Property II

This semester: Land sale contracts, deed formalities and construction, the recording system, and
non-possessory interests in land such as easements, real covenants, and equitable servitudes. The
course also includes aspects of takings, particularly zoning.

I. Landlord / Tenant
I. Essay
A. Always start by addressing what type of leasehold interest it is
B. Always think about whether something can be construed as a periodic tenancy
C. Always address implied covenant of quiet enjoyment, warranty of habitability, and retaliation
together
D. Whenever they ask about a breach of some term in the lease >> analyze as a RC or ES!!
1. They love to test this with respect to assignments and subleases > who is liable for the terms?
a. Mention privity of estate and privity of contract > both liable for covenants. Just use this
as a way to connect the landlords and tenants to each other and then just analyze the
elements of RC and ES.

II. LEASEHOLDS
A. Defined: an estate in land, where the tenant has a present possessory interest in the lease
property, and the landlord has a future interest (reversion).
B. TENANCY FOR YEARS (TFY)
1. Defined: A lease or tenancy for a fixed period of time.
a. Could be a day, week, a month, a year, 5 years—not literally years, just a fixed period of
time.
b. Ex: L rents to T for 2 years.
c. EXAM: when you know the termination date from the start >> you have TFY.
2. Creation: usually by a written K
a. SOF applies if lease is for more than 1 year
3. Termination: ends automatically after the term period (at the termination date), unless a
clause in the K provides for earlier termination.
a. No notice is needed to terminate b/c the end date in the lease is the notice.
C. PERIODIC TENANCY
1. Definition: A lease or tenancy that continues for successive intervals, and is automatically
renewed at those intervals until one party gives proper notice of termination (usually in
writing).
a. At CL, 6 months notice for year to year and 1 period’s notice for anything shorter
b. Parties may contract around these CL prescribed notice provisions
c. Periodic tenancy must end at the conclusion of a natural lease period
2. Created by:
a. Express agreement
i. Ex: To T for month-to-month, or week-to-week, or year-to-year > successive,
continuous open-ended nature.
b. Implication—3 ways
i. (1) The lease is silent as to duration, but the parties agree that rent will be paid at
set intervals.
ii. (2) An oral term of years in violation of the Statute of Frauds creates an implied
periodic tenancy, measured by the way rent is tendered.
 o Ex: parties orally agree to a lease for 5 years with rent to be $1000/mo > not a
TFY b/c of the SOF >> it becomes an implied periodic tenancy, with successive
intervals based on the way rent is paid (monthly).
iii. (3) By operation of law—The Holdover Tenant
o If landlord elects to hold over a tenant that has wrongfully stayed on past the
conclusion of the original lease > then an implied periodic tenancy arises,
measured by the way rent is now tendered.
o Ex: tenant holds over after the expiration of her 1-year lease, but sends another
month’s rent check to landlord, who cashes it. There is now an implied month-to-
month periodic tenancy.
o Holdover Doctrine
 If a tenant becomes an accepted holdover tenant—such that implied periodic
tenancy arises—then the following rules apply:
 Commercial tenants:
 If the original lease for more than a year > the new implied periodic
tenancy will be year-to-year.
 If the original lease was for less than a year > the new implied
periodic tenancy will be based on however rent is now paid.
 Residential tenants:
 Generally held to a new month to month tenancy regardless of the
original term; or, however rent is now paid.
 Rent: if the landlord tells the holdover tenant, before the lease expires, that
there will be increased rent if he holds over > then tenant will be held to this
increased rent (even if he objects).
 This means that landlord can’t just magically increase rent on a holdover;
must have notified him while he was a regular tenant.
 Exceptions: LL cannot bind tenant if (i) tenant remains in possession for
only a few hours or leaves a few items of personal possession; (ii) delay is
not the tenant’s fault (severe illness); (iii) seasonal lease
3. Termination:
a. (1) To terminate, notice must be given in writing.
b. (2) The amount of notice must be at least equal to the period itself (unless otherwise
agreed).
i. Ex: month-to-month periodic tenancy > notice of 1 month
ii. Ex: week-to-week periodic tenancy > notice of 1 week
iii. Exception: if it’s a year-to-year periodic tenancy or greater > notice of 6 months
c. (3) And, the periodic tenancy must end at the conclusion of a natural lease period.
i. Ex: L leases property to T on Jan. 1, for a month-to-month periodic tenancy. On May
15, T sends a written notice of termination >> T must leave by June 30, b/c 15 days
isn’t enough notice, and the lease must end at the end of a natural lease period (the
end of the month, given that the lease was entered into on Jan. 1).
4. [Any of these rules can be contracted around by the parties—freedom of contract!]
D. TENANCY AT WILL
1. Definition: a tenancy with no fixed duration
2. Creation: express agreement of the parties to create a tenancy at will
a. Tenancy at will is strongly disfavored…so unless the parties expressly agree to a tenancy
at will, the payment of regular rent will cause a court to treat this as an implied periodic
tenancy. Thus, it’s very rare
i. Must be expressly agreed to; otherwise silence creates an implied periodic tenancy.
b. Ex: “To T for as long as L or T desires”
3. Termination:
 a. Can be terminated by either party, at any time w/o notice (in theory)…BUT a reasonable
demand to vacate is usually needed.
i. If lease gives LL right to terminate, similar right is implied in favor of tenant; BUT if
tenant has right to terminate, a similar right will NOT be implied in favor of LL
b. Automatically terminated upon the death of one of the parties
E. TENANCY AT SUFFERANCE
1. Creation: when a tenant wrongfully stays beyond the term provided for in the lease.
a. LL has 2 options:
i. (1) Treat tenant as a trespasser and evict OR
o And during this period, in order to allow the landlord to collect rent under some
legal rubric, we give the tenant a leasehold estate, a tenancy at sufferance.
ii. (2) Treat the tenant as a holdover tenant, and create an implied periodic tenancy.
o All holdover tenants have the possibility of becoming tenants at sufferance, but if
the landlord is ok with it, then it’s just a periodic tenancy.
b. Thus, the tenancy at sufferance usually only lasts a short period of time—between the
period of the holdover:
i. And when the landlord evicts, or
ii. When the landlord just accepts and creates an implied periodic tenancy.
F. SOF Issues
1. A lease for 1+ years must be in writing and signed by party against whom enforcement is
sought to satisfy SOF
a. If invalid under SOF: then the violating provision will be struck (and all other provisions
will remain), the lease will be cut down to 1 year, and the tenant will be Periodic Tenant.

