P R O P E R T Y O U T L I N E

TABLE OF CONTENTS

Estates 2Definitions 2Present Possessory Estates 2

Fee Simple Absolute 2Fee Tail 2Life Estate 2

Defeasible Fee Simple Estates 3Fee Simple Determinable 3Fee Simple Subject to Condition Subsequent 4Fee Sumple Subject to Executory INterest 4Distinguishing between FSD and FSCS and Covenants 5

Future interests 5Future Interests Retained by Transferor 5

Reversion 5Possibility of Reverter 6Right of Entry 6

Future Interests Created in Transferees 6Remainder 6Vested Remainder 6Contingent Remainder 7

Rule against Perpetuities 8Four Step Process for the RAP 9Class Gifts 9Modern Reforms to RAP 10

Concurrent Ownership 10Forms of Co-ownership 10

Tenancy-in-Common 11Joint Tenancy 11Tenancy by the Entirety 12Partition 12

Landlord-Tenant Law 13Types of Leases 13

Landlord Duties 15Transfers of leasehold interest 17Duties of the Tenant 17

Tenant who fails to pay rent 18

ESTATES

DEFINITIONS

Issue: Bloodline descendants. Not only children, but further descendants Collaterals: All persons related by blood to decedent who are neither descendants nor

ancestors. Escheat: Fee Simple: An estate in land characterized by ownership of the entire property for an

unlimited duration and by absolute power over distribution. Heirs

PRESENT POSSESSORY ESTATES

FEE SIMPLE ABSOLUTE

Complete ownership, lasting for potentially infinite amount of timeo Freely devisable, alienable and descendible.

Language to create: Under Common law – “to A and his heirs.” Today, just using “to A” suffices.

Accompanying Future Interest: None

FEE TAIL

A limitation in either a deed or will limiting succession of property to a grantee and the heirs of his body (lineal blood descendants).

o Virtually abolished in US today. o Today, an attempt to create a fee tail creates a fee simple absolute instead

Language to create: “To A and the heirs of his body.” Accompanying future interest: Historically, reversion in O or remainder in third-party

LIFE ESTATE

Possessory estate that expires upon the death of a tenant or third party. o Alienable inter vivos by life tenant for term lasting so long as the measuring

life; generally not divisible or descendible. Language to create: “To A for life”

o No traditional usage also may be implied. Accompanying future interest: Reversion in O, remainder in third party. Life

LIFE ESTATE PUR AUTRE VIE

Duration of a life estate is measured by the life of a person other than the estate holder. “To A for the life of B” On B’s death, A’s possession ends, and the estate reverts back to O.

WASTE

“Waste” describes the actions of the life tenant that permanently impair the property’s value or the interests of the future interest holders. Life tenant has the responsibility to prevent waste

Three types of waste o Affirmative Waste: The life tenant acts affirmatively to damage the property

permanently. This is a willful act of destructiveness that decreases the property’s value.

o Permissive waste: Life tenant fails to prevent some harm to the property. Synonymous with neglect; tenant fails to act reasonably to protect deterioration of the land.

o Ameliorative waste: Transformations which increase the property’s value. Tenant acts affirmatively to change principal use and thereby increase value. Actionable when the grantor intended there to be no change in use, and the property may still reasonably be used in the fashion the grantor intended.

DISTINGUISHING BETWEEN FEE SIMPLE AND LIFE ESTATE

Sometimes an issue arises where the language is vague, and the parties are not sure whether a life estate or a fee simple is created.

Courts look to the language of the instrument to attempt to ascertain the intention of the grantor.

o The court has a presumption against partial intestacy

DEFEASIBLE FEE SIMPLE ESTATES

Fee simple estates of potentially infinite duration that can be terminated or cut short by the occurrence of a special event.

