Landlord Tenant Relationship

A typical landlord-tenant relationship gives the tenant a present possessory interest in the
premises, while the landlord holds a reversion. In general, the interests of both landlord and tenant are
freely transferable. The parties may, however, limit their abilities to transfer as part of the lease
agreement.

A lease is both a contract and conveyance; under such an agreement there are rights and
obligations based upon the relationship of landlord and tenants as well as upon the contractual
promises. It is well recognized that no particular legal terminology is required in the making of a lease,
but it is essential that the instrument show an intention to establish the relationship of landlord and
tenant.
1. A lease MUST include a 1) definite description of leased property you are going
to use, and 2) agreement of payment to be paid at particular times during a
specified term.
Creation of a Lease
License vs. Lease ( depends on the objective intent of the parties)

License

If an agreement clearly intends to create a licensor-licensee relationship, or if it does not

give exclusive possession nor an interest in property beyond a personal right of
operation it cannot create a landlord-tenant relationship.

You take your lease as you find them unless stated otherwise
A lease is an encumbrance on real property. Like most other encumbrances, such as mortgages,
easements, or liens, a purchaser takes the property subject to an existing lease unless the purchaser
lacks sufficient notice of the encumbrance.

Three of the major forms of notice are actual notice, record notice, and inquiry notice.
Actual notice occurs when the purchaser has subjective knowledge of the encumbrance, however
acquired.

Record notice occurs when the encumbrance is contained in a recording system as

required by law. In such cases, the encumbrance could be found by a search of the records.
When an encumbrance is recorded, purchaser is deemed to have notice, regardless of whether
the purchaser actually conducts a search of the records.

Finally, inquiry notice arises when circumstances would prompt a reasonable purchaser
to investigate further, to determine whether there are any preexisting interests in the property.
Such circumstances give rise to a duty to inquire, and the purchaser will be charged with
knowledge of any facts that a reasonable inquiry would have revealed, regardless of whether
the purchaser actually investigates. Circumstances that could trigger a duty to inquire include
references in recorded deeds to prior unrecorded deeds, or possession of the property by
someone other than the grantor.
Discrimination
A landlord may not discriminate against future tenants Under the Civil Rights act and the Fair
Housing Act.

Under the Civil Rights act which bars racial or ethnic discrimination.

Fair Housing Act, which bar discrimination based on ethnicity, religion, national origin, gender
and disability as well as discrimination against families with children (except in senior housing).

Exceptions
The act does not apply to religious organizations, private clubs, and owners who have
no more than 3 single- family dwellings, or have an owner occupied apartment with no
more than four units.

Senior housing can exclude future tenants based on age, and families with children.
Applying the Fair housing act
Under the fair housing act, a landlord must permit disabled tenants to make reasonable
modifications to the existing premises to accommodate their disability ( at the tenants expense).
Landlords must also make reasonable accommodations in rules, policies and services when
necessary to afford a disabled person and equal opportunity to use a dwelling.

Duties of Tenants/ liability

Duty to pay rent- Generally, a tenant has a duty to pay rent at the time specified within the
contract, if the contract fails to specify; under common law rent is owed at the end of the lease
term. This duty ends if the tenant effectively surrenders the property back to the landlord.

Proportionate amount- Majority of states have statutes that if the lease terminates
before the time originally agreed upon, the tenant must pay a proportionate amount of
the agreed rent.

Deposits-

Generally most states, restrict the amount of a security deposit to one month’s
rent, requiring landlords to pay interest on security deposits, and allow
statutory or punitive damages for landlord’s improper refusal to return a
security deposit. Any clause within the lease that attempts to avoid these state
laws, are void.

Landlord is not permitted to retain a security deposit beyond the damages

actually suffered.

Eviction:

If a rent is denominated a “bonus” the landlord can retain it after the tenant is
evicted.
 Duty not use premises for Illegal purpose

Landlord may terminate the lease, obtain damages, or seek injunctive relief if the tenant uses
the property for an illegal purpose. ( occasional unlawful conduct does not breach this duty)

Duty to Repair

1) Doctrine of waste- The tenant has a duty not to damage ( waste) the property.
Waste can be in the form of,
1)voluntary ( affirmative – where a tenant intentionally or negligently the
premises, or minerals on the property ) waste,
2) Permissive ( tenant fails to make reasonable steps to protect the premises
form damage from the elements. ( liable for ordinary repairs, excluding
ordinary wear and tear. If the duty is shifted ( expressed in lease) to the
landlord- the tenant has a duty to report deficiencies.)
3) Ameliorative waste- where the tenant alters the leased property, increasing
the value, - the tenant is liable for the cost of restoration.
- most states allow an exception to this waste, where there is a long-term
tenant that makes a change reflecting the changes in the neighborhood.

No waste involved if: 1) without fault of either the landlord or the tenant the premises
are destroyed.
Absent language in the lease contrary, neither party has a duty to restore the
premises, however the tenant has a duty to continue paying rent. Most states via
statute or case law allow the tenant the option to terminate the lease in this situation
despite the presence of an explicit covenant to repair.

