Leases: Also known as leasehold, tenancies, the term of years, or landlord-tenant interest. A central assumption is that the lease was a conveyance of a possessory interest in property, including the right to exclude others. Three aspects of leases that account for their enduring appeal:

Leases are a type of defacto financing device. A lease can be thought of as an arrangement in which the owner of the property lends possession to another, in return for periodic payments of money called rent.
Operate as a risk-spreading device. Renting is a way of minimizing the risks of investing in an asset that you might want to unload in a fairly short time period.
1. Also a risk spreading device for the landlord as well: if the landlord defaults on the rental obligation, it is usually easier to retake possession of the property than it is to foreclose on a mortgage and retake property held as security for a loan.
Leases operate as a mechanism for integrating and managing complexes of assets, and in that sense function as a kind of entity property.

	Description	Termination
Term of Years	Has a fixed time at which it terminates or ends	Neither landlord or tenant has to give notice, on stated day of termination, lease ends
Periodic Tenancy	Automatically rolls over for a stated period of time	Each party must give notice to each other if they want to terminate the lease
Tenancy at Will	Only last as long as parties wish it to continue	Either party can terminate at any time for any reason. Jurisdictions split over whether notice is required
Tenancy at Sufferance	Individual, who was once in rightful possession, holds over after the right has ended	Landlord is free to evict, however if tenant at sufferance gives landlord a check, courts have considered it an implied contract to create a new lease (usually periodic tenancy) [Crechaele & Polles v. Smith)

Independent Covenants Model of the Landlord-Tenant Relationship: All covenants must be performed without regards to whether other covenants have been or can be performed (Paradine is an example).

Most jurisdictions operate under a dependent covenants model now
- Pretty widely accepted that if a landlord breaches the covenant of quiet enjoyment the tenant does not have to pay rent [dependent covenant model]
Most important covenant by the landlord is the covenant of quiet enjoyment: a promise not to interfere with the tenant’s possession of the land during the term of the lease [covenant was not breached in Paradine because Prince Rupert was not an agent of the landlord]
- It is implied as a matter of law in all leases
Most important covenant by the tenant is the covenant to pay rent
- Also implied as a matter of law in all leases
CANT stop performing your covenant because the other has breached theirs
- Remedy in these situations is for the aggrieved party to sue for breach of covenant

Paradine v. Jane: Tennant says he is not in possession because he keeps getting driven out by Prince Rupert making it impossible for him to plant crops and enjoy the benefits of the lease. He refuses to pay rent. Court says that it does not matter, still have to pay rent.

If the lease would have never happened, it would have been the landlord’s issue, but a lease essentially transfers these issues (and legal rights)

Tennant bears both the upside and the downside risks/benefits when he enters into a lease
- This also implies the default rule of risk of casualty loss transfer – technically, tenant bears burden of property being destroyed in earth quake, fire, storm, etc.

Some jurisdictions have held that impossibility and frustration of purpose may relieve a tenant of his obligations once the premises are destroyed
Others have legislation around this rule. But casualty loss to the tenant is usually the default rule.

Landlord performed in this case, he gave the tenant a real estate interest
Paradine reflects the view that a lease is a conveyance of an interest in land (A REAL ESTATE INTEREST), but it also reflects the view that a lease is a contract – a bundle of covenants or promises, some running from landlord to tenant, others from tenant to landlord

Smith v. McEnany: CASE IS ABOUT PARTIAL EVICTIONS. Landlord built a brick wall that encroached about a foot upon the property that tenant had leased.

Wrongful eviction of the tenant by the landlord suspends the entire amount of rent under the lease [Courts are divided as to whether rent should be prorated since he only lost part of the land]
- UNLESS the encroachment is “deminimis”: FORK: what is deminimis? The wall only encroached a couple of feet here
Court says that it does not matter the degree to which the land was wrongfully eviction, any such eviction completely absolves the tenant from paying rent [until such is remedied? Does the land owner have to actually leave land?]
- However this does not mean the tenant is absolved from other covenants, such as the covenant to repair

If the tenant cannot take possession because the landlord is still in possession, or because a third party acting under a paramount title given by the landlord (like a previous tenant whose lease has not yet expired), these are treated like wrongful evictions

What if a squatter or a holdover tenant (prior tenant whose lease has expired) is in possession? Divided:
- English Rule: landlord is responsible for clearing out any squatters or holdover tenants at the beginning of the lease (Assume then that a failure to do so would be a wrongful eviction)
- American Rule: tenant is responsible for getting rid of any squatters or holdover tenants

Seems like the rule use should be based on who is best able to detect the presence of squatters or holdover tenants and bring actions to have them evicted before the lease starts
- In context of rentals of urban apartments, that party is probably the landlord (because the landlord probably lives on the property or has a manager on the property, is familiar with the leasing history, and has some familiarity with eviction procedures)
- In the context of rural agricultural land, the tenant is likely to be a local resident and the landlord is often an absentee owner. Tenant may be in a better position here to monitor for squatters and hold over tenants and take action to evict them

Sutton v. Temple: IMPLIED “WARRANTY OF SUITABILITY?” Tenant had leased some land to raise cattle. Her cattle kept dying on the land, come to find out it was because there was paint in the grass that they were eating. Tenant stops paying rent, asserts that landlord breach an implied warranty that the land would be suitable for the tenant’s purpose.

There is no such implied warranties in lease agreements, land is essentially leased “As-is” if there was an implied warranty that land would be fit for the lesee’s purpose suits that could arise would be endless. Sutton v. Temple stands for “caveat lessee” – tenant beware – there is no implied warranty that the leased premises will be fit for the tenant’s intended purpose.
- Outcome is different if they knew about the defect, fraud (look up)

Seems like this is an easy Paradine v. Jane application – tenant absorbs the risks with tenantship.
- However, Paradine did not apply in the case of Smith v. Marrable, because in that case the lessee did not have an opportunity to inspect the premises, so landlord was in the best position to clear any misunderstanding (furnished house)
  - As opposed to this case, where tenant has inspected and lessor might not know much about the land, the lessee is in the best position to know about the land

Forfeiture Clauses: Clause in a lease that provided that upon the tenant’s violation of enumerated covenants in the lease-most crucially the covenant to pay rent-the tenant’s interest in the ease would be immediately forfeited. Essentially converts the independent covenants model into dependent covenants. Two forms:

Lease forfeits automatically upon violation of specified covenants by the tenant
Violation of specified covenants by the tenants authorizes the landlord to “Reenter and retake” the premises

Forfeiture clauses had the effect of tilting the original independent covenants model in favor of the landlord in that they transformed the lease into a bundle of independent covenants as the promises ran to the tenant, and dependent as the promises ran to the landlord.

Legal system responded by providing doctrines that provided some relief for tenants: constructive eviction and surrender

Blackett v. Olanoff Landlord leased a premises right next to tenant’s that was used as a cocktail lounge that produced late evening and early morning music and disturbances. Landlords argue that they did not violate the tenant’s covenant of quiet enjoyment because they are not responsible for the noise from the lounge

Had it within their control to correct the condition, landlords introduced a commercial activity into an area where they leased premises for residential purposes.

Court rules it to be a constructive eviction: seriously interfering with the covenant of quiet enjoyment of the property essentially rendering it unusable. [constructive eviction can also be the failure to act as a breach of a specific duty in the lease] [objective or subjective test? What if you are using the premises for a particular purpose?]
- If...

#11373 - Landlord And Tenant - Long Merril & Smith Property Outline

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