FEE SIMPLE DETERMINABLE

In the event that a stated condition is violated or actualized, the fee simple determinable terminates automatically.

o If the stated event occurs, the FSD terminates and the estate goes back to the granter (Possibility of reverter).

o FSD is devisable, descendible and alienable subject to the condition. Language to create: “To A for so long as...” or “To A during...” or “To A until...”

o Clear durational language is required to create a Fee Simple Determinable (FSD).

o Ex. “To A for so long as she remains a lawyer.” “To A so long as A does not sell alcohol on Blackacre.”

Accompanying Future Interest: Possibility of reverter in O. o The grantee’s estate could automatically end upon the happening of the stated

event, so the estate could automatically revert back to the grantor. Remember FRANK SINATRA DIDN’T PREFER ORVILLE REDENBACHER (Fee Simple

Determinable, Possibility of Reverter).

FEE SIMPLE SUBJECT TO CONDITION SUBSEQUENT

Created when a grantor retains the power to terminate the estate (right of entry) upon the occurrence of a stated event.

o Should that event occur, the estate of the grantee does not automatically terminate, but rather the grantor retains the right to terminate the estate.

o Until the grantor exercises a right of termination, the grantee continues to own the property.

o Statute of limitations for grantor exercising future intersts does not start to run until the grantor does something to assert the right to reenter.

Language to Create: “To A, but if X event occurs...” “To A on the condition that...” “To A provided that...”

o The grantor must use clear durational language, and must explicitly carve out the right to reenter.

o Ex. “To Alec, but if junk food is ever consumed on the premises, grantor reserves the right to re-enter and re-take.”

Accompanying future interest: Right of entry/power of termination in O.o The grantor retains the right to reenter and terminate the grantee’s ownership. o It is necessary to expressly reserve the right of entry in the grantor.

***Courts construe ambiguous language in favor of the fee simple subject to condition subsequent***

FEE SUMPLE SUBJECT TO EXECUTORY INTEREST

Upon the happening of a stated event, the estate in the grantee is terminated, and then goes to a third party (someone other than the grantor).

o Like a Fee Simple Determinable, except the third party retains the future interest.

Language to create: “To A, but if X occurs, then to B”o Same language that creates a FSD or FSCS, but divested in favor of a third party,

not the grantor.o Ex. :To Church, provided however that if the premises shall ever cease to be

used for church purposes, title shall pass to the American Heart Association.” Accompanying future interest: Executory interest in the third party.

o Shifting executory interest: The third party’s interest following the fee simple subject to an executory interest. It divests the interest of another transferee (cuts short a prior estate created by the same conveyance).

Ex. O conveys “to A for life, remainder to B and his heirs, but if B predeceases A, to C and his heirs.”

C’s interest does not await the expiration of B’s vested remainder, but instead may be cut short.

o Springing Executory Interest: An interest that follows a gap in possession or divests in the estate of the transferor.

Ex. O conveys “to A for life, and one year after A’s death, to B.” A has a life estate. O has a reversion. B has a springing

executory interest in FSA because it springs out of the transferor’s reversion.

DISTINGUISHING BETWEEN FSD AND FSCS AND COVENANTS

FSD AND FCSCo In dealing with ambiguous language, the court tries to ascertain the grantor’s

intent as expressed in the document as a whole. o Courts tend to disfavor forfeiture, so when in doubts arise as to what type of

defeasible fee is created, courts are more likely to construe a FSCS. Covenants

o Covenant: a promise to do or not do some act.o In the event of a breached covenant, the grantor can seek injunctive relief or

damages. The owner of the fee simple does not forfeit ownership.

FUTURE INTERESTS

FUTURE INTERESTS RETAINED BY TRANSFEROR

REVERSION

The future interest that arises in a grantor who transfers an estate of lesser quantum or magnitude than he started with, other than the FSD, which is accompanied by the possibility of reverter, or the FCSC, which is accompanied by the right of entry.

Retained by the transferor or grantor when he transfers an interest less than the one he owns to another.

o Fallback answer when the grantor has transferred less than everything he has other than a defeasible fee.