III. TENANT’S DUTIES (4)

A. LIABILITY TO 3RD PARTIES (TORT LAW)
1. Tenant is responsible for keeping the premises in good repair.
a. T is liable for injuries sustained by 3rd parties that T invited, even where L has expressly
promised to make all repairs. T may seek indemnification from L.
B. DUTY TO REPAIR
1. When the lease is silent:
a. Tenant must maintain the premises and make ordinary repairs
b. T must not commit WASTE: 3 types
i. Voluntary waste: willful destruction
ii. Permissive waste: neglect
iii. Ameliorative waste: alterations that increase the premises’ value
o T is liable for cost of restoration
o Modern Exception:
 Allows change after long time if change (i) increases value of premises; (ii)
is performed by long-term tenant; and (iii) reflects change in nature &
character of neighborhood
c. The Law of Fixtures
i. General Rule: if something qualifies as a “fixture” >> then T cannot remove it,
even if T installed it.
o =Fixture passes with ownership of the land
o If tenant removes a fixture > he commits voluntary waste
o Fixture, defined: a once movable chattel that, by virtue of becoming annexed to
realty becomes part of the realty because objectively shows the intent to
permanently improve the realty.
  Ex: heating systems, customized storm windows, a furnace, certain lighting
installations
ii. How tell when a T installation qualifies as a “fixture”?
o Express agreement controls—an agreement between L and T, as to what
defines a fixture and what can and can’t be removed, is binding.
o If no agreement—
 Something is a fixture, and thus it can’t be removed > if removing it would
cause substantial harm to the premises.
 Implication from the harm: tenant intended to install a permanent fixture
(regardless of what his subjective intent was)
 Constructive annexation—an article of personal property that, while
not physically annexed to the property, is a “fixture” because it so
uniquely adapted to the real estate that it makes no sense to separate it
 Ex: like keys to doors
 Something is not a fixture, and thus can be removed > if removing it would
not cause substantial harm to the premises.
 Tenant must remove property installed by end of lease or else
landlord gets to keep it
2. When the lease is not silent:
a. Tenant’s duty to repair when tenant has expressly covenanted to maintain the
property in good condition for the duration of the lease:
i. At common law, historically: T was responsible for any loss to the property,
including loss attributable to force of nature.
o Liable for restoration and reconstruction, in total. On the hook for everything.
ii. Today, the majority view: T may terminate the lease if the premises are destroyed
without T’s fault.
C. DUTY TO PAY RENT
1. If T breaches this duty to pay rent and is still in possession of the premises:
a. LL may either:
i. Evict through the courts OR
o L is still entitled to rent from T (now a T at sufferance) until T vacates
ii. Continue relationship and sue for rent due
b. BUT landlord CANNOT engage in self-help (changing locks, forcibly removing T,
removing T’s possessions)
c. Note on security deposits:
i. Landlord is not permitted to retain a security deposit beyond the damages actually
suffered unless rent deposit is denominated as a bonus (then landlord can retain it).
2. If T breaches this duty but is out of possession of the premises:
a. (E.g., T wrongfully vacates with time left on a term of years lease.)
b. LL may: SIR
i. Surrender: treat T’s abandonment (shown by word or action) as an implicit offer of
surrender which L accepts
o If the unexpired term is less than 1 year > then when landlord resumes possession
of the premises, this constitutes acceptance of surrender.
o BUT if the unexpired term is greater than 1 year > surrender must be in writing to
satisfy SOF.
 Landlord will send a letter to tenant, accepting tenant’s surrender.
o (Surrender: where T shows she wants to give up lease)
ii. Ignore abandonment and hold T responsible for unpaid rent, just as if T were still
there.
 o (only available in a minority of states)
iii. Re-Let the premises on the wrongdoer-tenant’s behalf, and hold T liable for any
deficiency
o Majority rule: L must make good faith effort to re-let (mitigation principle)
3. *The duty to pay rent is the most important duty. It is considered an independent
covenant that is independent of all other covenants…
a. Thus, if tenant breaches some other covenant (e.g., duty to repair) > landlord can’t
terminate the lease and evict; can only sue for damages.
b. But when tenant breaches the duty to pay rent > the landlord can terminate the
lease, evict, and sue for damages.
D. DUTY TO NOT USE PREMISES FOR ILLEGAL PURPOSES
1. If T uses premises for an illegal purpose, and L is not a party to the illegal use, L may
terminate lease or obtain damages & injunctive relief.

