Tenants Duty To The Landlord

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Duties to Landlord

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• 1) Obligation to pay rent
I. In exchange for right of possession
II. If there is silence to pay rent, there is implication to pay fair market value.
• 2) Promise to vacate premise at end of term.
• 3) Return the property to the landlord in the same condition as at the commencement.

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WASTE: Promise Return the property to the landlord in the same condition as at the commencement (2 types)

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1. Active
2. Passive

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Active Waste

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i. Injury is failure to return in same condition.
ii. Injury must be permanent
* still active waste even if injury brings more value to the property.

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Sigsbee Holding Co.

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a. Was a residential tenant, leased apartment. Premises had old cabinets, tenant at own expense rips down cabinets and puts in new ones.
b. Landlord brings action of damages, and rules that tenant must do anything that injures the inheritance (waste).
i. Must be injury to holder of property
1. If a tenant materially changes the nature and character of building, it is waste even if the value of the property is enhanced.
ii. Injury must be permanent.

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Brokaw v. Fairchild

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a. Was a one family home, that was 100 ft by 150 ft. In 1913 owner dies and will leaves home to his son for life than to his sons children.

b. In 1920 dad wants to tear down the home. The children bring injunction to stop tear down.
c. Cost more to keep home there than he could get in rent.

*** Cant tear down the apartment

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RPAPL 803 NEW YORK

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1. Estate for life or for years (Allowed to alter premises)
a. Prudent Owner Likely Make
b. Not reduce market value
c. Not violate agreement
d. Own Term is not less than 5 years
i. At time of alteration
e. Prior written notice

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Passive Waste

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Failure to make ordinary repairs, that leads to permanent injury to the premises.

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Passive Waste: If lease is silent

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o Obligation to make repairs is the tenants, not the landlord. But repairs are ORDINARY not substantial


• 1) Does Landlord owe a duty to tenant.
• No breach, so rent still needs to be paid
o Rent is being paid for rent for that land
o No duty the landlord owes

• 2) Must tenant return property in same condition as commencement?
• Failure to make ordinary repairs, that leads to permanent injury to the premises.

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Extraordinary Repair

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If the expenditure required would be substantial in light of the unexpired term of the lease, then its extraordinary repair.



• Hypo: Roof begins to leak, this is a repair that would be required if it leads to injury if not fixed.
o It will cost 1,000 to fix roof
• 18 months left on lease, at 1,000 a month.
• This is insubstantial, so tenant must pay for repair.
o Must remove roof and use new roof for 10,000
• Cost of repair measured against 18,000 is substantial.

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If Lease Expressed Duty To Repair

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o If Lease says “Tenant is required to keep premises in good repair
• When parties add a covenant, it means the intention is to enlarge the tenants obligations.



o "Landlord is required to keep premises in good repair"
• Does landlord have duty to make all repairs?
• Just ordinary repairs
o Starting point is no repairs
o End point is ordinary repairs

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Must you Pay rent when premises are destroyed?

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• Presumption: Must pay rent when premises are destroyed

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Exceptions common law

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• Common Law
o Exception: If the lease covers only a portion of the building, you are excused from obligation to pay rent.

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Exception NY• NY Statue RPL 227

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Absent express written agreement to contrary, T has the right to surrender possession if premises destroyed or become untenable and unfit for occupancy without any fault of T.



o When building is destroyed by elements
o As a result the premises are rendered un tenantable or unfit for occupancy
o Also there must be no agreement to contrary.
• Most landlords put a waiver of RPL 227.
• Implicit in this statute is a “sudden event”, not deterioration over time.

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Remedies when tenant is in default (Not Expressly states in lease)

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1. Forfeiture
2. Remedy of resorting to security deposit
3. Landlord right to self-help

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1. Forfeiture

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Common law:
• Had no right of forfeiture under a breach on the tenant’s part.
• No promise on the tenants part is an essential promise
o Not even promise to pay rent
o Therefore tenants would put it in expressly
o “If tenant shall default in payment of rent or in the performance of any covenant contained in the lease, the landlord may terminate the lease. “

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What must landlord do to terminate lease under forfeiture?

