1. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 1 LANDLORD-TENANT LAW AND LAND USE REGULATION © 2010 Pearson Education, Inc., publishing as Prentice-Hall CHAPTER 49

2. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 2 Landlord-Tenant Relationship Created when owner of a freehold estate (landlord) transfers a right to exclusively and temporarily possess the owner’s property to another (tenant).

3. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 3 Landlord-Tenant Relationship (continued) Nonfreehold Estate – tenant has right to possession of the property but not title to the property. Leasehold – tenant’s interest in the property. Landlord – owner who transfers the leasehold. Tenant – party to whom leasehold is transferred.

4. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 4 Lease Rental agreement between landlord and tenant. –Must contain essential terms. –Must be in writing if lease term exceeds one year.

5. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 5 Types of Tenancy Type of Tenancy Description Tenancy for Years Continues for the duration of the lease and then terminates automatically without notice. Does not terminate upon death of either party. Periodic Tenancy Continues from payment interval to payment interval. May be terminated by either party with adequate notice. Does not terminate upon death of either party.

6. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 6 Types of Tenancy ( continued ) Type of TenancyDescription Tenancy at WillContinues at the will of the parties. May be terminated by either party at any time with adequate notice. Terminates upon death of either party. Tenancy at Sufferance Arises when tenant wrongfully occupies real property after expiration of another tenancy or life estate. Continues until owner either evicts the tenant or holds tenant over for another term. Terminates upon death of tenant.

7. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 7 Landlord’s Duties The landlord owes tenant duty to: –Deliver possession. –Not interfere with tenant’s right to quiet enjoyment. –Maintain leased premises.

8. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 8 Duty to Deliver Possession Tenant has right to exclusive possession of leased premises − for the term of the lease, or − until tenant defaults on obligations under the lease. Landlord may not enter leased premises unless the right is specifically reserved in the lease.

9. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 9 Tenant’s Right to Quiet Enjoyment Implied in all leases. Landlord who interferes with tenant’s quiet and peaceful possession, use, and enjoyment of property is liable for wrongful eviction. Landlord who allows premises to become unfit is liable for constructive eviction. –E.g., by failing to provide electricity, failing to make repairs.

10. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 10 Landlord’s Duty to Maintain the Leased Premises State and local building codes impose specific standards for maintenance and repair of premises. –E.g., minimum standards for heat, light, water.

11. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 11 Implied Warranty of Habitability Leased premises must be fit, safe, and suitable for ordinary residential use. If breached, tenant may: –Withhold amount from rent reflecting loss of value. –Repair defect and deduct expenses from rent. –Cancel lease if breach constitutes constructive eviction. –Sue for damages.

12. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 12 Tenant’s Duties Tenant owes the landlord duty: –To pay rent. –Not to use leased premises for illegal or nonstipulated purposes. –Not to commit waste. –Not to disturb other tenants.

13. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 13 Duty to Pay Rent Duty to pay agreed-upon amount of rent for the leased premises to the landlord at agreed-upon time and terms. Common commercial rental arrangements: –Gross lease –Net lease –Double net lease –Net, net, net lease (triple net lease) Upon nonpayment, landlord may bring unlawful detainer action.

14. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 14 Premises Liability The liability of landlords and tenants to persons injured on their premises.

15. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 15 Landlord’s Duty of Reasonable Care Landlord must not negligently cause injury to tenants or third parties. Must guard against foreseeable dangers. –E.g., have adequate security. Landlord who breaches duty is liable for tort damages.

16. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 16 Transfer of Rights to Leased Property Landlord may sell, gift, devise, or otherwise transfer interest in leased property. –If complete title is transferred, property is subject to the existing lease. Tenant’s right to transfer possession of leased premises to another depends on the terms of the lease. –Assignment –Sublease

17. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 17 Assignment of a Lease Transfer by tenant of his or her rights and duties under a lease to another. Tenant is assignor. Party to whom rights have been transferred is assignee. Assignor remains responsible for his or her obligations under the lease.

18. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 18 Assignment

19. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 19 Sublease Occurs when a tenant transfers only some of his or her rights under the lease. Sublessor transfers those rights to the sublessee. No legal relationship is formed between landlord and sublessee.

20. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 20 Sublease (continued)

21. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 21 Rent Control Rent control ordinances stipulate the amount of rent a landlord can charge for residential housing. Rent is fixed at a specific amount, with minor annual increases.

22. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 22 Civil Rights Act Prohibits racial discrimination in the transfer of real property. Permits lawsuits to recover damages and injunctions.

23. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 23 Fair Housing Act Unlawful to refuse to rent or sell a dwelling to any person on the basis of race, color, national origin, sex, or religion. Prohibits discrimination by real estate brokers, mortgage lenders, and advertisers concerning the sale or rental of real property. Applies to landlords leasing four or more units.

24. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 24 Americans with Disabilities Act Prohibits discrimination on the basis of disability in public accommodations. –E.g., hotels, theaters, stores. Does not generally apply to residential facilities. New construction and alterations must be made readily accessible to and usable by disabled persons.

25. © 2010 Pearson Education, Inc., publishing as Prentice-Hall 25 Takings of Real Property Eminent Domain – Under 5 th Amendment, government may take private property for public use, provided just compensation is paid to the private property holder. Kelo case permitted taking of private property for purposes of economic development. –Satisfied “public use” standard. –Controversial decision.