Follows a life estate, fee tail, or term of years. Ex. O transfers Blackacre to A for life.

o A has a present possessory interest for life. O has a reversion in fee simple because he is entitled to present possession of Blackacre back when A dies.

Ex. O, owning a life estate in Blackacre, leases it “to A for 20 years.” o O has a reversion in a life estate. If O is still alive when A’s lease expires, title

reverts to O for life. Ex. O conveys “to a for life, and on A’s death to B if B survives A.”

o A has a life estate. B has a contingent remainder. O has a reversion that will take in present possession at A’s death if B predeceases A.

Transferable intervivos, devisable and descendible. All reversionary interests are vested.

o Vested interest because both the owner and the event upon which it will become possessory are certain.

POSSIBILITY OF REVERTER

Held by a transferor who transfers a fee simple determinable.

RIGHT OF ENTRY

Synonymous with the power of termination. Held by the transferor of a fee simple subject to condition subsequent.

FUTURE INTERESTS CREATED IN TRANSFEREES

REMAINDER

Created in transferee that is capable of taking in present possession and enjoyment upon the natural termination of the preceding estates created in the same disposition.

o Follows the natural termination of a prior interest or estate it does not divest or cut short a prior estate.

(A future interest following a FSA cannot be a remainder since the fee simple has a potentially infinite duration and cannot terminate naturally).

o Remainder is successive; its owner takes possession immediately following the natural ending of the prior interest or estate, with no gap in time between possessions.

o Must be expressly created in the instrument creating the intermediate possessory estate.

Ex. “to A for life, and on A’s death, to B and his heirs.” o A has a life estate; B has a remainder in fee simple.

Remainders never follow defeasible fees.

VESTED REMAINDER

Vested remainders if it is created in an ascertained person or persons and not subject to a condition precedent. (i.e. certain to become possessory on termination of the prior estate).

o Vested remainders are not subject to the Rule against Perpetuities Becomes possessory upon the natural termination of the immediately receding estate. Three types of vested remainders

o Indefeasibly Vested Remainder Remainder with no condition subsequent and not a class gift subject to

open. The holder of this remainder is certain to get the estate with no strings

attached. Ex. O conveys Blackacre to A for life, then to B and her heirs.

B has an indefeasibly vested remainder held in fee simple absolute. B is known and there are no conditions attached to taking.

o Vested Remainder Subject to Open Vested remainder created in a class, group, or category of persons that

is certain to take on the termination of the preceding estate. The class is still open, as each class member’s share is subject to partial diminution because future takers who are not yet ascertained can qualify for the class.

Ex. O conveys to A for life, then to B’s children. A is alive and has two children C and D.

If B has any more children, which is possible, then C and D’s respective shares will be decreased.

Classes can be opened or closed, depending on whether or not more can join the class.

You can tell that a class is closed by applied the rule of convenience, which says that a class is closed when a member can demand possession.

o Vested Remainder Subject to Total divestment The holder of the remainder is ascertained, and the remainder is not

subject to any condition precedent. However, the remainderman’s right to possess may be cut short because of a condition subsequent.

Ex. To A for Life, remainder to B, but if B dies under age 25, to C. A is alive and B is 20 years old

“remainder to B” creates a vested remainder in the first place. The conditional language, “but if B dies under age 25,” comes after and is a condition subsequent.

If A dies while be is under the age of 25, B takes the estate, but he must live to the age of twenty five to retain his interest. If he dies before 25, C and his heirs will take the estate, not B’s heirs.

CONTINGENT REMAINDER

A remainder is contingent if it is created in an unascertained person or is subject to a condition precedent or both.

A condition is a condition precedent when it appears before the language creating the remainder or is woven into the fabric of the grant to the Remainderman.

Think of a condition precedent as a o Ex. To A for life, then to B’s first child. A is alive and B has no children

Since B does not yet have any children, her first child in an unascertained person. Therefore, B’s first born has a contingent remainder.

o Ex. To A for life, then to B if B graduates from college. A is alive and B is in high school.

