1. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. Twomey & Jennings BUSINESS LAW Chapter 50 Leases Chapter 50 Leases

2. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 2 Creation & Termination The agreement between a lessor and a lessee by which the latter holds possession of real property owned by the former is a lease. State statutes prohibit discrimination and require that the lease not be unconscionable. Tenancies are classified according to duration as tenancies for years, from year to year, at will, and at sufferance. The agreement between a lessor and a lessee by which the latter holds possession of real property owned by the former is a lease. State statutes prohibit discrimination and require that the lease not be unconscionable. Tenancies are classified according to duration as tenancies for years, from year to year, at will, and at sufferance.

3. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 3 Creation & Termination A lease is generally not terminated by the death, insanity, or bankruptcy of either party except for a tenancy at will. Leases are usually terminated by the expiration of the term, giving of notice, surrender, forfeiture, or destruction of the property or because of fraud. A lease may require written notice of termination to prevent automatic renewal of the lease, or it may require written notice of intent to renew the lease. A lease is generally not terminated by the death, insanity, or bankruptcy of either party except for a tenancy at will. Leases are usually terminated by the expiration of the term, giving of notice, surrender, forfeiture, or destruction of the property or because of fraud. A lease may require written notice of termination to prevent automatic renewal of the lease, or it may require written notice of intent to renew the lease.

4. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 4 Classification of Tenancies 1.Tenancy for years (Fixed Term) 2.Periodic tenancy (Indefinite length; runs period to period) 3.Tenancy at will (Indefinite length terminable by either party at any time) 4.Tenancy at sufferance (hold over tenant) (can remain only if landlord permits)

5. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 5 Rights and Duties of Parties A tenant has the right to acquire possession of the property, enjoy use of it without interference, and retain possession until the lease is ended. Evictions may be either actual or constructive, and may violate the tenant’s rights unless tenant has not fulfilled his duties. A tenant has the right to acquire possession of the property, enjoy use of it without interference, and retain possession until the lease is ended. Evictions may be either actual or constructive, and may violate the tenant’s rights unless tenant has not fulfilled his duties. JMB Properties Urban Co. v Paoluci (1992) Shake, Rattle, Roll and Evict?

6. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 6 Rights and Duties of Parties The tenant is under a duty to pay rent as compensation to the landlord. Repairs and Conditions of Premises. –Landlord has the right to enter. –Tenant has no duty to repair (unless agreed). –Landlord has duty to repair with reasonable care. –Compliance with ADA. The tenant is under a duty to pay rent as compensation to the landlord. Repairs and Conditions of Premises. –Landlord has the right to enter. –Tenant has no duty to repair (unless agreed). –Landlord has duty to repair with reasonable care. –Compliance with ADA.

7. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 7 Rights and Duties of Parties Warranty Of Habitability. –Running water, heat in winter, free from structural defects. No duty for improvements. Remedies of Landlord. –Landlord’s Lien. –Forcible Entry and Detainer. –Landlord’s duty to Mitigate Damages. Warranty Of Habitability. –Running water, heat in winter, free from structural defects. No duty for improvements. Remedies of Landlord. –Landlord’s Lien. –Forcible Entry and Detainer. –Landlord’s duty to Mitigate Damages.

8. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 8 Liability for Injury Landlord’s liability to Tenant. –At common law, landlord was not liable for injuries to tenant. –But Modern Trend holds Landlord liable. Landlord’s liability to Tenant. –At common law, landlord was not liable for injuries to tenant. –But Modern Trend holds Landlord liable. Errico v LaMountain (1998) Please Help Me; I’ve Fallen and I can’t Get Up.

9. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 9 Liability for Injuries Crimes by Third Persons. –Ordinarily landlord is NOT liable, –UNLESS reasonably foreseeable. Crimes by Third Persons. –Ordinarily landlord is NOT liable, –UNLESS reasonably foreseeable. Sharon P. v Arman Ltd. (1999) The Lights Were Out and Crime Was Up: Was the Landlord Liable?

10. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 10 Liability to Third Parties Landlord’s Liability. –Generally NOT liable to third persons injured on property under tenant’s control. –Landlord IS liable for injuries in common areas (stairs, elevator). Tenant’s Liability. –Liable to Licensees. –Liable to Invitees. Landlord’s Liability. –Generally NOT liable to third persons injured on property under tenant’s control. –Landlord IS liable for injuries in common areas (stairs, elevator). Tenant’s Liability. –Liable to Licensees. –Liable to Invitees.

11. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 11 Transfer of Rights An assignment of a lease by the tenant is a transfer of the tenant’s entire interest in the property to a third person. A sublease is a transfer of less than an entire interest—in either space or time. A lease may prohibit both an assignment and a sublease. An assignment of a lease by the tenant is a transfer of the tenant’s entire interest in the property to a third person. A sublease is a transfer of less than an entire interest—in either space or time. A lease may prohibit both an assignment and a sublease.

12. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 12 Liability in Assignment or Sublease If the lease is assigned, the assignee is liable to the landlord for the rent. –Such an assignment, however, does not discharge the tenant from the duty to pay rent. In a sublease, the sublessee is not liable to the original lessor for rent unless that liability has been assumed or is imposed by statute. If the lease is assigned, the assignee is liable to the landlord for the rent. –Such an assignment, however, does not discharge the tenant from the duty to pay rent. In a sublease, the sublessee is not liable to the original lessor for rent unless that liability has been assumed or is imposed by statute.