Real and Personal Property Objective Compare the legal rights of acquisition, transferal and renting/leasing of real or personal property. RELATIONSHIP BETWEEN LANDLORDS AND TENANTS

Relationship between Landlords and Tenants Parties to the contract to lease or rent –Lessor/Landlord –Lessee/Tenant Tenant - Wants possession and occupancy free from interference or annoyance Landlord – Wants rent money and property in good condition at the end of rental term

Rights and Duties: Covenants of the Contract Covenant = Promise Affect both the landlord and the tenant May be express or implied Number and type vary depending on type of property

Quiet Enjoyment Tenants have a right to: –expect the undisturbed possession of the property called quiet enjoyment. –expect exclusive use of the property free from interference or annoyances. State laws vary and the landlord may or may not have the right to enter the premise without prior notice. –Add covenant to lease to address entry issue

Implied Covenants Implied warranty of habitability by landlord –May be enforced by city housing codes –Health and safety of citizens is considered –Duty of landlord to provide property free of defective conditions Waste - The landlord expects reasonable wear and tear by tenant, but unreasonable damage is called waste and tenant can be required to pay the cost to repair waste.

Assignment and Subletting Assignment and subletting –When a tenant transfers the remaining period of time on a lease to another party May or may not be allowed by landlord May have to get prior approval by landlord

Renewals of Lease Tenancy ends at the expiration of stated time Lease may have renewal clause making provisions for renewal by the parties to contract Agreement usually requires either party to give advance notice of their intent to non- renew the lease

Security Deposits A money deposit as security for payment of rent due or repairs for damages done by the tenant Most landlords require one or two month’s rent in advance as security deposit When lease expires, if all rent is paid in full and there is no waste, the security deposit is returned to tenant by landlord.

Payment of Rent A critical issue to both parties. Be sure contract is clear on: –What is cost of monthly rent/lease? –When is payment due? –Is there a late fee if payment is late? –What constitutes “late”? –Is late payment grounds for breach of contract and termination of tenant rights?

Termination of Lease If the contract has a specified term, it is a tenancy for years. Leases can be terminated prior to the end of the term by either party, but penalty clauses may apply. Breach of contract exists if the tenant chooses to vacate and the property cannot be leased to new tenant in a timely manner. Landlord may sue for monetary damages. Landlord must attempt to lease property and mitigate any damages from loss of rents.

Rent Control Rent control is the maximum rent that can be charged for a property. Applies in many large cities where housing is in short supply. Tenant organizations asked for laws to keep rent from going up. Laws vary greatly on rent control.

Anti-Discrimination Anti-discrimination laws such as the Civil Rights Act bind landlords in the selection of tenants. Special emphasis is given on human rights and needs. Law forbids discrimination on basis of race, religion, color, national origin, sex, age, ancestry, marital status, blindness, military service or future plans to have children.

Tort Liability Applies to both landlord and tenant May require responsibility for injuries occurring on the premise Landlord is usually responsible for common areas where landlord is in control Tenant is usually responsible for injury caused by defects in the portion of the premise over which he/she has control.

Fixtures Fixtures are items of personal property attached to real property. The addition of fixtures by the tenant causes problems when tenant prepares to vacate the premise. –Who owns fixtures that become real property? –What damage will be caused if item is removed? –Will tenant be reimbursed for improvement to premise?

Breach of Lease and Remedies Eviction – The landlord has the right to deprive the tenant of physical possession of the premises but landlord –Must obtain a court order allowing removal of tenant –Must provide just cause, such as: Nonpayment of rent Damage to property Violations of lease provision Lien may also be attached to tenant’s property to pay back rent or costs of repair due to waste

Breach of Lease and Remedies Constructive eviction – When the landlord breaches his or her duties of the lease covenant, the tenant may consider the lease terminated, leave premise and cease rent payment Example: Landlord deprives tenant of gas, electricity, or other fundamental service