Contingent remainder because B must graduate from college to take possession of the property, making it a condition precedent. He hasn’t satisfied this condition, so the estate would not vest in him should A die before he has the chance to graduation from college.

RULES LIMITING CONTINGENT REMAINDERS

Rule of Destructibilityo A contingent remainder would be destroyed if it was still contingent at the time

the preceding estate endedo Has been abolished today

Rule in Shelley’s Caseo When a devise or conveyance transfers a freehold estate to a person and the

same instrument also transfers a remainder to that same person’s heirs or heirs of their body, and both estates are legal or equitable, both are held by first-names freeholder, either for life in FSA or in FT.

o Remainder in freehold in favor of preceding life tenants heirs is held by the life tenant from the devise or conveyance effective date.

o Three Requirements 1. Freehold estate given to first transferee 2. Remainder limited to heirs of first transferee in same instrument 3. Freehold and remainder of are of the same quality. i.e. both legal or

both equitable. Doctrine of Worthier Title (Rule against remainders in grantor’s heirs)

o Remainder limited to the grantor’s heirs s invalid and the grantor retains a reversion in the property.

o When there is a conveyance or devise to a person with a remainder or executory interest to the grantor’s heirs, no further interest is created in the grantor’s heirs; rather the grantor retains a reversion.

Once O holds the reversions, he can transfer a vested interest. o Still applied to inter vivos transfers in a majority of states, but most states treat

it as a rule of construction.

RULE AGAINST PERPETUITIES

Certain kinds of future interests are void if there is any possibility, however remote, that the given interest may vest more than 21 years after the death of the validating life.

o RAP is designed to prevent remoteness of vesting and leave control of the wealth of the world more in the hands of the living than in the hands of the dead.

o The validating life plus 21 years is called the common law perpetuities period. o According to the fertile octogenarian rule, a person is capable of adding to the

family regardless of their age. NY has a rebuttable presumption of infertility over age 55.v

o Applies to contingent remainders, executory interests and vested remainders subject to open, and options.

o Validity of an interest must be verified using logical proof that the contingency can be resolved within the common law perpetuities period.

Look to the validating life to prove validity.

THREE STEP PROCESS FOR THE RAP

Step 1o Start by determining what future interests have been created and whether or

not those interests are subject to the RAP. Only applicable to contingent remainders, executory interests and

certain vested remainders subject to open. The RAP does not apply to any future interests created in the grantor,

i.e. possibility of reverter, right of entry or reversion. Step 2

o Identify a validating life and determine if there is a certainty that the interest will vest within 21 years of the death of that validating life.

o Search for a person who must necessarily or take possession of the interest when the prior interest ends.

If there is a single valid life in being, then the interest is valid under RAP. Only one possible chain of events after the effective date of the

document is sufficient to invalidate a person’s qualifications to be the validating life.

Conversely, showing that no such chain of events exists proves the validity of the interest.

Step 3o If the interest is invalid, determine what, if any, interests remain after striking

out the invalid interest. The challenged interest and any contingency that is a precondition or

condition precedent to it must be stricken from the instrument.o Common law RAP presumes anything is possible and encourages us to come up

with a many possible events that would succeed in validating the future interest.

CLASS GIFTS

RAP has always applied to class gifts. All persons receiving a class gift must satisfy RAP, otherwise no member’s interest is

good. o Each person in the class must be certain to vest within the perpetuity period. o Even if one potential member of the class can be identified and will not vest, the

grant to the entire class fails. Ex. To A for life, then to such of A’s children as live to attain the age of 30. A has two

children, B and C. B is 35 and C is 40. A is aliveo Applying the fertile octogenarian rule, because A is alive, A can still produce

more children, thus adding to the class. Therefore, the class is open. There exists a possibility, however unlikely, that A could produce another child and then could die immediately after. Because that child would need to reach age 30 for the interest to vest, it would be impossible for that interest to vest within the perpetuities period of A’s life plus 21 years.

