Property Ii

Front 1

What can a landlord do if a tenant defaults?

Back 1

there are a variety of remedies available to a landlord to deal with a tenant's default under the lease. Some are the product of a lease provision, others are provided by satute, and others are still old common law remedies.

Front 2

Eviction

Back 2

CL - lease covenants were regarded as independent, this did not allow land lords to evict for default. The landlord could only sue for unpaid rent
Modern- since lease coveants are regarded as depedednt, statutes allow landlords to terminate the lease and evict the tenant for nonpayment of rent, but usually not for breach of most other lease covenants. Of course in both modern and cl- landlord could evict holdover tenants

Front 3

Ejectment

Back 3

was the traditional common law remedy and is still available. It isnot used much because it is not a summary proceeding and so not entitled to any calendar preferece. A tenant in ejectment action is entitled to plead and prove any affiramte defense or counter claim and can implead third parties

Front 4

Landlord Self-Help

Back 4

Common Law- landlord was entitled to use reasonable force to oust the tenant himself.

Front 5

NO Self-Help

Back 5

A few states forbid self help. In these states, a tenant amy recover personal property damages if ousted nonjudicially by the landlord.

Front 6

Berg V. Wiley
(example of no self-help)

Back 6

 The Court affirmed that ruling, declaring that “the only lawful means to dispossess a tenant who has not abandoned or voluntarily surrendered but who claims possession adversely to a landlord’s claim of breach of a written lease is by resort to judicial process.” (Clearly getting rid of self help in Minnesota)

 The rationale for this “modern rule” is that self-help always carries with it the risk of violence or other breach of the peace. The common law response was that peaceful self-help was valid, but self-help that involved breach of the peace was wrong-ful. The landlord assumed the risk of breach of the peace by engaging in self-help.

Front 7

Tenant abandonment

Back 7

If a tenant abandons the leasehold premises in the midst of a valid lease is regarded as having surrendered the lease.

Front 8

What happens when the tenant has surrendered the lease?

Back 8

1.) Accept the offered surrender and terminate the lease

2.) Reject the surrender by leaving the premises untouched, thus preserving the landlord's entitlement to rent as it comes dur for the remainder of the term.

3.) Retake possession and relet the premises for the benefit of the tenants.

Some jurisdiction will not allow the number 2 option and that forces the landlord to mitigate his damages

Front 9

What happens if the landlord picks (option one) to terminate the lease?

Back 9

Tenant obligations cease at the moment of terminatino and surrender, not the moment of abandonment. Similarly, if the landlord elects to terminate, termination become the landlord's exclusive remedy. The tenant's liability for unpaid reant accures to the moment of termination plus damages caused by abandonment.

Front 10

Damgaes that the Landlord can get for termination

Back 10

- transactional costs of finding a new tenant
- plus whatever shortfall exists between the lease rentals for the remainder of the surrendered lease and the fair market value of that remainder.

At Common Law- the landlord was not entitled to any damages.

Front 11

Damages for Termination:
Doctrine of
Anticipatory repudiation

Back 11

some states apply this doctrine of anticipatory repudiation to lease (because leases are contracts as well) and permit the landlord to recover damages when the the tenant has make it clear that he is not only abandoning but denies any further lease obligations. Damages recoverable are limited to a period in which such damages can be "reasonably forecast."

Front 12

Damages Option Two:

Leave the Premises Untouched

Back 12

The tenant is free to abandon his property but is still liable to pay for the payments if the landlord elects to leave the permises undisturbed. (Rejects that the landlord has a duty to mitigate, and not in most jurisdictions)

Front 13

Damages Option Three:

Retake and relet for the tenant

Back 13

A landlord may retake possession and relet the premises for the tenants account either voluntarily or pursuant to a duty to mitigate damgaes imposed by law.
Issue 1: Voluntary action
Here the landlord has to be careful because if the landlord voluntarily retakes possession and relets on the tenants account, he must be careful that it doesn't look like he is accepting surrender. (reletting without notice to the tenant constitutes acceptance of surrender) He want to avoid the view of surrender because the tenant is still obligation to pay rent.

Issue 2: Duty to Mitigate Damages
Most states how hold that a landlord is not free to do nothing after tenant abandonment, but should be held to a duty to mitigate damages caused by the tenant's abandonment.

Front 14

Duty to Mitigate:

Sommer V. Kridel

Back 14

Kridel leased an apartment from Sommer for a 2-year term, beginning May 1, 1972. On May 19th, 1972 Kridel wrote Sommer that his impending marriage would not occur and that as a result he had neither a need for the aparment nor the funds to pay the rent. He explicitly offered to surrender the lease and aggred to forfeit the two-months rent he had prepaid. Sommer did not reply and refused to show the apartment to prospective tenants who were ready, willing and able to rent it. On Sept 1st, 1973 Sommer finally rented the apartment and sought damgages for unpaid rent from Kridel for the period May 1972- Aug 1973.

The NJ Supreme Court overruled the prior common law rules and held that a landlord had a duty to mitigate damages once a tenant has abandoned. This rule promotes use of scare housing resources and avoids deadweight losses. In sommer the NJ court imposed the burden of proof on the landlord to show that he had exercised reasonable diligence to relet the apartment and that in doing so he had treated the abandoned apartment as one of his vacant stock. That may be the minority rule.

Front 15

What are landlord remedies that are typically derived from lease provisions?

Back 15

Rent Acceleration, Security Deposits, Liquidated damages, Confession of Judgement

Front 16

Rent Acceleration Clause

Back 16

makes the rent for the entire balance of the term immediately payable (if the landlord elects) upon a tenant default under the lease. If a landlord elects to accelerate rent she may not terminate the lease. By accelerating rent the landlord has chosen to enforce an immediate sale of the balance of the lease term.

Prepaid Rent: (same idea as acceleration) if a T prepays rent (last month's rent) the LL is entitled to retain the prepaid rent if the tenant terminates without justification before expiration of the lease term.

Front 17

Security Deposit

Back 17

The LL is indebted to the tenant and must return the deposit at expiration of the leasehold, less any charges attributable to tenant default.

Front 18

Liquidated Damages:

Back 18

amount probably reasonable to the amount of damages suffered by the landlord upon tenant default.