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o Non Automatic Termination
• After default landlord can go to court proving the default, and asking to declare the lease at an end.

o Automatic Termination:
• By giving written notice to the tenant and the lease says, “the term of this lease shall expire when such notice is given. As if said date were the date fixed in the lease for expiration of the term”
• Forfeiture subject to a condition automatic
• Law prefers to avoid forfeiture

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Property Law Hates

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Forfeitures

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4 Equitable defenses to forfeiture

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o Strict construction
o Waiver, if right is not promptly enforced
o There must be a substantial violation of a material promise
o If default is in payment of rent, demand and opportunity to cure is required prior to forfeiture.

****** (No matter what the lease says)

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Strict construction (1)

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• Forfeiture clause was drafted by the landlord, so we interpret the clause very narrowly, so it applies to as few situations as possible.
• Court would interpret the term rent very narrowly

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Waiver, if right is not promptly enforced (2)

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Regardless of what lease provides, a waiver of right to terminate if there is a long delay.

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There must be a substantial violation of a material promise (3)

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Only enforce termination if there is substantial breach of material promise

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If default is in payment of rent, demand and opportunity to cure is required prior to forfeiture. (4)

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Even if lease says that if rent isn’t paid, it can be terminated the next day, it doesn’t matter

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2. Remedy of resorting to security deposit

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• in the event the tenant defaults, the landlord has a right to use the deposit to cure the tenants default
• This is an implied right.
• Tenant has obligation to replenish security deposit.

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3. Landlord right to self-help (Common Law)

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How to regain possession
o At common law was by self-help.
• This is not a wrongful act, lease is already at an end.
o However If forfeiture clause was not automatic, they are retaking possession, which is unlawful.

** Landlord can use whatever force is necessary to retake possession.
o Did not allow killing the tenant, or subjecting tenant to serious personal injury.

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Statutory enactments

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1. Summary proceedings
2. Forcible entry statutes

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NY Summary proceeding Statues

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Article 6 under NY RPAPL (Action in Ejectment)

Article 7 RPAPL, turns on 711 RPAPL
• Subsection 1 holdover proceeding
• After term
• Subsection 2 Nonpayment proceeding
• After term of automatic termination
o This is quick alternative to article 6
o But 711 (2) is change from common law.
• You can disposes a tenant if they fail to pay rent.
• DOES NOT REQUIRE FORFEITURE CLAUSE

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Forcible entry statutes
New York Forcible entry statue (NY RPAPL 853)

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o The landlord must pay treble damages if they take possession in unlawful manner or forcible manner.

• Unlawful:
* When the lease has not come to an end

• Forcible Manner:
* Actual violence against the tenant is prohibited
o Only violence involved in using unusual force.
• A threat of serious personal injury.
o If you don’t violate the statue, the right of self help is still available.

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Majority Rule on forcible entry

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• Residential
o Majority do not allow self help
• Non Residential
o Majority do allow self help

• Prohibition against self help is minority rule.

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1) If there is no forfeiture clause in lease
Goes there next day after fail to pay rent and padlocks premise.

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This is unlawful and therefore not permissible. No forfeiture clause.

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2) The lease has a forfeiture clause. “If tenant defaults in payment of rent the landlord may terminate the lease”

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Unlawful because there must be a court order, lease comes to end only after judicial proceeding.

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3) The lease has a forfeiture clause “if tenant is in default, the landlord may terminate the lease by giving tenant ten days notice, and at expiration, if tenant has not cured the lease comes to an end as if that was expiration date of lease”

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• has landlord acted in unlawful manner?
o NO
• Is the landlords entry forcible?
o No
• Violence against the person is only thing prohibited.

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Duty to mitigate damages

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Common law:
• There is no duty to mitigate damages
o A lease is a property transfer so the landlord has already fully performed.
o He has conveyed exclusive right of possession, now its tenants obligation to perform their side of the transfer.

