Property Ii

Front 1

Soles v. U.S Department of Housing

Back 1

 Example of a formulation on what to do when there is a discrimination suit.
 If we require the P to make there case that required them so show the intention conduct of the D it would be very effective.
 There is a shifting burden of proof to the P they must show the discrimination. They are qualified and that they made the application and that the D failed to rent to them and continued to hold the place open.
 After that is proven the burden shifts to D. The D must show a non-discriminatory reason as to why they did not sell the property to this individual. Once the D does that …
 The burden is now shifted to the P. Now has to show that the D defense was not a real reason. But was just a mere pretext. They must undermine the D’s defense.
 To show pretext: You look at the syllogism. “I don’t want to have a noisy place” that assumes that all children are noisy and that is not an appropriate premise.
 The court lets her off the hook because she
 A did ask the right questions “do you have a child”
 She did show apartment to a family with a child
 There was a logical connection between the noise and the old peps

Front 2

English Rule for Delivery of Possession

Back 2

 In England that meant that you have possession as the whole. (Legal and Physical possession) That means that there was not a holdover tenant, or someone else took without notice. The possession has to be turned over in fact that means if there is a hold over tenant or what have you, you do not have to take possession. Tell landlord you aren’t going to pay rent.
 Here the person may terminate the lease and sue for damages, or adhere to the lease but withhold rent for the period he is out of possession.
 As long as the place is open on day one the English rule is satisfied

Front 3

American Rule for Delivery of Possession

Back 3

 American- as long as there is not someone who has superior title (holdover tenant, ext) the landlord does not have an obligation to you. This is because the landlord has not convenanted against the wrongful acts of another and should not be held responsible for such a tort unless he has expressly so contracted. To remedy you have to take it to court. Tell the lawyer you have been wrong.

 Here he may sue to recover possession and damages.
 American Rule seems to be founded on the argument that the tenant has sufficient legal and equitable remedies available to protect himself against the third party wrongfully in possession and a greater incentive to use them than the landlord would have.

Front 4

What if there was no legal right to live there

Back 4

 If you discover that you never had the legal right to be in the apartment later after you have moved in. Under both the American and English rule you can quit the lease. But, you do have to pay for the time that you have been occupying the apartment.

Front 5

T learns that L had earlier leased the premises to another tenant for the same term. T remains in possession but stops paying rent.

Back 5

Evidence of concurrent leases does not in itself necessitate result by which either lease would be declared void.

Front 6

What happens if a building is under construction and it takes 8 months longer than the specified date to be completed and T sues to rescind the lease and to recover advance rent paid to L. The lease contains a clause excusing L from liability for failure to delivery possession if the building is still under construction

Back 6

The Appellate Term of the Supreme Court held that delivery of possession of leased premises could not be effected within a reasonable time as a matter of law where more than eight months had elapsed from occupancy date fixed by lease and where one-fifth of the demised term had expired; under such circumstances the tenant was justified in pursuing his appropriate legal remedies.

Front 7

Assignment

Back 7

an assignment of a leasehold places the assignee in privity of estate with the landlord, meaning that the assignee and landlord are liable to each other for performance of the lease obligations that "run" with the leasehold estate -- carry over from one estate holder to the next.
An assignment of the landlord's reversion similarly places the assignee and the tenant in privity of estate.

Front 8

Does Assignment destroy privity of contract?

Back 8

Assignment by itself does not destroy privity of K which means that the contractual duties created by a lease continue to be personal obligations of the orginal parties to the lease even after the assignment.

Front 9

Sublease

Back 9

by the tenant does not create privity of estate between the landlord and the subtenant. The subtenant is liable only to the tenant for the sublease obligations, and the subtenant has no claim against the landlord for failure to perfrom his lease obligations. There is generally no privity of contract, either because only the tenant and subtenant have a contractual relationship.

Front 10

How is an Assignment created?

Back 10

Is the transfer of the party's entire interest under the lease.

Front 11

Example of Privity of Contract

Back 11

L leases blackacre to T, who assigne the Leasehold to C, who fails to pay rent. L may sue C because C is in privity of estate with L. But L may also sue T, because T and L remaine in privity of contract with each other. L can only recover once, but L has two pockets he can dip into.

