any time, either by:
- Advance notice by either party (typically required but not always); or
-
By operation of law upon:
- Death of either party
- Waste by tenant
- Assignment by tenant
- Transfer of title by landlord
- Transfer of lease to a third party by landlord
What are the 4 basic duties of a tenant?
- Pay rent;
- Not commit waste (affirmative/voluntary, ameliorative, or permissive);
- May also include duty to repair in some jurisdictions/depending on agreement
- Not use the premises for an illegal purpose; and
- Protect third party invitees from foreseeable dangers on the premises
When can the tenant commit ameliorative waste (make improvements to the property)?
If it is reasonably necessary for the tenant’s continued reasonable use of the premises.
Typically need to give landlord advance notice.
Does the tenant have a duty to repair (not commit permissive waste)?
Yes, to the extent reasonably necessary to maintain the premises (unless otherwise specified in the lease)
⚠️ No duty for normal wear and tear
What is the effect if a nonresidental lease requires the tenant to “repair and maintain”?
Tenant will be liable for damages unless it was the landlord’s fault or it was significant and not the tenant’s fault (e.g. catastrophic damage due to an earthquake)
Are residental leases that require the tenant to make repairs valid?
No, landlord still has ultimate duty to repair even if lease says otherwise
⚠️ Exception: no duty to repair damages caused by tenant
Define
fixtures
Structures or materials that are permanently affixed to the property and were intended pass with the land.
⭐️ To determine whether something is a fixture, ask yourself: “did the party intend for this to be a fixture?” and “how much property damage would occur if fixture was removed?” The more intent and damage, the more likely it is a fixture
Can a fixture be removed?
Only if:
- Removal will not permanently alter the premises (i.e. property can be restored to pre-fixture condition); and
- It is completed in a reasonable amount of time
If removal of fixture will substantially/permanently alter the premises, what is required?
Landlord approval. If no approval → tenant has committed affirmative waste
Is the tenant ever required to remove fixtures?
No, as long as the fixtures don’t breach the lease
What actions can a landlord take if the tenant has materially breached their lease and remains on the property?
- Continue lease & sue for damages on late rent; or
- Evict tenant
Is late rent payment a material breach of the lease?
Yes
What actions can a landlord take if the tenant has materially breached their lease and has abandoned the property?
- Treat as surrender and retake the premises;
- Ignore & hold tenant responsible for unpaid rent (minority); or
- Re-lease premises (majority)
If the tenant abandons the property, is the landlord required to mitigate damages?
Majority: Yes, should make good faith effort to rent to other tenants and can seek damages from tenant for losses.
Minority: No, landlord can seek damages for all unpaid rent
Can a landlord sue for future rent due?
No, only for past rent
Define
self-help eviction
When the landlord seeks to evict a tenant by bypassing the normal eviction process (e.g. changing locks, etc)
Generally not allowed.
What are the landlord’s duties to the tenant?
- Give possession;
- Implied warranty of habitability; and
- Covenant of quiet enjoyment
What are a landlord’s tort liabilities?
Landlords have a duty of reasonable care → can be liable for injuries:
- In common areas & non-common areas if defect is hidden;
- From existing defects that landlord knew of and failed to notify tenant about;
- From negligent repairs made by landlord; and
- From failure to make repairs required by housing code
What is the landlord’s duty to give possession?
Majority: Landlord must deliver legal + actual, physical possession
Minority: Landlord need only deliver legal possession (right of possession)
Define
covenant of quiet enjoyment
Covenants that tenant has right to quiet use and enjoyment of the premises, without interference from landlord
How can a landlord breach the covenant of quiet enjoyment?
- Actual eviction; or
- Constructive eviction
Define
actual eviction
Wrongfully excluding tenant from all or part of the premises
Define
constructive eviction
Landlord’s actions are incompatible with the tenant’s quiet use and enjoyment
Elements needed to establish constructive eviction
- Substantial interference caused by a landlord’s act or omission, i.e. chronic and severe problems (e.g. broken pipes, leaky roof);
- Notice: landlord fails to correct problem within reasonable time after being given notice; and
- Vacate: tenant vacates property within a reasonable period of time after landlord fails to repair
Whose responsibility is it to prevent nuisance?
Landlord
Define
implied warranty of habitability
Warrants that residential premises meet the basic standard of living
Examples:
- Heat in winter
- Running water
- Plumbing
Does the implied warranty of habitability apply to commercial leases?
No, only residential
Who specifies the minimum habitability standard?
Local housing code or case law
If the landlord breaches the implied warranty of habitability, what actions can the tenant take?
- Move out & terminate the lease;
- Repair & deduct;
- Withhold rent (can either reduce or withhold entirely until court determines fair rental value; must be placed into escrow account); or
- Remain & sue for damages
Can the warranty of habitability be waived or modified in the lease?
No, can never be waived or modified in the lease
Define
doctrine of retaliatory eviction
Landlord cannot retaliate against a tenant who reports housing code violations (e.g. cannot evict, refuse to renew a periodic tenancy, or raise tenant’s rent)
What is an assignment and to whom is the assignee liable?
Transfer of the entire lease to new tenant (assignee)
Assignee is in privity with landlord and liable for all rent owed to the landlord
What is a sublease and to whom is the subleasee liable?
Transfer of only part of the lease term to the subleasee
Subleasee is in not privity with the landlord and thus is liable to the subleasor only.
Is the subleasee (subtenant) bound by covenants?
No, unless expressly stated
Can a tenant freely assign or sublease the property?
Yes, unless otherwise specified in the lease
If the lease prohibits assignment or subletting without the landlord’s permission, but doesn’t specifiy the standard for approval, when can the landlord withhold permission?
Only when commercially reasonable
If the lease prohibits subletting/assignment, but the landlord knows of it and fails to object, what is the effect?
Prohibition is considered waived
If the property is condemned, does the tenant need to continue making rent payments?
If partial (tenant still has partial use of the property) or temporary: Yes, but tenant is entitled to compensation for dispossession from condemnation
If full condemndation: No