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Summer v. Kridel: NJ

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• signed lease for apartment
• Engagement got broken up, and wrote letter saying he cant afford the lease
• Tells landlord he can keep the deposit


What do we have to do to perform this duty to perform reasonable diligence.

o They showed the premises, they listed it as available, they put advertisements, contacted a waiting list.
o Leases should be construed as contracts, not property (warranty of habitability)

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Majority rule: Duty to mitigate damages

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• Residential
o There is a duty to mitigate

• Commercial
o No duty to mitigate
• Why difference?
• Commercial tenants better able to protect themselves
• Some states have adopted duty to mitigate because they adopted URLTS, imposes duty to mitigate for residential tenants

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New York Rule (Holy Property v. Kenneth Cole)

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Landlord has 3 options under traditional common law doctrine


o 1. Ignore the surrender and collect all the rent due under the lease
o 2. Accept the surrender, terminating the lease
o 3. Notify the tenant they will re-let on the tenants behalf. (mitigate damages)

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Court impose requirement

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Landlord must give notice to a tenant when the landlord is re letting on the tenants behalf. If they fail to notify the tenant then its presumed they have accepted the offer of surrender.

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Rios v. Carillo (2008) NY

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o The broad language from holy properties and reliance on real property principles negates the possibility that the court of appeals confined leases to commercial leases.

o Since court of appeals hasn’t modified its ruling, we are constrained to follow the established precedent in state of new York.

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If the landlord uses reasonable diligence in seeking another tenant but the new tenant pays a lower rent

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If fair rental value is lower than the amount of rent due, then the previous tenant must pay.

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If the landlord did not use reasonable diligence

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The law presumes if they had used reasonable diligence they would have been able to obtain a tenant who pays fair rental value.

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Fair rental value

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reflects what a tenant would be willing to pay for this premises at this time.

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If the landlord finds a new tenant that pays more than the original tenant paid.

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o Landlord basically acting agent of the tenant to mitigate damages.
• Most courts do not force the landlord to pay the excess to the tenant



• The duty to mitigate resulted because of a wrongful act on the tenants part. (Breach of K)
• No individual should be able to benefit from their own wrongdoing.

Front 42

Tenant who doesn’t need the leased premises, there is one year unexpired on their term and the landlord chooses to relet the premises on the tenants behalf. They act diligently. The only tenant they are able to find insists on a 3 year lease, not a one year lease.

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• The landlord is not required to accept the new tenant.
• A tenant demanding new terms is not a reasonable substitute

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In order for the tenant to protect themselves and avoid the ten day termination period

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I. Asking for declaratory judgment does not stop lease from being terminated
II. Only way to stop is by seeking a temporary restraining order
i. It would freeze the running of the 10 day period.

1. Called a Yellowstone injunction

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Can a tenant assign or sublet

Back 44

MUST READE THE LEASE

Front 45

If the lease makes no mention of the tenants right to assign or sublet.

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Free alienability of property in any manner they choose.


EXCEPTION
Nassau Hotel Case:

i. Lease of hotel property to two individuals who have experience in managing hotels.
ii. Lease provided rent would be 19 percent of gross receipts.
iii. Lease silent and they wish to assign the lease.


****** When the landlord relies on the identity or experience of the tenant, than the concept of free alienability does not apply.

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If Lease says Tenant may not assign their lease without the landlords consent

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i. Strict construction doctrine
1. This only prohibits assignments, not sublets.
2. Policy towards free alienability.

ii. Waiver
Two ways courts have looked at waiver

a. Rule in Dumpors case (unexpected Waiver)
i. If the landlord consents to an assignment they have waived the right to consent to any and all future assignments, unless they expressly retain that right.
1. Court wipe the consent provision out of lease

b. Expected Waiver
i. If the landlord is aware of a transfer and accepts rent from the transferee, they have waived the right from prohibiting the transfer from moving forward.

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Lease says the Tenant may not assign or sublet lease without the landlords consent.

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Majority rule: Where a lease has approval clause, the landlord can arbitrarily deny consent. (No matter how unreasonable)

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Minority Rule:

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This clause requires the landlord to act reasonably.
i. We view a lease as a K. So landlord must act in good faith and fair dealing.
ii. The reason to deny consent was an interest in choosing who occupies.