MODERN REFORMS TO RAP

“Wait and see” doctrineo The validity of any suspect future interest is determined on the basis of the facts

as they exist at the conclusion of the measuring life. o Rather than relying on hypothetical “what-if” scenarios, we wait until the

measuring life has run its course, and then take a second look to gauge the validity of any previously suspect future interest.

o In place in the majority of states. Uniform Statutory Rule Against Perpetuities

o A court will wait and see what happens instead of imagining one scenario under which the Rule would be violated. If the interest vests (or it becomes certain that the interest will never vest) within the waiting period, the interest is valid.

o The waiting period is statutorily determined, usually 90 years. At the end of this period, the court looks to the actual facts to determine whether the interest is valid.

Cy Pres Doctrineo A court will reform an instrument to validate contingent interests, attempting to

carry out the transferors intent in a way that does not violate RAP. o Judicially applied rule of construction. o Gives the court latitude to re-draft an otherwise offensive grant to allow the

conveyance to survive perpetuities scrutiny.

CONCURRENT OWNERSHIP

FORMS OF CO-OWNERSHIP

TENANCY-IN-COMMON

Most common form of co-ownership. Any devise to two or more unmarried persons is presumed to create a tenancy in common.

Each tenant in common owns a share of one and the same piece of property. Each tenant enjoys an equal right to possess the whole property and to share it equally

in rents and appreciation in value. The interest is freely transferable, descendible and devisable. No rights of survivorship.

JOINT TENANCY

Joint tenants share a right of survivorship meaning that the last surviving tenant owns the property outright.

At common law, a joint tenancy is created and maintained only if all tenants share the four unities

o 1. Unity of time: tenants had to acquire title at the same timeo 2. Unity of title: tenants must acquire title in the same deed or will. o 3. Unity of interest: Must own equal shares of same estateo 4. Unity of possession: Each joint tenant must have identical rights to possess

whole property. The language of the grant must contain a clear expression of the right of survivorship,

otherwise the grant is presumed to create a tenancy-in-common. o Ex. “To A and B as joint tenants with rights of survivorship.”

“To A and B jointly” doesn’t work. “To A and B as joint tenants” would be insufficient in some states

because it doesn’t explicitly include the phrase “with rights of survivorship.”

Joint tenancies are good for avoiding probate, because the rights of survivorship will eliminate the necessity of a will.

If one joint tenant is receiving rents from the property, the other joint tenant may have the right to receive a portion of those rents.

SEVERING A JOINT TENANCY

A joint tenant can destroy the joint tenancy at any time by severing the joint tenancy, usually by conveyance.

o Severance turns a joint tenancy into a tenancy in common. The most common voluntary severance occurs when one joint tenant unilaterally

transfers her interest to another person.o An involuntary severance can result from a foreclosure sale or a sale in

bankruptcy proceedings. Ex. O transfers to A, B, and C as joint tenants with rights of survivorship. Five years later

C conveys to D. o The deed to D is a severance of D’s interest. A and B are still joint tenants. D is in

a tenancy in common with A and B.

Unilateral severance but conveyance to self is possible.o One can sever the joint tenancy by transferring the interest to themselves,

thereby severing the JT and creating the tenancy in common. o At common law, and still in some states today, the use of a strawman was

required. A strawman is a third party who briefly takes legal title for the sole purpose of reconveying the property back to the grantor.

See Riddle v. Harmon where a wife was able to transfer her interest in joint tenancy to a tenancy in common without the permission of her husband.

A mortgage or lease executed by one joint tenant will not on its own sever the joint tenancy.

A creditor who is offered a joint tenant’s interest can sever the joint tenancy on default, but only if the default occurs during the life of the joint tenant that used his interest as security.