Duties of Landlord/ liability

Duty to deliver possession of premises- landlord must deliver actual possession, at the
beginning of the lease or he will be in breach.

Implied covenant of quiet enjoyment-

Every lease has an Implied covenant of Quiet enjoyment that neither the landlord nor a
paramount title holder will interfere with the tenant’s quiet enjoyment and possession of the premises.
This covenant may be breached by 1) Actual eviction, 2) Partial eviction, and 3) Constructive conviction.

1) Actual eviction occurs when the landlord, a paramount tittle holder or a hold- over tenant
excludes the tenant from the entire leased premises. Actual eviction terminates the
tenant’s obligation to pay rent.
2) Partial Eviction occurs when the tenant is physically excluded from only part of the leased
property. Partial eviction by the landlord relieved the tenant’s obligation to pay rent for the
entire premises, even though the tenant continues to remain in possession of the
remainder.
 3) Constructive eviction occurs when the landlord’s breach of duty renders the property
unsuitable for occupancy. To establish a claim under constructive eviction the tenant must
prove:
a. The landlord breached a duty to the tenant
b. The breach substantially and materially deprived the tenant of her use and
enjoyment of the premises
c. The tenant gave the landlord notice and a reasonable time to repair, and
d. After such reasonable time, the tenant vacated the premises.

Essay Constructive eviction-

When a landlord substantially interferes with the tenant’s use and enjoyment of the property
by breaching a duty to the tenant, the tenant’s obligation to pay rent may be excused under
the theory of constructive eviction. In order to end a lease before the end of its term by
constructive eviction, the landlord must have breached a duty, which caused the loss of the
substantial use and enjoyment of the premises, the tenant must give the landlord notice of
the problem and reasonable opportunity to cure, and the tenant must vacate the property
within a reasonable period of time. Not every interference with the use and enjoyment of
the premises amounts to a constructive eviction. Temporary or de minimis acts which do not
amount to a permanent expulsion generally do not amount to constructive eviction.

Implied Warrant of Habitality ( only applies to residential)

Most Jurisdiction apply a covenant of habitability to residential leases. This warranty is

nonwaivable. The landlord’s duty is tied to standards of local housing codes. In the event of a breach
the Tenant may 1) Terminate the lease, 2) make repairs and offset the cost against future rent, 3) abate
the rent to the amount equal to the fair rental value in view of the defects, or 4) remain in possession,
pay full rent, and sue for damages.

Landlords Duty to repair ( commercial- no duty, no implied warrant of habitability, residential- Majority
rule- enforce an implied duty to repair even when the lease attempts to place on the tenant, Common
law- no duty to repair)

Under the common law, there was no implied duty on the part of the landlord to repair leased
premises. However, the majority of jurisdictions today enforce an implied duty upon the landlord to
repair under a residential lease, even when the lease attempts to place the burden on the tenant,
except for damages caused by the tenant. In contrast, courts are reluctant to imply a landlord’s duty to
repair in commercial leases because the implied warranty of habitability does not apply in commercial
leases. Here, it is not clear what language was in the lease regarding repairs, but absent any specific
duty in the lease to fix the air conditioner, the landlord was likely not required to make any such repairs.

 Must give 48 notice prior to inspecting the property, can not go through drawers.
 Duty to Mitigate Damages

The majority of jurisdictions now require a landlord to mitigate damages by attempting

to re-rent the premises in the event that the tenant abandons the property and
breaches of the lease. Accordingly, the landlord has a responsibility to make a good-
faith attempt to re-rent the property.

Furthermore, the doctrine of anticipatory breach does not apply to leases. While the
landlord may sue the tenant for rent as it becomes due, a landlord may not sue for
future rent under the lease.

Acceleration clause-

Personal Injury

The general rule was that the landlord was not liable for personal injuries, Recently the
landlord's liability has expanded greatly in personal injuries, and generally lessors are liable for personal
injuries suffered on the leased premises.

A landlord is subject to liability for physical harm caused to the tenant or is subtenant by
a dangerous condition existing before or arising after the tenant has taken possession, if
he has failed to exercise reasonable care to repair the condition and the existence of the
condition is in violation of

1. An implied warranty of habitability; or

2. A duty created by statute or administrative regulation.
Residential Rental Property Act, which requires landlords to
maintain rental units in a safe, sanitary, and habitable condition.

A landlord may be liable for a tenant’s injuries caused by a third party’s criminal
conduct if the landlord failed to provide adequate security for the common areas of
the building.

