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 Owner (landlord; lessor) conveys right to occupy (lease) to a tenant (lessee) for a certain period of time.  Owner retains a reversion.  Historically,

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Presentation on theme: " Owner (landlord; lessor) conveys right to occupy (lease) to a tenant (lessee) for a certain period of time.  Owner retains a reversion.  Historically,"— Presentation transcript:

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2  Owner (landlord; lessor) conveys right to occupy (lease) to a tenant (lessee) for a certain period of time.  Owner retains a reversion.  Historically, a lease transformed from being a pure conveyance to being a hybrid of a conveyance and a contract.  Under modern law, highly regulated by statute, especially if residential.

3  1. Tenancy for a term (also called “estate for years” or “term for years”)  Automatically ends when time elapses.  E.g., a one year lease, a nine month lease, a 99 year lease.

4  2. Periodic Tenancy  Fixed term which renews automatically unless steps are taken to terminate.  “month-to-month” “year-to-year”

5  3. Tenancy at Will  No definite term  Continues until either party terminates

6  4. Tenancy at Sufferance  The “hold over” tenant.

7 [Not actual property]

8  Statute of Frauds (1677)  If over three years, must be in writing.  Modern Law  If over one year, must be in writing (Texas).  All leases must be in writing.

9 Business & Commerce Code § (a) A promise or agreement described in Subsection (b) of this section is not enforceable unless the promise or agreement, or a memorandum of it, is (1) in writing; and (2) signed by the person to be charged with the promise or agreement or by someone lawfully authorized to sign for him. (b) Subsection (a) of this section applies to: * * * (5) a lease of real estate for a term longer than one year * * *.

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11  Common law = landlord could exclude anyone for any or no reason.  Contrast with innkeeper rule.  Modern law = restricted by federal, state, and local law

12  Cannot discriminate based on:  Race  Color  Religion  Sex  Family status (pregnant or having children)  National origin  Handicap

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16 NORTHLAKE deluxe 1 BR apt, a/c, newer quiet bldg, pool, prkg, mature person preferred, credit checked. $

17  Lease transfers a present possessory estate to the tenant.  But, landlord has right to protect the landlord’s reversion from waste.

18  If tenant cannot possess because a third party is in unauthorized possession when lease starts, what happens?

19  1. American View  Landlord’s duty is to deliver legal possession.  Thus, tenant must remove unauthorized occupier.  Minority approach in U.S.

20  2. English View  Landlord’s duty is to deliver actual (not just legal) possession.  Thus, landlord must remove unauthorized occupier.  Majority approach in U.S.

21  3. Lease Terms  Study lease to see if it expressly deals with this issue.  State law may require residential landlords to place tenant in actual possession regardless of lease terms.

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23  Possession disrupted by third party after tenant has possession.  General rule is that this is tenant’s problem.

24  Landlord’s options for treating former tenant:  Trespasser and evict.  Periodic tenant.

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28  Lease was a conveyance.  Landlord not responsible for condition of premises.  Tenant had duty to protect landlord’s reversion and not commit waste.  Value of lease was the use of the land itself (farming), not the buildings.

29  Landlord’s duties  Not misrepresent condition  Reveal known undiscoverable hidden defects  Independent covenants

30  Implied Warranty of Habitability  Primarily for residential tenancies  By court judgment  By legislation

31  Kamarath v. Bennett, 568 S.W.2d 658 (Tex. 1978).  “[A]t the inception of the rental lease, there are no latent defects in the facilities that are vital to the use of the premises for residential purposes and that these essential facilities will remain in a condition which makes the property livable.”

32  Enactment in 1979 of Property Code §  Abrogated Kamarath implied warranty.  Created limited duty of landlord to repair.

33  Davidow v. Inwood North Professional Group-Phase-I, 747 S.W.2d 373 (Tex. 1988).  Implied warranty of suitability by landlord in commercial lease that premises suitable for their intended commercial purposes.

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35  Does tenant need to continue to pay rent even though the government has taken the property?

