978-0077733711 Chapter 25 Lecture Note

CHAPTER

25

LANDLORD AND

TENANT

I. OBJECTIVES

This chapter is designed to acquaint students with the legal doctrines and trends affecting

the

landlord-tenant relationship. After reading the chapter and attending class, a student should

be

able

to:

1. Recognize that the legal principles applicable to landlord-tenant relationships are drawn

from

property law, contract law, and the law of negligence and that they incorporate the

common·

law as well as legislative

enactments.

2. Describe and differentiate the four main types of

tenancies.

3. Understand the importance of a carefully drafted lease that makes clear the parties’ rights

and

obligations and complies with any applicable provisions of state Law, including the statute

of

frauds.

4. List and discuss the primary rights, duties and liabilities of the

landlord.

5. List and discuss the primary rights, duties, and liabilities of the

tenant.

6. Describe the different ways that a lease may be terminated and identify the legal

principles

that apply to each method of

termination.

II. ANSWER TO

INTRODUCTORY PROBLEM

A. The first question following the hypothetical that appears at the beginning of the chapter

asks

whether an oral agreement can create an enforceable lease. As transfers of interests in

land,

leases are usually covered by the statute of frauds. In most states, a lease for a term of

more

than one year from the date it is made is unenforceable unless it is evidenced by a

suitable

writing signed by the party to be charged. A few

staies,however,

require leases to

be

evidenced by a writing only when they are for a term of more than three

years.

B. The second question asks whether the tenants’ rights were violated when they were unable

to

take possession on the first day of the lease term. One of the

landlord’s

obligations is

the

implied warranty of possession that guarantees the tenant’s right to possess the property

for

the

term of the lease. This warranty would be violated if the tenant is unable to

take

possession

on the first day of the lease

term.

C. The third question asks what responsibility the landlord might have to a third-party who

was

injured on the premises. The answer to this question may vary from state to state.

However,

the trend is to impose on the landlord a duty to use reasonable care to carry out any duty

to

make

repairs-and

to hold the landlord liable for injuries sustained by a tenant or

third-party

if he/she had notice of a defect and a reasonable opportunity to make

repairs.

D. The fourth question asks whether the tenants have the right to claim constructive

eviction,

leave the premises and obtain their security deposit. Where the property is unsuitable

for

occupancy because of the

actions-or

failures of the

landlord-the

tenant would have

the

right to claim constructive eviction if he/she gives the landlord reasonable notice

and

opportunity to fix the problem and promptly vacates the premises if the problem is

not

remedied by the landlord. Where the tenant can properly claim constructive eviction,

the

landlord would be obligated to return the security

deposit.

Chapter 25 – Landlord and

Tenant

25-1

©

2016 by McGraw-Hill Education.

This is

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authorized instructor use.

Not

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in

any

manner. This document may

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website,

in

whole

or

part.

E. The fifth question asks whether it would be ethical for the landlord to tell the students

he

would clean up the house knowing that he did not intend to do so. There is no

ethically

sound rationale for doing so on these

facts.

III SUGGESTIONS FOR LECTURE

PREPARATION:

A. h1troduction

1. Introduce the topic by noting the evolving changes in landlord-tenant law over the

last

three to four decades. These changes have been the legal response to the evolution from

a

primarily rural and agricultural society to a primarily urban and industrialized

society.

Point out that there are significant disparities in bargaining power, knowledge,

and

control between landlords and tenants. These factors, together with the huge numbers

of

tenants (who can be powerful allies for politicians), have led to increasing

legal

protection for

tenants.

2. Discuss the dual nature of the lease as both contract and conveyance of property.

Discuss

the various types of leasehold interests. You may want to bring in a copy of a form

lease

used in your locality and highlight the important

provisions.

B. Types

of Tenancies

1. Explain and give examples of the various types of tenancies. Discuss how each type

of

tenancy is

terminated.

a. Discuss the dangers of “holding over” after the termination of another

tenancy.

C. Landlord’s Rights and

Duties

1. Note the right of the landlord to receive rent and to receive the return of the

leased

premises in as good a condition as it was at the beginning of the lease, ordinary wear

and

tear accepted. You might point out that most leases also provide that the tenant will

pay

any attorney’s fees the landlord incurs in an effort to obtain past-due rent. Some

states,

however, hold such clauses unenforceable as violations of public

policy.

a. Discuss the role security deposits play with regard to unpaid rent and damage to

the

premises beyond ordinary wear and tear. Discuss modern statutes and ordinances

that

place limitations on security deposits and impose requirements on landlords

who

wish to retain all or part of a security deposit. If your jurisdiction has such a statute

or

ordinance, use it as an

example.

Example: Problem Case

#2

b. Note that when the tenant breaches the lease by abandoning the property and

ceasing

to pay rent, the landlord will often have a duty to mitigate damages by

making

reasonable attempts to re-rent the premises, rather than doing nothing and

letting

unpaid rent pile up month after month. However, not all states require landlords

to

mitigate

damages.