Front 12

Can you destory privity of contract?

Back 12

It is necessary for the landlord and original tenant to agree to release each other from their contractual promise. A landlord's consent to an assignment and acceptance of rent from the tenant's assignee does not constitute a release. There must be clear evidence of a landlord's intent to relase, usually found in some explicit agreement.

Front 13

What happens if the lease states "Assignee assumes the obligation to perform all of Tenant's duties under the lease?"

Back 13

Landlord is the third party beneficiary of this promise and thuse Assignee and Landlord are in privity of contract.

Front 14

Multiple assignments

Back 14

An assignee is privity of contract with the landlord remains liable for the default of subsequent assignees, however remote, unless there has been a release. An assignee in privity of estate with the landlord is liable only for the default that occurs during the period in which there is privity of estate. An assignor who has not been released remains in privity of contract with the landlord and is liable for the default of any assignee.

Front 15

Subleases

Back 15

A sublease occurs when the lessee transfers anything less than his entire interest in the leasehold, there by retaining a reversion.

Front 16

A subleasee has..

Back 16

neither privity of contract nor privity of estate with the principal lessor. A sublessor remains in both privity of contract and privity of estate with his landlord. The sublessor and sublessee are in privity of contract and privity of estate with respect to their new contract-- the sublease.

Front 17

Tenant default under the principal lease:

Back 17

If the principal tenant/sublessor defaults on the principal lease the landlord is entitled to terminate the principal lease. Because the sublease is merely a lease of whatever leasehold the principal tenant had, and that leasehold is now over, the subtenant has no further right of possession.

Front 18

Distinquishing an assignment from a sublease:

Back 18

1.) look to the intentions of the parties
a. What kind of a relationship did they want to establish?

2.) examine the substance of the transaction to determine if the tenant has transferred her entire interest in the leasehold

Front 19

Parties Intentions

Back 19

 They used the word to sublet – but the rest of the language does not indicate that it was a
sublease.
* If the transfer is for an increased rent, a sublease is usually indicated.
* If the transfer is for a lup sum, assignment is the usual inference.
* If the transferee expressly assumes the lease obligations an assignment is the inferred intention
 The words sublease or assignment- are not conclusive, though they may be persuasive.

Front 20

Substance of the Transfer

Back 20

* The common law rule was that the transfer was as assingment unless the tentant retained a reversion, no matter how brief the duration.
*Right of re-entry- at common law this right, which was not a reversion and lacked any certain duration, was not an estate and so not enough to create a sublease.

Front 21

If the individual is paying the lessor this creates what?

Back 21

 The fact that he was paying Ernst is not determinable. It could be a factor to back up your claim. But, it is not determinable in the court of law.

Front 22

What happens if the tenant trasgers the "remainder of the term of my leasehold, 40 years, but reserves the right to re-enter and retake possessino in the event of any default by trasferee."

Back 22

Common Law- tenant has transferred her entire interest - so assignment has occurred

Minority - creates a sublease. the right of reentry coupled with a transfer of the remainder of the term creates a sublease

Front 23

Tenant assigns to N, who assign to Thrify, who assigns to D. N does not default. Thrify defauls on 1 months rent, and D defaults of 5 months rent. Who can be sued for the unpaid rent?

Back 23

Tenant - for $6,000 (at 1,000 doallars a month) because he is privity of the contract.
** Tentant is entitled to SUBROGATION** to recover 1,000 from thrifty and 5,000 from Deadbeat.
N has no liability because she was not in privity of contract and no deafault occurred during his period of privity of estate.
Thrify would be liable to the landlord for 1,000 becuase he was only in privity of estate and 1,000 is the measure of his default during that period of privity. Deadbeat is liable for the same reason for 5,000

Front 24

Lease provisions restricting assignment or sublease

Back 24

Unless a lease expressly limits or prohibits assignment or sublease, a tenant is free to transfer the leasehold by either method. However they do exist, and are valid. But they must be clear and explicit.

