landlord ten outline

8/2/2019 LANDLORD Ten Outline

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LANDLORD & TENANT

Lease: A lease is a transfer of a possessory interest in land (real property). It is a conveyance

that creates property rights. A lease also creates a number of promises, a promise by the tenant

to pay rent and a promise by the landlord to provide utilities — the lease is a contract too that

creates contractual rights.

License: A license is a clear cut contract. A hotel stay is a license a right to be somewhere or

do something for a (usually short) period of time that would under different circumstances betrespassing.

The Three Types of Leaseholds:

1. Term of Years: Leasehold for any single, fixed period of time. No notice to quit is

required; ends automatically. (RSMo., 441.070) Normally not terminated due to death of

either party. Can be a day or forever.

2.

Periodic Tenancy: Leasehold for a recurring period of time; such as, to A for month-to-month or year-to-year. Notice to quit requires at least one period; i.e., one month or one

year. RSMo., 441.050 requires 60 day written notice for year-to-year. RSMo., 441.060(1)requires one month notice for month-to-month.

3. Tenancy at Will : Leasehold with no fixed time or period – lasts as long as both parties

want it to. Termination is bilateral: Either party may terminate at any time. Still requires amonth notice. Usually without a lease and is considered month-to-month. Does not need

to end on an anniversary date.

Tenancy at Sufferance: Not a real tenancy; this is what happens when tenant does not vacate as

required by the end of lease. (Holdover- no right to be there because there is no lease). Generally,

there are two remedies available to the landlord: (1) eviction and recovery of damages for thelost possession, or (2) binding the tenant to a new term. RSMo. 441.060(1): Tenancy by

sufferance may be terminated by one month’s notice.

Frenchtown Square v. LemstoneFacts: Frenchtown (FS) leased premises to Lemstone (L). L vacated after FS leased adjacent

premises to a competitor making it difficult for L to keep its business running. FS sued for

unpaid rent.

Issue: Whether FS had a duty to mitigate damages by leasing premises to another lessee.

Holding: Yes, lessor has a duty to mitigate damages caused by lessee’s abandonment in bothcommercial and residential contexts, and failure to mitigate is an affirmative defense.

Overwhelming majority of states there is a duty to mitigate in residential contexts; morethan commercial.

Rationale: Under common law, leases are viewed not as contracts but as transfers of property.

Treating it as transfer of property; the lessee has abandoned his property.

Kimack v. Adams (MO)



Facts: P prepaid one month’s rent for D’s condo after P paid security deposit. P notified D two

days prior to start of term that P would not be able to lease property due to medical reasons. Dreturned deposit, but held onto the monthly rental.

Procedure: P sued and was awarded full judgment. D appealed and the amount was reduced to

the 5 days D occupied premises at the end of the leased month.

Issue: Whether P is entitled to the refund of the full amount of his prepaid rental. Holding: No, P is only entitled to the 5 days during which D occupied the premises. Rationale: Upon default of tenant, landlord has three options: (1) remain out of possession and

recover rent; (2) give notice to tenant, take possession and attempt to mitigate damages with thetenant being held liable for the loss; or (3) resume possession without notice and terminate the

lease. Because the owners chose (1), P is only entitled to 5 days’ recovery starting when D took

back possession. There is NO DUTY TO MITIGATE in MO for either residential or commercial.

Crechale & Polles, Inc. v. SmithFacts: C & P leased premises to S for a period of 5 years. C & S discussed short-term extension

and S wrote a letter to C confirming his understanding of extension. C replied with a letterdenying any extension. S paid for one month rent after termination of 5 year lease and then

vacated.

Issue: Whether C could renew the tenancy for a term of years after he had rejected the extension

request and subsequently accepted payment for one month’s rent.

Holding & Rationale: No, the rejection of the extension request via C’s letter served as atermination of the lease and S was thereafter to be treated as a trespasser. The subsequent

acceptance of rent created a new periodic tenancy.

Kilbourne v. ForesterFacts: F leased for a term of years an apartment to K. K held over for 2 more years after

expiration and K paid rent on a monthly basis, but F did not accept it. F sent K many letters

demanding she vacate, but nothing more. F finally brought suit to recover possession. K argued

that (1) F treated K as a tenant for a new term, and (2) by holding over, K created a new lease.

Issue: Whether, by laches and acquiescence, F treated K as a tenant for a new term. Holding & Rationale: No, it is the landlord’s intention that counts, and the persistent refusal by

F of K’s rent, and the lack of other evidence showing a manifestation of intent by F toward K,

amounted to the court refusing to acknowledge K’s claim. RSMo., 441.060(1): Tenancy by

sufferance may be terminated by one month’s notice.

(1) Once lessee become holdover they can be kicked out without notice. (2) Lessor went out

of way to make it clear that consent was not given.

SUBLEASES & ASSIGNMENTS

Ernst v. CondittFacts: June 1960: Ernst leased land to Rogers for 53 weeks under a lease that required theconsent of Ernst if Rogers were to assign or sublease property. July 1960: Rogers built a go-cart

track on the premises and then sold the business to Conditt. August 1960: E & R extended lease

to July 31, 1962 and E consented to R subletting the premises to C upon the express condition



that R would remain personally liable for performance of the lease. R & C signed document

which ―sublet the premises‖ to C and C signed an acceptance. November 1960: C stopped rentpayments. Once the term expired, E sued C on the theory that the lease had been assigned from R

to C. C denied any assignment and argued that it was merely a sublease. Issue: Whether the relationships and agreements between E R & C constituted a sublease or an

assignment. Holding: The parties intended an assignment, therefore, an assignment was made. Rationale: The parties’ intention is controlling: When Rogers gave up his entire interest, Condit

acquired every bit of Roger’s interest and paid rent directly to Ernst.