Example: Problem Case

#9.

2. Discuss the landlord’s duty to comply with the Fair Housing Act. Explain the

statute’s

prohibited bases of discrimination in connection with the rental of housing. Note

the

various ways in which the Fair Housing Act may be violated. Discuss the public

policy

concerns underlying the

statute.

a. Briefly note that state statutes and city ordinances sometimes prohibit landlords

from

discriminating on grounds that go beyond those set forth in the Fair Housing

Act.

3. Discuss the landlord’s traditional duties: the implied warranty (or covenant) of

possession

and the implied warranty (covenant) of quiet enjoyment. Note that under traditional

law,

the landlord had no further duties once he had turned over control of the property to

the

tenant.

a. Point out that the warranty of quiet enjoyment means that the landlord does not

have

the right to enter leased property during the term of the lease unless there is an

emergency, a need for repairs to be conducted, or the parties have so

agreed.

Sometimes, the warranty of quiet enjoyment may be breached by the

landlord’s

repeated failures to take reasonable action to eject, from the leased premises,

persons

who frequently come upon the premises and substantially interfere with the

tenant’s

ability to enjoy the

property.

b. Define constructive eviction. Give some examples of breaches of duty that could

lead

to constructive eviction. Discuss the sort of proof the tenant must furnish to

establish

constructive eviction. Note that the tenant would have to have left the property

after

giving the landlord a reasonable chance to repair the breach. Discuss the

drawbacks

of constructive eviction, especially for the low-income residential tenant living in

an

area in which there is a shortage of affordable

housing.

Example: Problem Cases #3 and

4.

4. Discuss how and why the landlord’s legal responsibility for the quality or condition

of

leased property has changed. Note how these changes have paralleled the caveat

venditor

trend in product liability

law.

a. Discuss the development and significance

of the

implied warranty of habitability as

it

applies to the rental of residential housing. Relate it to the development of the

same

warranty in the sale of housing and the implied warranty of merchantability in

the

sale of goods. Emphasize the continuing nature of the landlord’s responsibility

under

this warranty: the property must be in habitable condition when rented and

the

landlord must maintain it in habitable condition during the term of the

lease.

1) Explain that trivial defects do not constitute a breach of warranty. Courts look

for

a defect that, under modern community standards, renders the property unsafe

or

unsuitable for

habitation.

2) Explain that a tenant must give a landlord notice of the defect and a

reasonable

opportunity to repair the defect before taking action under the implied

warranty.

3) Note that the warranty applies only to residential property.

It

does not apply

to

property leased for commercial

purposes.

4) Note that some states give this warranty a broader scope of applicability

then

other states

do.

5) Discuss the effect that housing codes have had in the development

and

application of this

warranty.

6) Discuss the remedies for breach of the warranty. Discuss which of these

remedies

are used in your state. Note that constructive eviction is

unnecessary.

Brooks v. Lewin Realty III, Inc. (page 704). Where a

tenant’s

grandson was injured

as a result of his exposure to peeling, chipped and flaking lead paint and the

city’s

housing code required that dwellings be kept in good repair, including free

of

peeling, chipped and flaking paint, the landlord could be held liable for the

tenant’s

injuries whether or not it had actual knowledge of the housing code

violations.

Points for Discussion: Lay out the differences in the views of the majority on

the

court and those of the dissenter. What are the practical consequences for

landlords

and for tenants of the view of the law taken by the majority? Ask the students

which

view they agree

with-and

why they prefer that

view.

Examples: Problem cases #1 and

#4.

Ethics in Action: Disclosing Possible Hazards to Tenants (page 712). This

scenario

raises the question whether there is a duty to disclose a hidden danger to

individuals

who are affected by that danger. The presence of lead-based paint is not an

obvious

danger, and is one about which the landlord is likely to have greater knowledge

than

would the tenants. The presence of lead-based paint is a material fact. Knowledge

of

this danger may permit tenants to avoid serious harm. Thus, even though the

state

statute does not forbid the rental of such units, modern disclosure principles

would

probably require

disclosure.

b. Note that landlords who lease places of public accommodation may face

obligations

under Title III of the Americans with Disabilities Act, which was discussed

fairly

extensively in Chapter

24.

c. Discuss landlords’ expanding tort liability. Note that landlords once were

immune

from liability for injuries occurring on the part of the property that was under

the

tenant’s control, on the theory that the tenant had exclusive possession of

the

property. Discuss the exceptions to the no-liability rule that were developed

by

courts. Note that the trend today is against doing away with the complicated

system

of immunity and exceptions. Instead, the trend is toward placing responsibility on

landlords to use reasonable care in maintaining leased property. Courts have also

held

that landlords have the duty to use reasonable care to select other tenants

carefully

and to control

them.

Matthews v. Amberwood Associates Limited Partnership, Inc. (page 708) Where

the

landlord was aware of the presence of a vicious dog, a pit bull, in an apartment

where

the tenant had signed a lease agreeing, among other things, not to have any pets

on

the premises, a jury could find that the landlord had breached its duty of care to

a

visitor to the apartment whose son was killed by the animal because the

landlord

knew of the animal’s presence and had the authority to do something about

it.