Front 25

Limits on landlord power to deny consent

Back 25

Common law permitted a landlord to deny consent to a transfer for any reason, or for no reason at all. This view is under attack
*Anti-discrimations statutes limit landlords ability to reject prospective tenants
* Implied obligation of reasonableness

Front 26

Implied obligation of reasonableness

Back 26

a number of states have implied a landlord obligation to act resonably when denying consent to a transfer, a postion endored by Restatement of Property. This obligation is typically limited to commercial leases only.

Front 27

Kendall v. Ernest Pstana, Inc

Back 27

the California supreme court held that in a commercial lease a landlord may withhold consent to transfer only when the landlord has a commmercial resonable objection to the transfer. There is also a contractual obligation to good faith and fair dealing.

Front 28

What is reasonable?

Back 28

This is an objective test. Landlord may reject transferees of doubtful financial strength or if the transferee's proposed use is not suitable in light of other commercial uses. Landlords my not reject transferees to secure a commercial advantage or because the transferee's proposed use is ethically offensive to the landlord though otherwise reasonable.

Front 29

Landlord Waiver

Back 29

a landlord may waive lease restriction on transfer, eithe rexpressly or by implication, usually as a result of knowoing acceptance of rent from an assignee.
Common Law- once the landlord has expressly waived a transfer restriction the restriction is destroyed unless he specifically reserves the right to bar future transfers.

Front 30

Modern Idea on Landlord Waiver

Back 30

The common law can be avoided by
(1) an express declaration by the landlord, at the time of the transfer, that waiver is limited to this transfer only or
(2) an express statement in the lease that transfer restriction bind the tenant's assignees, thus preserving the transfer restriction as to future assignees.

Front 31

According to Kendall Can a landlord reasonably withhold tenant from one of his building be a sublessor into another one of his buildings?

Back 31

a. Krieger v. Hemsley-Spear- Action was brought by a tenant whose lease required that the landlord's consent to a sublease be obtained but also provided that such consent could not be unreasonably withheld. The Superior Court granted a motion by the landlord for summary judgment and the Appellate Division affirmed. On petition for certification to the Superior Court, Appellate Division, the Supreme Court held that the fact that the proposed subtenant was then a tenant occupying office space in another building owned by the landlord, so that if the landlord consented to a sublease to the particular subtenant it would lose him as a tenant in the landlord's other building, such ground for withholding consent was insufficient in law and the withholding was unreasonable.

Front 32

Suppose that T is not already a tenant of L, but rather is a prospective tenant who wants to use the lease property that will compete with L's business in the same area?

Back 32

i. It would be reasonable because it is commercial reasonable. To protect the preservation of the property and the lease covenants. The next idea is that it is reasonable to aruge that competition is under general protection. Lessee of property at shopping center brought action against lessor for, inter alia, breach of contract, as result of lessor's withholding consent to subleases. The Superior Court, Santa Clara County, Jeremy Fogel, J., found that lessor had no legal right to refuse to consent to subleases, and lessor sought statutory mandate review. The Court of Appeal, Premo, Acting P.J., held that lessor was not precluded as matter of law from withholding consent to subleases to businesses in competition with lessor.

Front 33

What if the landlord does not ethically believe in what the prospective tenant is going to do with the premises?

Back 33

The Supreme Court, Trial Term, Edward J. Greenfield, J., held that under a lease providing that consent of landlord to a sublease shall not be 'unreasonably withheld' a landlord associated with a religious university would be deemed to have acted unreasonably and arbitrarily in withholding consent to a sublease to a planned parenthood organization even if there were philosophical and idealogical inconsistencies between landlord and the proposed subtenant, or even if the proposed subtenant carried out activities which were of a controversial nature.
Judgment for plaintiff in accordance with opinion.
To let the landlord refuse would allow creater weight would be placed on the prejudices and ethically. What if the state interferes with the your decision and they make you rent to someone who you believe to be a murder. Is that still fair?
Footnote 27. It is never “commercially reasonable” to deny consent to a transfer “solely on the basis of personal taste, convenience or sensibility” as the court put it in Kendall. (Kendall is the modern progressive approach)