IV. LANDLORD’S DUTIES

A. DUTY TO DELIVER POSSESSION
1. Majority Rule: (English)
a. LL must deliver the physical premises to T (get old T out)
i. Thus, if at the start of T’s lease, a prior holdover is still in possession, L has breached
& new T gets damages
2. Minority Rule: (American)
a. LL under no duty to deliver physical premises
b. LL only had duty to deliver legal possession—if there was a holdover, it was T’s
problem.
B. IMPLIED COVENANT OF QUIET ENJOYMENT
1. *[Applies to both residential and commercial leases]
2. The Implied Covenant: tenant has right to quiet use & enjoyment of premises w/o
interference from the landlord.
a. =This is a fundamental, implicit promise in every lease.
3. Breaching the Covenant:
a. Breach by Actual Wrongful Eviction
i. Occurs when LL wrongfully evicts or excludes T from premises
b. Breach by Partial Eviction
i. Occurs when the tenant is physically excluded from part of the premises.
o If done by the landlord > then tenant is relieved from paying the entire rent, even
if tenant remains in possession
o If done by a 3rd party w/o title > there is an apportionment of rent (i.e., tenant is
liable for the reasonable rental value of the portion she continues to possess)
b. Breach by Constructive Eviction
i. Occurs when L does an act/fails to provide some service that he has a legal duty to
provide and makes property uninhabitable thereby > T may terminate lease & seek
damages
ii. Elements: SING
o Substantial Interference due to L’s actions or failure to act
 Doesn’t have to be a permanent problem (although it can be), but just a
recurring one.
 Think: did this failure make the apartment uninhabitable??
o Notice: tenant must notify landlord of the problem and L must fail to act
meaningfully
  Landlord can’t fix what he doesn’t know about
o Goodbye (Get Out): tenant must actually vacate w/in reasonable time after
landlord fails to fix the problem
 Can’t say you’ve been constructively evicted if you’re still there.
iii. *Can move out but still obligated to pay rent.
2. Landlord is generally not liable for acts of other tenants.
a. Exceptions:
i. Landlord must NOT permit a nuisance on premises
ii. Landlord MUST control common areas
B. IMPLIED WARRANTY OF HABITABILITY
1. (*ONLY applies to RESIDENTIAL leases)
2. The Implied Warranty: Premises must be fit for basic human dwelling; bare living
requirements must be met
a. Non-Waivable
b. Appropriate standard may be supplied by (1) housing codes or (2) court decisions
c. Examples: no heat in winter, no plumbing, no running water
3. Tenants’s REMEDIES when implied warranty of habitability is breached (MR3):
a. Move out and terminate the lease (must be a serious problem); or
b. Repair and deduct from future rent; or
i. Must have given landlord a chance to cure
c. Reduce or withhold all rent until court determines fair rental value; or
i. Typically place withheld rent into escrow to show good faith
d. Remain in possession, pay rent & affirmatively seek money damages.
i. *This is the big difference from the constructive eviction > you don’t need to move
out to have a breach of the implied warranty of habitability claim.
C. RETALIATORY EVICTION
1. If tenant lawfully reports landlord for housing code violations > landlord is barred from
penalizing tenant (such as by raising rent, ending the lease, harassing tenant, or any other
reprisals) within 3-6 months. LL has to prove a non-retaliatory reason.