Accounting: A co-tenant who leases all or part of the premises to a third party must account to his co-teannts, providing them their fair share of rental income.

An occupying cotenant cannot be charged rent unless they have denied the other cotenants (ouster).

Each cotenant is responsible for his or her fair share of the premises’ carrying costs, such as taxes or mortgages payments.

TENANCY BY THE ENTIRETY

Recognized in 21 states and available only to married couples. Each tenant enjoys rights of survivorship. Same four unities are required, plus the fifth unity of marriage. Terminated by divorce or death.

o At divorce, a tenancy by the entirety is converted into a tenancy in common. o Under modern law. Property is divided by the court in it discretion with a

presumption of equal division o At death

Forced Share (Elective Share) – entitles spouse to disclaim property under will and to take 1/3 to ½ property (baseline for drafting will) (default provision – you give up your right under will if you take election)

States that recognize the tenancy by the entirety, it arises presumptively in any conveyance to married partners, unless stated otherwise.

o A unilateral conveyance by only one spouse is null. A tenancy by the entirety is not reachable by creditors, including judgment creditors.

o See Sawada v. Endo

PARTITION

o Parties can amicably and peacefully end their joint tenancies or tenancies in common.

Rather than selling their interest in the property, parties can petition the court to partition the property

o Through a partition in kind, the court orders a physical division of the property if it’s in the best interest of all the parties.

o Partition by sale: Courts can also order a sale of the property, leaving the parties to split the proceeds proportional to their contribution.

Usually for a property that does not lend itself to physical division. See Delfino v. Vaelencis, where the court allowed a partition by sale

only because a partition in kind was unworkable. o Owelty: when courts order one party in a partition to pay more consideration

due to inequality in the division of the land.

LANDLORD-TENANT LAW

TYPES OF LEASES

Term of Years: endures during a designated period. The lease automatically expires when the agreed period ends. No notice of termination is required.

o Need not be years, but could be days, weeks, months etc.o A term of years longer than one year must be in writing, in accordance with the

statute of frauds. Periodic Tenancy : Leasehold interest that continues for successive or continuous

intervals, until either landlord or tenant gives proper notice of termination. o If the lease does not stipulate the length of the lease term, the initial term’s

length will conform to the frequency of the rent payments.o Express notice is required to terminate the periodic tenancy. Generally, either

party can terminate a periodic tenancy by giving notice at least equal to the length of the tenancy, stating the termination date

o Can arise by implication in one of three ways: 1. When a land is leased with no mention of duration, but provision is

made for the payment of rent at regular intervals. 2. When an oral term of years that violates the statute of frauds creates

an implied periodic tenancy, measured by the way the rent is tendered. 3. When the tenant wrongfully stays on premises past the conclusion of

the original lease, measured by the way rent is presently tendered (holdover).

Tenancy at Will: A tenant with no fixed period or duration. It lasts as long as either landlord or tenant desire.

o Continues only by mutual agreement, and either party theoretically has the right to terminate at any time.

o Most states require reasonable notice for termination of tenancy at will. o This is terminable by death of either party. o Terminable by assignment by tenant to a third party.

Holdovers: Tenancy at sufferance : Created when tenants remain in possession after their right to do so has expired.

o In this situation the tenant’s entry on to the property was rightful, but their continuing to stay was wrongful.

o The landlord may chose to evict the tenant as a trespasser May oust at any time. In some jurisdictions, must be done through the court. Once the landlord elects to treat the tenant as a trespasser, the landlord

cannot change his mind and try to extend the lease.o The landlord may elect to treat the tenant as having renewed the lease on the

same conditions. An issue arises about the length of the term. Some jurisdictions consider

the renewed lease to be the same duration as the original lease. In most cases, this results in a periodic tenancy.

Term Termination/ Expiration How Created?