36 Warning: Highly regulated by state law.  Withhold rent  Repair and deduct  Sue for damages  Treat as constructive eviction and move out

37  In most situations, the tenant is at fault and has been very destructive to the building.

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41  1. Agreement between landlord and tenant (free market)  2. Limited by government (rent control)

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44  Silent lease = any legal use  Lease indicates use = precatory; not a limitation (unless residential)  Lease restricts use = only the allowed use

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46  Common Law  Unless lease provision, tenant does not forfeit lease  Modern Law  Tenant forfeits lease (also, forfeiture typically provided by lease provision)

47  Tenant has duties (similar to a life tenant) not to commit voluntary or involuntary waste.  Note interface with implied warranty of habitability.

48  If fixture, tenant may remove and take.  No substantial damage.  Repair (or pay for) all damage.  If improvement, stays with property.  Issue = Has personal property morphed all the way to real property?

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50  Landlord not responsible unless:

51  Fail to disclose known latent defects

52  Landlord not responsible unless:  Fail to disclose known latent defects  Leased for admission of public

53  Landlord not responsible unless:  Fail to disclose known latent defects  Leased for admission of public  Short-term lease of furnished dwellings

54  Landlord not responsible unless:  Fail to disclose known latent defects  Leased for admission of public  Short-term lease of furnished dwellings  Breach of express covenant to repair

55  Landlord not responsible unless:  Fail to disclose known latent defects  Leased for admission of public  Short-term lease of furnished dwellings  Breach of express covenant to repair  Negligence in making repairs

56  Landlord not responsible unless:  Fail to disclose known latent defects  Leased for admission of public  Short-term lease of furnished dwellings  Breach of express covenant to repair  Negligence in making repairs  Injury in common area under landlord’s control

57  Landlord not responsible unless:  Fail to disclose known latent defects  Leased for admission of public  Short-term lease of furnished dwellings  Breach of express covenant to repair  Negligence in making repairs  Injury in common area under landlord’s control  Breach of statutory duty to repair

58  Movement to adopt tort-based rule of reasonable care and foreseeability.

59  Traditional rule = no duty  Modern rule = Was landlord negligent?

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63  1. Terminate lease

64  2. Sue for damages

65  1. Terminate lease  2. Sue for damages  3. Retain part or all of security deposit

66  1. Terminate lease  2. Sue for damages  3. Retain part or all of security deposit  4. Evict

67  1. Terminate lease  2. Sue for damages  3. Retain part or all of security deposit  4. Evict  5. Use landlord’s lien on contents

68  Before 1381  Force allowed as long as no serious injury or death resulted.

69  1381 Statute of Forcible Entry  Self-help eviction still allowed but must be peaceful.  Forcible entry not allowed.

70  Modern law  Heavily regulated by statute.  Often long and costly procedures before landlord can have authorities remove a tenant.  Some states prevent landlord from denying services even to non-paying tenant.  Forcible detainer (“change locks”) may be prohibited, even if peaceful.

71  Landlord takes action (e.g., evict, raise rent, terminate lease) to “get even” with tenant who asserts rights.  Texas = Prohibited under Property Code § §

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74  Landlord may transfer the reversion (aka, sell the property).  Common law concept of “attornment” requiring the landlord to obtain the tenant’s consent is generally abolished (England = 1705).

75  May landlord limit?  Commonly restricted by lease.  Courts normally uphold restriction but strictly construed.  But, growing trend to prevent landlord from withholding consent in an unreasonable manner.  But, also growing trend to require landlord’s express consent even if lease silent.

76  Texas Property Code §  “During the term of a lease, the tenant may not rent the leasehold to any other person without the prior consent of the landlord.”  Enacted in 1983 and never amended.

77  Tenant transfers entire interest to assignee.  “substitution” analogy  Assignee is now tenant of landlord and they owe duties to each other.  But, original tenant still liable to landlord under original terms of lease unless landlord executes a release (not a mere consent).

78  Tenant transfers less than entire interest to subtenant.  “Subinfeudation” analogy  Subtenant’s duties are to tenant, not landlord.  Landlord’s duties are to tenant, not subtenant.

79  Under given facts, may be difficult to determine.  Modern trend is to treat all lease transfers as assignments.


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