II. LANDLORD’S TORT LIABILITY

A. Common Law of “Caveat Lessee”
1. “Let tenant beware.”
2. Historical Rule: in tort, the landlord is under NO duty to make premises safe
a. Very cold-hearted. Includes physical injury on the premises > no duty.
3. Modern Trend: general duty of reasonable care toward residential tenants.
a. If landlord had notice of a defect and an opportunity to repair it > then landlord is liable
for injuries resulting from ordinary negligence
B. Exceptions to the Common Law: (CLAPS)
1. Common areas:
a. Landlord must maintain all common areas (hallways, stairwells)
2. Latent defects:
a. Landlord must warn tenant of any hidden defects of which landlord has knowledge or
reason to know. Duty to warn, NOT repair.
3. Assumption of repairs:
a. Landlord who voluntarily assumes repairs must complete w/ reasonable care.
i. If done negligently, landlord is liable in tort.
4. Public use rule:
 a. A landlord who leases public space and who should know—because of the nature of the
defect and the length of the lease—that tenant will not repair is liable for any defects on
the premises.
i. In short-term leaseholds where tenant has neither the inclination nor the ability to
find defects.
b. Examples: convention hall or museum
5. Short term lease of furnished dwelling:
a. Landlord responsible for any defect that harms the tenant.
i. Again, here, tenant has neither the expectation nor the inclination to make repairs nor
notice defects.

III. ASSIGNMENTS & SUBLEASES

A. General Rule: If not prohibited in lease, tenant may transfer his interest in whole (assignment)
or in part (sub-lease).
1. Lease can prohibit tenant from assigning or subletting without landlord’s prior approval.
a. BUT these provisions are strictly construed against the landlord:
i. If silent, tenant is presumed to have the right to sublease/ assign
ii. If the landlord only prohibits one, it does not prohibit the other.
b. Waiver: once landlord allows a transfer, he cannot stop future transfers unless landlord
expressly reserved that right
B. ASSIGNMENTS
1. Defined: the complete transfer of the entire remaining term—ALL
2. Consequences of Assignment—T2 steps into the shoes of T1
a. Privity of Estate?
i. L and T2: YES.
o Thus, T2 (stepping into the shoes of T1) is liable for covenants that “run with the
land”
 Do/not do a physical act – repair, conduct biz, paint, etc.
 Pay money – rent, taxes, etc.
 Duration of lease – termination clauses
ii. L and T1: NO, not anymore.
b. Privity of Contract?
i. L and T2: NO, unless expressly assumed, in some other doc, all promises in original
lease
ii. L and T1: YES
o Thus T1 and L still remain secondarily liable to each other
o If later tenant flees or is judgment-proof, T1 is accountable.
3. *Practical Effect: T1 assigns T2. T1 and T2 are now related to L according to the rules
above. T2 then assigns to T3. If T3 breaches his duties > L can’t go after T2 b/c he was never
in privity of K, and is no longer in privity of estate. But L can go after T1, b/c he’s still in
privity of K.
C. SUBLEASES
1. Defined: tenant retains some of the remaining term – SOME.
2. Consequences of a Sublease:
a. No privity: L and sublessee are in neither privity of estate nor privity of contract > they
have no real relationship.
i. T2 is responsible to T1, and vice versa.
ii. T1 is responsible to L
D. ASSIGNMENTS BY LANDLORDS
1. This is usually done by deed; tenant’s consent is NOT required.
2. Rights of Assignee against tenants:
a. Once tenants are given reasonable notice of the assignment > they must recognize and
pay rent to new owner
b. The benefit of all tenant covenants that touch and concern land runs from landlord’s
estate to new owner
3. Liabilities of Assignee to Tenants:
a. Burden of landlord’s covenants that touch and concern the land runs to the assignee
i. And BOTH the assignee AND the original LL are liable for performance of lease
covenants
A.