Points for Discussion: Note the strong dissent in this case with much

of the

dissenter’s ire directed at the majority which, in the dissenter’s view, had not

given

adequate attention to whether there was contributory negligence or a

superseding

cause that the jury should also have been allowed to consider. Ask the

students

which they think is the preferable view as to whether a landlord should have a

special

duty in cases like this to affirmatively protect a visitor to the

premises.

Example: Problem Case

#6.

1) Discuss

landlord’s

attempts to eliminate tort liability to tenants by

including

exculpatory clauses in leases. Note the increasing tendency of courts

and

legislatures to disapprove of exculpatory clauses, at least when they appear in

leases of residential (as opposed to commercial)

property.

2) The proliferation of housing codes and other statutory regulation of landlords

is

likely to increase the use of the negligence per se theory as a basis of

liability

(see Chapter

7).

3) Point out that landlords today may be held liable when inadequate security

or

negligent maintenance of property facilitates criminal attacks on tenants

and

licensees by third parties. This can be a major concern for owners of property such

as

shopping malls or apartment buildings. (Chapter 24 contains further discussion

of

this

topic.

)

Tan v. Arne! Management Company (page 713). In this case the court found

that

the landlord had violated its duty to the tenant when the tenant was attacked

by

an assailant in the parking lot of an apartment complex. The court began

by

noting that to succeed in a negligence action, the plaintiff must show that: (1)

the

defendant owed the plaintiff a legal duty, (2) the defendant breached the

duty,

and (3) the breach proximately or legally caused (4) the plaintiff’s damages

or

injuries. The scope of a landowner’s duty to provide protection from

foreseeable

third-party criminal acts is determined in part by balancing the foreseeability

of

the harm against the burden of the duty imposed. The higher the burden to

be

imposed on the landowner, the higher the degree of foreseeability that is

required.

Example: Problem Case

#7.

D. Tenants’ Rights and

Duties

1. Discuss the tenant’s rights to exclusive possession and quiet enjoyment, noting that

these

rights are the flip sides of previously discussed duties of

landlords.

2. Discuss the obligation to pay rent. Point out that co-tenants have joint and

several

liability. Give an example of how this would work

if two

people leased an

apartment

together and one of them moved

out.

3. Discuss the tenant’s duty not to commit waste or to do any act that would harm

the

landlord’s reversion. Note the change in the law regarding whose obligation (landlord’s

or

tenant’s) it is to make

repairs.

4. Discuss the transfer

of leasehold

interests through assignments and subleases.

Distinguish

the two and show the practical effect of the distinction. Emphasize that a tenant

cannot

escape liability under the lease by assigning or subleasing. Note that leases may

prohibit

or limit assignment or

subleasing.

5. Note also that a tenant may be liable for harm suffered by a third party on

leased

property that is under his control

if

the injury was caused by the tenant’s

negligence.

E. Termination of

Leaseholds

1. Discuss eviction. Note the typical procedures for eviction and the legal limits (such

as

forcible entry and detainer statutes) on the landlord’s recovery of the leased

property.

Example: Problem Case

#8.

2. Note that tenancies may end by mutual agreement (agreement to

surrender

).

3. Discuss the consequences of a tenant’s abandonment of leased property before

the

termination of the lease. Emphasize the trend toward placing the duty on the landlord

to

mitigate damages. This duty normally obligates the landlord to make reasonable efforts

to

re-rent the premises to someone else, instead of simply letting the breaching tenant’s

past

due rent obligation continue to mount while the premises sit

unoccupied.

Sylva Shops Limited Partnership v. Hibbard (page 717). The court concluded that it

was

not against the public policy of the state of North Carolina to allow the parties to a

commercial lease contract away the landlord’s duty to mitigate damages in the event of

a

default by a

tenant.

Points for Discussion: Ask the students to identify arguments in favor a rule that

landlord

s

must mitigate damages. Which arguments are stronger–those in favor of a mitigation

rule

or those in a favor of a no-duty-to-mitigate rule? Note that even if a landlord has no

legal

obligation to mitigate, the landlord might want to do so for practical reasons such

a

s

getting the rent payments flowing again sooner (if a replacement tenant can be found)

an

d

perhaps avoiding the need for potentially expensive

litigation.

Should commercial and residential landlords be treated differently in terms of

whether

there is a duty to mitigate damages? Why or why

not?

Example: Problem Case

#8.

IV. RECOMMENDED

REFERENCES:

A. David Hill, Landlord

and

Tenant

Law

in

a

Nutshell

(5

111

edition), West,

2010.

B. Janet Portman, Every

Tenant’s

Legal

Guide (3d ed.

2002).

C. American Landlord Law: Everything U Need to Know About Landlord-Tenant

Law

(

McGraw-Hill

)

..

D. Susan Bright, Landlord-Tenant Law: Past, Present and Future

(2006).