#11270 - Landlord And Tenant - Property

The L-T relationship has features both of a conveyance of interest in land AND a contract containing mutual promises between the parties. Originally, a lease was treated as a plan contract, but in recent centuries property theory dominated L-T law, until World War II. Since then, L-T law has again been governed more and more by contract theory.

Traditionally, L-T treats the relation as a sale of a leasehold, payable at the beginning, end, or installments agreed between the parties. The tenant had the exclusive right to the premises and the duty of maintaining them. L had the right to reenter and repossess only if T breached a covenant of the lease.

At CL, the covenants in the lease were independent; both parties were bound by their promises independent of the other party’s performance. If one fails to perform, it does not entitle the other to break the lease.

Modern law treats the lease as a contract governing the relationship between L and T. Each party is obliged to fulfill his obligations only so long as the other party fulfills his own.

1. Types of Tenancies

   1. Term of Years

A tenancy for a term of years is just a tenancy measured by a fixed start and end date.

A term of years may be made determinable, i.e. it ends automatically on a given end date but may end earlier upon the failure of a condition of its duration.

A TOY for one year beginning “from July 1” begins at 12:01 AM on July 1 and ends at midnight on June 30 next year.

A TOY expires at the end of the term, with no further notice required.

1. Periodic Tenancy

A PT is measured in periods of fixed duration which renew automatically until one party gives notice of termination.

A PT may be created explicitly, but more commonly it results when L and T sign a lease fixing the rent period only without specifying the end date.

Where T holds over after expiration of the term, L may consent and hold T liable for another term.

A party must give notice of termination one full rental period in advance, or else he is liable for the next period.

• Exception: if the PT is year to year, the terminating party must give six months’ notice.

• If a PT specifies annual rent to be paid in monthly installments, CL held that the PT was year to year. A minority of jurisdictions call it month to month.

• The parties may agree to different notice terms.

• Notice may only be given to terminate the lease on the last day of the period. So if notice is given on January 20, it only serves to terminate the lease on February 28, not February 20.

  1. Tenancy At Will

TAW is a tenancy of no stated duration and no stated period which survives as long as both L and T desire and which is terminable by either party.

Where a lease states that just one party has the right to terminate at will, courts are split:

• Some hold this to imply that the other party may terminate as well.

• Where T is the party with the power of termination, other courts hold that T holds a determinable life estate. See: Garner v. Gerrish.

At CL, a TAW could be terminated at any time. Most states now require 30 days’ notice to terminate.

A TAW is not assignable and terminates if either party attempts to assign it.

1. Holdovers

A T who enters rightfully but wrongfully remains is called a tenant at sufferance. He is neither a rightful T nor a trespasser. A tenancy at sufferance survives until L evicts the tenant or elects to renew the lease. I if L elects to renew, he can hold the holdover liable for a full renewal of the term of the prior lease.

At CL, there was no excuse for holding over. Modern courts may forgive a holdover if he is held over by circumstances beyond his control.

In most jurisdictions, a holdover gives rise to a periodic tenancy, while in the rest it gives rise to a term of years equal to the prior term of years.

1. Landlord’s Duty to Deliver Possession

The landlord always has the duty to deliver the legal right to possession. In leasing the premises, L warrants that he has this right and can transfer it. If a third party has paramount title, L is in default.

If T learns after signing the lease but before entering that L does not have PT, L may terminate the lease. But if he knows L does not have PT and signs the lease anyway, T is held to waive the possibility of eviction by the holder of PT.

If T learns L lacks PT after taking possession, T has no remedy until he is actually evicted or his right to enjoyment of the premises is otherwise interfered with.

English Rule (majority): L has a duty to deliver both legal right to possession and actual possession. If a holdover has not left when the next T’s lease begins and L does not take action to remove him within a reasonable time, L is in default.

• T may terminate the lease and recover damages for having to find a new lease. T can affirm the lease but refuse to pay rent for the portion he is excluded, and recover damages. If T acts on his own to oust the holdover, he can recover damages for the cost of doing so.

