Chapter 22

1. Chapter 22 Renting Realty

2. 22-1 Types of Leases

3. Lease = agreement where one party receives temporary possession of another’s real property in exchange for rent. • Rent = consideration given in return for temporary possession. • Landlord or lessor = person conveying possession of realty • Tenant or lessee = person receiving possession • Leasehold estate = ownership interest of the tenant

4. Lease may be oral. • Statute of Frauds – leases more than one year must be in writing

5. What’s Your Verdict? • Curtis entered into an oral agreement with Kearne to lease Kearne’s cabin for three months during the winter ski season. However, skiing was poor that year because there was little snowfall. Therefore Curtis tried to avoid the contract. Curtis claimed that the lease was not enforceable because it was not in writing and because the poor skiing conditions. • Must this lease be in writing to be enforced?

6. 4 Types of Leasehold Estates • 1. Periodic Tenancy = leasehold is for a renewable period of time with rent due at stated intervals. • Example: Rent is $300 per month payable in advance. • Lease is intended to run longer than one month, yet the lease specifies no ending date.

7. 4 Types of Leasehold Estates • 2. Tenancy for Years – leasehold is for a definite period of time • Example: 6 months, 1 year, etc. • Has the name ‘ tenancy for years’ even if the lease is for less than one year • At the end of the lease period, a tenancy for years terminates automatically without a requirement of notice.

8. 4 Types of Leasehold Estates • 3. Tenancy at Sufferance – if a tenant remains in possession after a lease has expired • Tenant can be evicted (forcibly removed from the property by the sheriff) • If the holdover tenant pays and the landlord accepts additional rent, a periodic tenancy is generally created for the same period or term as the prior lease. • i.e. if prior lease was for one year, tenant liable for another year of rent. If lease were for one month, landlord would be obligated to provide the premises for another month.

9. 4 Types of Leasehold Estates • 4. Tenancy at Will – if party possesses land with the owner’s permission but without an agreement as to the term of the lease or the amount of rent

10. Read In This Case page 348 • Read FYI (Boycott) page 349 • Answer questions 1 – 9on page 349

11. Tenant’s Rights • 1. Right of Possession • 2. Right to use the property • 3. Right to assign the lease or to sublet

12. Right of Possession 1. Tenant has a right to the possession of the real property starting at the time agreed upon in the lease. Landlords generally do not have a right to enter leased premises for inspection unless this right is given in the lease. Constructive eviction – landlord fails to perform certain duties as defined in the lease or imposed by statute and if the tenant abandons the premises because of such a breech.

13. Right to Use the Property • Tenant allowed to use leased property in manner specified in the lease

14. Right to Assign the Lease or to Sublet • Assignment of a lease – takes place when the tenant transfers his or her entire interest in the lease to a third person. • Subletting – when tenant: • 1. leases all of the property to a third person for a period of time that is less than that remaining on the lease Or • Leases part of the property to a third person for part or all of the term remaining

15. When property is sublet • Original tenant continues to be directly liable to the landlord for performance of the lease • Leases often require the landlord’s prior approval of assignment or subletting. However, courts have held that the landlord must have a valid reason if consent is withheld.

16. Tenant’s Duties • 1. Duty to Pay Rent • 2. Duty to Take Care of the Property • 3. Torts Duty

17. 1. Duty to Pay Rent • Security deposit • Sometimes required to pay the first and last month’s rent amount

18. 2. Duty to Take Care of the Property • Tenant owes duty of reasonable care to return the property in substantially the same condition it was when the lease began • Tenant not liable for wear and tear caused by ordinary use. • Tenant obligated to notify the landlord when major repairs needed. • Tenant has no right to make major structural changes without landlord consent

19. 3. Torts Duty An injury to an invitee caused by a tenant’s negligence is the responsibility of the tenant in the areas under the tenant’s control. • Lessees assume liability for injuries to themselves and to others (torts) that occurred on the leased property. Exception is when landlord knows the defective condition but does not disclose it to the tenant and the tenant would not be able to identify the problem after a reasonable inspection. Landlord also liable for injuries on common portions of land. • i.e. diving board

20. 23-3 Landlord’s Rights and Duties • Right to Rent • If tenant vacates early, tenant is liable for unpaid rent • Right to Regain the Realty and Fixtures • Duty to Maintain the Premises • Warranty of habitability – landlord required to provide residential property in a condition fit for human living. • No exposed electrical wiring • Roof shall not leak • Every ceiling and wall smooth, free of loose plaster and wallpaper • Outside doors and windows have tight-fitting screens • Every unit have a private bathroom • Gas stoves properly vented and connected

21. Torts Duty • Common areas • Duty to Pay Property Taxes • Landlord pays all property taxes • Fair Housing Act Duties • No discrimination • Duty on Voluntary Termination • Lease can be terminated by agreement before the expiration of the term