Assignments and Subleases ( depends on the intent of the parties)

If a commercial lease allows assignment or sublease only upon the landlord’s consent, and the lease
does not expressly state that a landlord may withhold consent for any reason, a landlord may not
arbitrarily or unreasonably withhold consent (violates the owner’s right to Exclude, violation of the 5th
amendment)

Assignments is where the tenant transfers ALL if the tenants rights under the lease. Subleases- is where
the tenant transfers LESS THAN ALL of the tenants interests. Generally, a tenant can assign or sublet to
another even if the landlord had precluded such unless the landlord has a good reason. The landlord
can specify in the lease that agreement that assignments and or subleases may only be permitted with
the approval of the landlord.
Privity of Contract
Privity of Estate - Successive or concurrent interest in the same property, such as between a
landlord and tenant or grantor and grantee.
Breach
Remedies to landlord-
A court hearing a breach-of-lease case may not award damages based on the
full lease term before the end of the lease term.
Landlord has a duty to mitigate damages, judged from an objective
standard. D
Remedies to Tenant
A tenant is entitled to compensation when the exercise of eminent domain
reduces or eliminates the tenant’s leasehold interest. If the entire property is
condemned, the lease is extinguished and the tenant is entitled to compensation for the
loss of the leasehold estate. If, on the other hand, only a part of the leasehold is
condemned, then the lease continues in effect, and the tenant is entitled to a share of
the condemnation award as compensation for the partial loss.

Termination of a lease

Termination of a lease occurs automatically upon the expiration of the term. Termination may
also occur before the expiration of the term when the tenant surrenders the leasehold, and the
landlord accepts the return of the leasehold.

Expiration of term-

Tenancy for years- is a lease fixed for a period of time, which automatically terminates
at its termination date.

Landlord may terminate under the right of entry, if the tenant breaches any of
the lease’s covenants;

1) failure to pay rent

2) surrender – if the tenant surrenders the tenancy and the landlord

accepts.

( if unexpired term exceeds one year, the surrender must be in

writing – SOF)

Periodic tenancies (month to month)

A periodic tenancy can be created via an express agreement ( writing), by

implication – ( monthy payment without writing or express agreement) , or by
operation of law ( staying past the term) and it continues for successive periods,
being automatically renewed, until terminated by proper notice, usually notice
must be one full period in advance,

For a year to year lease, 6 months notice is required

Tenancy at will-
 A tenancy at will must be created with an express agreement that the lease can
be terminated at any time, absent such agreement rent payments will cause the courts
to treat the lease as periodic tenancy.

Where a lease gives only the landlord the right to terminate, a similar
right will be implied for the tenant.

Where a lease gives only the tenant a right to terminate a similar right
will not be implied for the landlord.

Tenancy at sufferance

Tenancy at sufferance exists where a tenant wrongfully remains in possession after the
expiration of the lawful tenancy. This tenancy lasts only until the landlord takes steps to
evict the tenant. No notice is required.

Abandonment

When a tenant abandons the leasehold without justification, the landlord may treat the
abandonment as an offer of surrender and could accept that surrender by retaking the premises,
or the landlord may attempt to re-rent the premises on the tenant’s behalf and hold the tenant
liable for any deficiency. Majority view, the landlord has a duty to mitigate damages and relet
the premises.

Acceptance of surrender

If the Landlord does not accept the surrender, the tenant is liable for the difference
between the promised rent and the fair rental value.

If the Landlord does accept, or landlord himself resumes possession, then the tenant is
not liable.

When the Landlord breaches a duty of Implied warranty of Habitality ( only applies to
residential ) the tenant may terminate the lease.

When the landlord breaches a covenant of Quiet Enjoyment, and the tenant can prevail under a
constructive eviction theory, the tenant may terminate the lease.

When the tenant does not pay rent under the modern trend, ( majority) the landlord has the
right to terminate. The landlord may bring a suit for rent or may evict the tenant under the
state’s unlawful detainer statute. Under common law, the landlord may not terminate lease,
and may only sue for damages.
 Landlord may terminate the lease, or obtain damages and injuctive relief if the tenant uses the
property for an illegal purpose.

Most state allow that a tenant may terminate a lease where the property is destroyed without
fault of the tenant or the landlord, under statutory law or case law.

May NOT terminate a lease, or otherwise penalize a tenant in retaliation for the tenant’s
exercise of her legal rights. ( reporting building code violations, etc) Under the majority view, a
presumption of retaliatory motive exists where the landlord acts within 90 to 180 days after the
tenant exercised their rights.

Tenant may have to pay or may withhold rent when:

Under quiet enjoyment

Under Partial Eviction,

1)by the landlord, the tenant does not have to pay rent for the entire amount

2) by a third party, the tenant is liable for the reasonable rental value of the portion
she continues to possess.

Under Actual Eviction, tenant does not have to pay.

Surender

If the tenant effectively surrenders ( conveys) his leashold interest back to the landlord,
he does not have to pay.

Destruction of premises without fault

The tenant has a duty to pay where the property is destroyed without fault of the
tenant. Most state allow a tenant to terminate a lease where the property is destroyed without
fault of the tenant under statutory law or case law. Tenant will not be required to pay to restore
even under a covenant of repair.