American Rule (minority): L has no duty to deliver actual possession, only the legal right to possession. T must take action on his own to evict the holdover.

• T may sue to evict the holdover and recover damages for the cost of eviction, the lost time seeking lodging elsewhere, and rent paid to L during the holdover period.

Policy: Though it might make sense not to hold L liable for the tortious acts of a third party to the transaction, normally L is in a better position than T to ensure the premises can actually be conveyed.

1. Landlord’s Duty Not to Interfere with Tenant’s Quiet Enjoyment

   1. Covenant of Quiet Enjoyment

The covenant of quiet enjoyment is implied in every lease, regardless whether it is expressly provided.

While lease covenants were independent at CL, the CQE was the glaring exception:

• T’s covenant to pay rent was dependent on L’s satisfaction of the CQE!!

• If L breached the CQE, T no longer had to pay rent.

  1. Actual Eviction

T’s rental obligation ends when he is evicted from the entire premises, whether by L or a holder of PT. The lease is henceforth terminated and T released from all further obligations. He may collect damages from L for breach.

If T is partially evicted from any portion of the premises by L, T’s obligation to pay rent is abated until possession is restored to him. T may retain possession of the rest of the leasehold.

• Policy: This remedy protects T from having to go to court to get damages for his loss of possession. Giving T the right to terminate might also be a hollow victory for a T who now has to suffer the inconvenience of finding other quarters.

• The Restatement rejects this rule, and instead gives T partial abatement and the right to damages and termination.

If T is partially evicted by a holder of PT, he may terminate, recover damages, or receive a proportionate abatement. He may not receive a full abatement, as he would if he were partially evicted by L.

1. Constructive Eviction

Construction eviction occurs where some act or omission by L substantially interferes with T’s use and enjoyment of the premises, so the T cannot use the premises as contemplated in the original lease.

If this happens, T is entitled to terminate the lease, vacate, and be excused from further rent liability.

Constructive eviction doctrine was used by courts to expand the right of T to withhold rent where he doesn’t get the lease that he bargained for, even though he does not lose actual possession of the premises.

Note that the T does not have the right to retain possession and withhold rent, as in actual, partial eviction.

Substantial Interference is measured objectively. The court will consider:

• The purposes for which the land was leased;

• The foreseeability of the interference;

• The potential duration of the interference;

• The nature and degree of the harm; and

• The availability of means to abate the interference.

If L is aware of latent defects in the premises prior to leasing them, he has a duty to disclose them.

If T is aware of defects and signs the lease anyway, he waives the right to claim interference.

T must give notice of the interference to L and give L a reasonable opportunity to remedy the situation before T has the right to terminate for CE.

In addition to termination, T may seek damages for the decreased rental value, expenses, lost profits, etc.

To claim CE, the interference must result from some wrongful act or omission of L.

As a general rule, the actions of T1 which interfere with T2’s enjoyment do not amount to constructive eviction.

• Exceptions: where T1 creates a nuisance on the premises, L has a duty to stop him.

• L also has a duty to control common areas, and will be blamed for interferences which arise from conduct in those areas.’

Modern trend: Ls are more likely to be held to a duty to police the conduct of Ts on their premises.

1. Landlord’s Duty to Provide Habitable Premises

At CL, the rule was caveat lessee: T was obliged to inspect the premises and L was not liable for the quality or condition of the leasehold. Exceptions:

• Furnished House for Short Term

• Hidden Defects (which are known to L and not easily discoverable)

• Common Areas

• Buildings Under Construction (which T would not have an opportunity to inspect before taking possession)

Even if there is an express warranty of habitability, it is subject to the independent covenants rule. T may not stop paying rent if L breaches the covenant. T must instead sue L for damages. At CL, if T wanted to terminate, he had to prove constructive eviction.

Modern trend: many jurisdictions now...