Tenancy for Years Set period

- Automatically at end of set period (no notice req’d)

- Surrender & Acceptance

- breach of dependant covenants; constructive eviction; breach of implied warranty of habitability

- illegal use of premises

Generally, by written document

(SoF)

Periodic Tenancy

Initial set period, then period to

period until notice of termination is given

End of period (notice required: year – 6 mo.

Less than year – full period, not to exceed 6 mo.)

- Express agreement

- Implication (lease w/o termination date but includes periodic rent)

- Operation of law (holdover or invalid lease)

Tenancy at WillNo fixed period (at

will of parties)

- at will of either party (some notice req’d by some statutes)

- LL or T dies

- T commits waste

- either party transfers interest in property

- Express agreement

- Implication (operation of law)

Tenancy at Sufferance

Holding over usually creates a periodic

See periodic tenancy above Holdover

tenancy (measured by way rent is

computed)

LANDLORD DUTIES

Landlord has four principal responsibilitieso Convey to tenant the legal right to take possession of the premises for the term

American Rule: requires the landlord to only deliver legal possession, not actual possession. The tenant must evict the holdover tenant and any trespassers

English Rule: The duty is on the lessor to oust the holdover tenant and any trespassers on the property at the beginning of the lease

o Satisfy the implied covenant of quiet enjoyment The landlord promises the tenant shall have quiet and peaceful

possession of the premises for the term. Landlord assures that no action or interest will deprive the tenant’s

quiet enjoyment of the premises during the term of the lease. When the landlord has breached the covenant of quiet enjoyment, the

tenant has two options: Stay in the leased unit and sue for damages Vacate the premises and treat the breach as a constructive

eviction. Actual Total Eviction: A tenant who has been totally ousted from

physical possession of the leased premises—whether by the landlord or someone of better title than the landlord—no longer is obligated to pay rent and may elect to terminate the lease

Actual Partial Eviction: Traditionally, actual physical ouster of the tenant from an part of the premises relieves the tenant of the obligation to pay any rent at all until and unless the tenant is restored to possession of the entire leasehold property. True even if the tenant remains in possession of the rest of the party.

Constructive Eviction : failure or interference on the landlord’s part with the tenant’s intended enjoyment of those premises in such a way that the tenant is deprived of the enjoyment of those premises.

Elementso Intentional acts of the landlord that breach a duty owed

to the tenanto Those acts are the cause of a substantial interference

with the tenant’s enjoyment of the premises, or render it unfit for the purpose for which it was leased

o The landlord is given notice of the defect and has been given adequate time to correct it.

o The tenant vacated the premises within a reasonable time after the landlord’s actions.

Legal standard for landlord interference: Substantial and permanent interference with quiet enjoyment

that renders the premises unfit for the purposes the were leased for.

o Satisfy implied warranty of habitability in residential leaseso Refrain from breaching the doctrine of retaliatory eviction.

At common law, the landlord had few duties.o Caveat Lessee: Lessee beware. The premises are leased as is. o Traditionally, the landlord had no implied obligation to warrant that property is

suitable for the intended purposes of the tenant, so long as the tenant has a reasonable opportunity to examine the property.

o Exceptions to Caveat Lessee Short-term leases of furnished dwellings Landlord has a duty to disclose latent defects Maintain common areas Undertake carefully repairs promised or volunteered Abstain from fraudulent misrepresentation as to condition Abate immoral conduct that occurred on property if it affected the

leased premises Today, there is a modern trend to requiring that residential leases carry a warranty of

habitability. o The implied warranty of habitability requires that the landlord deliver the

premises in a habitable condition and maintain it in that condition during the lease term.

o Not a terribly high standard, but must meet the basic living requirements. Appropriate standard may be supplied by housing code or independent

judicial conclusion. o When a landlord has breached the implied warranty of habitability, the tenat

has four options available Move out Repair the defect and deduct the cost of repairs from rent Reduce rent in the amount equal to the fair rental value of the premises

in view of their defects Remain in possession and affirmatively sue the landlord for damages

Can be compensatory or punitive (where the conduct of the landlord was willful, wanton and fraudulent).

