Landlord and Tenant Business Law I Mrs. Oddo

What is a Lease? Lease: An agreement in which one party receives temporary possession of another’s real property in exchange for rent. Rent is the consideration given in the exchange The Landlord (aka Lessor) is the person giving possession of the realty The Tenant (aka Lessee) is the person receiving possession of the realty

What Types of Leasehold Estates may be created? Periodic Tenancy: when a leasehold is for a renewable period of time with rent due at stated intervals Most common type of tenancy May be by week, month, year, or any other time agreed upon Tenancy from month to month: if the rent is paid by the month Termination: must be given one period (month, week, year) in advance by one of the parties

Types of Leasehold Estates continued…. Tenancy for Years: when a leasehold is for a definite period of time States a definite ending date of the lease Termination: without notice at the end of the lease period Tenancy at Sufferance: when the tenant remains in possession after the lease has expired Termination: in writing, at the end of the lease period

Types of Leasehold Estates continued…. Tenancy at Will: if a party possesses land with the owner’s permission but without an agreement as to the term of the lease or the amount of rent Termination: at any time by either party

Rights and Duties of a Tenant 1. The Right to Possession: The tenant has the right to possession of the real property starting at the time agreed upon in the lease Landlords do not have the right to enter the leased premises for inspection unless the right is given in the lease, and if so must give reasonable notice before Eviction: If the landlord removes the tenant from possession of all the real property  Partial Eviction: If the tenant is removed from only part of the property  Constructive Eviction: The tenant can claim and refuse to pay rent

Rights and Duties of a Tenant continued…. 2. The Right to Use of the Property The tenant is allowed to use the leased property in the manner specified in the lease, and for any purpose for which it is designated or customarily used 3. The Duty to Pay Rent The tenant’s most important duty is to pay the agreed-upon rent when it is due Normally a fixed sum of money, but can be crops or a percentage of profit of a business

Rights and Duties of a Tenant continued…. 4. The Duty to Take Care of the Property The tenant is obligated to take reasonable care of the leased property and to leave it in substantially the same condition as it was in before the lease began 5. The Right to Assign the Lease or to Sublet Assignment: Tenant transfers his or her entire interest in the lease to a third person Subletting: Tenant either: leases all of the property to a third person for a period of time that is less than the term remaining on the lease leases part of the property to a third person for part or all of the term remaining in the lease

Rights and Duties of a Tenant continued…. 6. The Duty to Satisfy Conditions 2 Types of Duties to be fulfilled: Lease Covenant: Promise made by a tenant which, if violated, allows the landlord to sue for damages while the lease remains in effect Lease Condition: Promise made by the tenant which, if violated, allows the landlord to terminate the lease and evict the tenant

Rights and Duties of the Landlord 1. The Right to the Rent Primary right is to the rent agreed upon in the lease. If the tenant fails to pay, the landlord may take legal action to recover the rent and sue to evict the tenant Can recover the rent if the tenant vacates early Can sue to evict the tenant and reenter the property if the tenant fails to pay the rent

Rights and Duties of the Landlord continued….. 2. The Right to Regain the Realty and Fixtures If the tenant has added fixtures, they belong to the landlord 3. The Duty to Maintain the Premises Even though this duty generally falls upon the tenant, when there are multiple parts of the building being rented out, the landlord is responsible for the exterior and common areas When a house is leased, the landlord must provide conditions fit for living

Rights and Duties of the Landlord continued….. 4. The Duty to Pay Taxes Unless agreed otherwise, the landlord must pay all property taxes and assessments on the leased property

How Can a Lease by Terminated? If for a definite period of time, it terminates without notice at the end of that time (Tenancy for Years) Can be terminated by agreement if ended before the term ends Periodic Tenancy: Party seeking to terminate must provide notice to the other party within a reasonable amount of time (normally the amount of the period)