The court gets to the difference between assignment and a sublease.

Assignment is a transaction in which a party conveys his entire interest in property to another.A sublease is a transaction in which a tenant or lessee conveys an interest in the leased premises

that is less than his own or retains a reversionary interest. Entire Term = Assignment; Part of

Term = Sublease. If an assignment, then defendant owes; if sublease, then defendant does not

owe to plaintiff.

Issue is privity of estate because there is no privity of contract between the parties. Privity of

estate = both have interest in the same estate. Anything less then NO assignment.

Kendall v. Ernest Pestana, Inc.Facts: EP leased hangar space to Bixler under a lease that required EP’s consent to anyassignment or sublease. Bixler agreed to sell his business to Kendall, including the lease. EP

refused to consent unless the rent was increased and additional terms imposed. Kendall then sued

EP claiming the refusal to consent was unreasonable and an unlawful restraint on alienation.

Issue: Whether EP’s refusal was permissible.

Holding & Rationale: No, in a commercial lease a landlord may withhold consent to transfer

lease only when the landlord has a commercially reasonable objection

Increase Rent is not reasonable.

An absolute prohibition is ok as long as it is clear. What if lease is silent as to lessee’s ability tosublease? General Rule: Lessee has right to property, including right to sublease and assign.

DUTIES, RIGHTS, & REMEDIES

Quiet Enjoyment and Constructive Eviction

Two separate doctrines:Breach of Quiet Enjoyment may lead to Constructive Eviction, which as a remedy gives you the

right to leave.

There is no clear-cut test to determine whether a landlord has interfered with the tenant’s quiet

enjoyment. The following are situations where a court found has found that the landlord’s

actions constituted a substantial interference with the tenant’s quiet enjoyment:

Landlord erecting scaffolding in front of a tenant’s store interfering with the tenant’sbusiness.



Landlord creating a substantial amount of dirt & dust while undertaking renovations toanother unit.

Landlord undertaking unannounced and periodic inspections of a tenant’s premise, andconsistent interruptions to gas and electricity supply.

A breach of the covenant may not be found in all cases. Generally when the interruption isforeseeable or when reasonable care has not been exercised, the landlord may be deemed to have

interfered with the tenant’s quiet enjoyment.

Constructive eviction- the lessor has or has not done something that is so bad it forces you outof the premise. CE describes a circumstance in which a landlord either does or fails to do

something that he has a legal duty to provide (e.g. the landlord refuses to provide heat or water to

the apartment), rendering the property uninhabitable. A tenant who is constructively evicted may

terminate the lease and seek damages.To maintain an action for damages, the tenant must show that:

1. the uninhabitable conditions (substantial interferences) were a result of the landlord's

actions (not the actions of some third party) and2. that the tenant vacated the premises in a reasonable time.

A tenant who suffers from a constructive eviction can claim all of the legal remedies available to

a tenant who was actually told to leave.

Reste Realty Corp. v. CooperFacts: Cooper leased basement office space that was constantly being flooded by rain water after

every storm. This interfered with her business to the extent that she had to rent space in a hotelfor a business meeting. After many instances, Cooper vacated the building and plaintiff sued her

for unpaid rent. Issue: Did the persistent denial of Cooper’s quiet enjoyment of the leased premises constitute

constructive eviction of the commercial lease? Holding: Yes, the persistent nature of the flooding and the number of times it occurred made it

unreasonable to expect Cooper to remain in the premises.

Rationale: The problems were caused by the adjacent driveway that was not a part of the lease,so the argument that tenant inspected premises is moot even though a second 5 year lease was

signed a year into the first. Even though lessee knew of the problem at the signing of the second,

she relied on assurances that problem would be fixed and the prior experience of maintenanceman showing up each time to fix. Court says quiet enjoyment is implied in the lease.

If it is a hidden defect, lessor has duty to inform if lessor knows about defect.

Constructive Conviction- The only thing you can do is move out.

The Implied Warranty of Habitability (only applies to residential)

Hilder v. St. PeterFacts: Plaintiff entered into a lease agreement with defendant in which plaintiff would occupy an

apartment owned by defendant. While defendant granted possession to plaintiff, defendant did



not take steps to cure defects in the apartment which included, presence of raw sewage, an awful

stench and general conditions of disrepair.

Holding: In the rental of any residential dwelling unit an implied warranty exists in the lease,

whether oral or written, that the landlord will deliver over and maintain, throughout the period of

the tenancy, premises that are safe, clean and fit for human habitation. In determining whether

there has been a breach of the implied warranty of habitability, a substantial violation of anapplicable housing code shall constitute prima facie evidence that there has been a breach of the

warranty of habitability.

Implied Warranty of Inhabitability gives rise to three courses of action: (1) stay in apt, pay

rent and sue for damages; (2) withholding some or all of the rent; or (3) self-help, lessee can fix

problem and deduct that from the rent.

o Implied Warranty of Inhabitability cannot be waived.

o Constructive Eviction requires that the lessee moves out; thereby placing burden

of risk on lessee.

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