Illegal Lease: Bridges the gap between implied warranty of habitability and the doctrine of constructive eviction. It is a lease that the landlord knows is not habitable and is in violation of local housing codes at its inception.

o An illegal lease has no binding effect, so the tenant need not pay rent and may remain in possession.

o Not waivable.

TRANSFERS OF LEASEHOLD INTEREST

Most modern leases restrict the tenant’s right to transfer all or part of the leasehold interest. If landlord retains discretion, he must exercise discretion with good faith and fair dealing. See, e.g., Kendall v. Ernest Pestana, Inc. (covenants against transfer of lease will be strictly construed against landlord). However, the landlord is typically able to transfer his interest (a reversion) freely. The landlord’s reversion is made subject to the outstanding lease (i.e. the transferee is in privity of estate with the tenant, and all the real covenants benefit the transferee from that time forward).

ASSIGNMENT

Transfer of the Entire Term for the Entire Space (assignment of portion is called assignment pro tanto) on same terms as original lease but for a reserved right of entry upon breach of other terms

An assignment creates a triangle of relationships among the original lessor, the original lessee who transfers her right (the assignor), and the person who receives the right (the assignee). Privity of contract continues between the lessor and the assignor; privity of contract created between the assignor and assignee; and privity of estate arises as a matter of law between the lessor and the assignee.

Assignor (original lessee) remains liable to the original lessor for all covenants in the original lease, because they remain in privity of contract, absent a novation. The privity of estate between the lessor and assignee requires both of them to perform those covenants in the original lease that “run with the land,” and, as a practical matter, most lease covenants do so run. For example, suppose that A leases to B who assigns to C. If no one pays rent to A, both B and C are liable.

SUBLEASE

A sublease is anything less than an assignment. A sublease creates a new landlord-tenant relationship (between sublessor and sublessee). Suppose A leases to B, and B (as sublessor) leases to C (as sublessee). Privity of contract and privity of estate remain between A and B; privity of contract and privity of estate arise between B and C.

The sublessor (original lessee) remains liable to the original lessor for all covenants in the original lease. Similarly, the sublessee is liable to the sublessor for the covenants in the sublease. However, the sublessee has no obligations to the original lessor. The original tenant (sublessor) remains liable for rent as a surety, and may recover rent paid from sublessee under the principle of subrogation.

DUTIES OF THE TENANT

Tenant has duties to keep the premises in reasonably good repair and not commit waste.

Tenant also has a duty to pay rent.

TENANT WHO FAILS TO PAY RENT

- Eviction – the rule is self-help is okay as long as no breach of the peace. Force entry is no good; some states say no lock outs. See, e.g. Berg v. Wiley (p.403) (no self help; requires resort to judicial process)

- Summary Proceedings (forcible entry and detainer statutes) – a quick and efficient means by which to recover possession after termination of a tenancy (usually only requires a few days’ notice to tenant prior to bringing eviction action). Sole issue for bench trial is who has the right to possession.

- Sue for rent and damages

THE TENANT WHO HAS ABANDONED POSSESSION

Abandonment – occurs when the tenant (1) vacates the premises without justification, (2) lacks the present intent to return, and (3) defaults in the payment of rent

Three options:

1. Landlord can do nothing and sue periodically or at end for all the rent (watch out for duty to mitigate, however)

2. Landlord can relet for the tenant’s account (notice required) – down market (recover balance from original tenant)

3. Landlord can accept surrender and relet for own account.

>> Sommer v. Kridel (p.410)

- whether a landlord seeking damages from a defaulting tenant is under a duty to mitigate damages by making reasonable efforts to re-let an apartment wrongfully vacated by the tenant

- old law: no duty to mitigate- new law: duty to mitigate (contract view) (e.g. duty to attempt to re-let)- duty to mitigate for residential – hit to individuals is seen as a greater hit than against businesses

under commercial law