** However If its proven the transferee is not able to pay rent that’s reasonable to deny consent

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NY Rule (NYRPL 226 B)

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* use majority rule for commercial leases

NYRPL 226 B:
1. If residential landlord does not act reasonably the tenant will be released from all obligations under lease.
2. Whenever there is a sublease of the apartment such consent shall not be unreasonably withheld

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Factors to deny reasonability

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To deny consent to a proposed transferee, must be unacceptable from the point of view from any landlord.

Then they look at Factors:
i. Financial responsibility of proposed assignee
ii. Suitabality of the use for the particular property
iii. Legality of the proposed use
1. Zoning laws
iv. Need for alterations
v. Nature of the occupancy
1. Office building, but new tenant wants to be retail store.
2. This is a luxury office building, but proposed occupant is not a luxury tenant.

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permissible purposes to be served by the restraint are protection of the landlord’s interest in

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1. Preservation of the property and
2. Performance of the leasehold covenants.

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Two basis for liability (Depends on if its assignment or sublease)

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1. Privity of Contract
2. Privity of Estate

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Privity of Contract (Assignment)

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a. Contract exists between the parties
i. Has the landlord executed a K with assignee


1. Pure assignment
a. Parties are tenant and assignee
b. Only party that covenants is the tenant
c. I hereby transfer all of right title and interest to

2. Assignment plus an assumption
a. Parties are tenant and assignee
b. The transferee covenants as well
c. I hereby promise to perform all of your obligations under your lease

3. Assignment plus an assumption plus a release
a. Parties are tenant, the assignee, and the landlord
b. The landlord covenants as well
c. I the landlord release the tenant from all obligations

***** Usually no contract between landlord and assignee

Front 54

Ernst v. Conditt

Back 54

Dividing line that differentiates assignment from sublease


i. Sublease
1. Transfer is for part of the term
a. Can transfer all of the premises but for part of the term
b. Can transfer the entire term but no the entire premises.

ii. Assignment
1. Transfer is for the entire term

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Privity of Estate (Assignment)

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a. Estate has been created by one party
b. The other party hold that very estate
c. Breach of a covenant that runs with the land i.e “inheres in the estate
i. (Sustains the estate and the enjoyment of it for the benefit of both the landlord and tenant)
ii. If obligation is based on property law.

Front 56

Is there implied property law obligation to pay rent?

Back 56

The obligation to pay rent inheres in the leasehold estate as a matter of law.

Front 57

Privity of contract? (sublease)

Back 57

A sublease agreement is one of two types

1. Pure Transfer
a. Original tenant says I hereby transfer the exclusive right of possession, to you but only for period of ____.
i. No K between subtenant and landlord
ii. No cause of action

2. Sublease plus a promise (More common transfer)
a. Subtenant covenants to perform the original obligations under the lease

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Privity of Estate (Sublease)

Back 58

i. Tenant holds the estate
ii. Estate the landlord creates has longer term than one given to subtenant
iii. Estate the subtenant holds is created by tenant
1. Landlord has no cause of action against subtenant

Front 59

Samuels v. Ottenger

Back 59

i. A lease has a duel character, it presents contract and conveyance
ii. Lease has two sets of rights and obligations (Landlord and tenant: privity of estate) (Express promises in the lease: Privity of K)

Front 60

Masonry v. Southworth

Back 60

iv. A covenant to run in the land must have subject matter that sustains leasehold estate and enjoyment of it. must be beneficial to lessor and lessee
1. If the money would go to landlord and no obligation to rebuild, does not sustain the estate.
2. But if the money is required to repair the premises, then its character runs with the land.

Front 61

Davis v. Vidal

Back 61

a. Davis, dallas brewery, vidal
i. Default in payment of rent
ii. Landlord trying to sue subtenant
1. We do not think by the express terms of the agreement between DB and vidal, vidal obligated himseld to Davis
2. There is no privity of K.
3. No privity of estate.