Ch. 29: Real Property and Landlord-Tenant Relationships- No. 11
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
protect against undiscovered defects in title.
Recording Statutes: All states have statutes permitting deeds
to be recorded, thereby giving public notice of ownership and,
if filed, encumbrances. Deeds are generally recorded in the
county (or parish) where the property is located.
Title Examination: After the sales contract has been
negotiated, a party designated in the contract will examine all
recorded transfers of, liens and other encumbrances on, and
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 12
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
ADVERSE POSSESSION
Adverse Possession: Acquiring title to real property by
occupying it, without the consent of the owner, for a statutory
period of time. The occupation must be:
(1) Actual and Exclusive: The possessor must take sole
physical occupancy of the property;
(2) Open, Visible, and Notorious: The possessor must
property against the entire world, and cannot occupy it
with the permission of the true owner.
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 13
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
Eminent Domain Procedure: In order to condemn private
property, a government must
(1) determine that a particular parcel of land is necessary
for public use (e.g., it is the land that separates two
A government that fails to properly condemn private
property and compensate its owner commits an
potentially unconstitutional taking.
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 14
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
RESTRICTIVE COVENANTS
Restrictive Covenant: A private restriction on land use.
A covenant that applies to the initial purchaser of a
property and all subsequent purchasers is said to run
with the land and cannot be separated from the property.
In order to be enforceable, such a covenant must:
constructive notice to any subsequent purchaser or
prospective purchaser of the property.
Illegal Covenants: Not all private restrictions on land
use are enforceable. For example, courts have refused to
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 15
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
ZONING
Zoning laws permit a state or locality to regulate uses of land
without having to compensate landowners.
A landowner may obtain a variance, thus permitting her to
use her land notwithstanding a zoning law, if:
(1) she cannot realize a reasonable return on the land as
zoned;
allow a non-conforming use if she complies with specific
requirements imposed to protect neighboring property
owners’ interests.
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 16
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
LANDLORD-TENANT: POSSESSION
The landlord is obligated to deliver possession of the leased
premises at the inception of the lease, during the term of
which the tenant is entitled to possess and use the premises
until the lease expires.
Covenant of Quiet Enjoyment: The landlord is also
obliged to ensure that no one claiming superior title
Constructive eviction occurs when the landlord
wrongfully performs or fails to perform an essential
duty of the lease thereby making the tenant’s use
and enjoyment of the premises untenable (e.g.,
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 17
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
LANDLORD-TENANT: USE
Unless the lease agreement specifies otherwise, the tenant
may use the leased premises for any legal purpose that does
not injure the landlord’s reversionary interest.
except for ordinary wear and tear, the tenant, his guests,
and invitees causes.
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 18
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
safety, fire, and health codes.
The landlord must also maintain all common areas used
by or accessible to all tenants, such as hallways, stairs,
elevators, and laundry rooms.
Rent: Generally, a tenant must pay rent for the lease’s
duration, even if she refuses to occupy or no longer occupies
the leased premises – unless her refusal to occupy is due to a
breach of the landlord’s warranty of habitability or the
premises are destroyed due to no fault of the tenant.
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 19
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
LANDLORD-TENANT: TRANSFER
Transferring the Landlord’s Interest: A landlord may sell,
give away, or otherwise transfer his property. However, the
existing lease agreement continues in force with the new
owner assuming the landlord’s rights (e.g., to collect rent) and
duties (e.g., maintaining habitability).
to transfer all of his rights, title, and interest in the lease
to another person (the assignee).
While an assignment divests the assignor of his
rights in the leased property, unless the landlord
tenant’s full interest in the lease.
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 20
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
LANDLORD-TENANT: TERMINATION
By Notice: A lease that is self-renewing does not terminate
automatically; therefore, the landlord must provide a notice of
termination to the tenant (or vice versa).
agree to terminate the lease before it expires.
Abandonment: If a tenant abandons leased property, the
landlord may treat the abandonment as terminating the lease.
A tenant who abandons the leased premises remains
obligated to pay rent for the remainder of the lease term
unless the landlord finds another tenant.
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 12
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
ADVERSE POSSESSION
Adverse Possession: Acquiring title to real property by
occupying it, without the consent of the owner, for a statutory
period of time. The occupation must be:
(1) Actual and Exclusive: The possessor must take sole
physical occupancy of the property;
(2) Open, Visible, and Notorious: The possessor must
property against the entire world, and cannot occupy it
with the permission of the true owner.
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 13
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
Eminent Domain Procedure: In order to condemn private
property, a government must
(1) determine that a particular parcel of land is necessary
for public use (e.g., it is the land that separates two
A government that fails to properly condemn private
property and compensate its owner commits an
potentially unconstitutional taking.
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 14
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
RESTRICTIVE COVENANTS
Restrictive Covenant: A private restriction on land use.
A covenant that applies to the initial purchaser of a
property and all subsequent purchasers is said to run
with the land and cannot be separated from the property.
In order to be enforceable, such a covenant must:
constructive notice to any subsequent purchaser or
prospective purchaser of the property.
Illegal Covenants: Not all private restrictions on land
use are enforceable. For example, courts have refused to
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 15
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
ZONING
Zoning laws permit a state or locality to regulate uses of land
without having to compensate landowners.
A landowner may obtain a variance, thus permitting her to
use her land notwithstanding a zoning law, if:
(1) she cannot realize a reasonable return on the land as
zoned;
allow a non-conforming use if she complies with specific
requirements imposed to protect neighboring property
owners’ interests.
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 16
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
LANDLORD-TENANT: POSSESSION
The landlord is obligated to deliver possession of the leased
premises at the inception of the lease, during the term of
which the tenant is entitled to possess and use the premises
until the lease expires.
Covenant of Quiet Enjoyment: The landlord is also
obliged to ensure that no one claiming superior title
Constructive eviction occurs when the landlord
wrongfully performs or fails to perform an essential
duty of the lease thereby making the tenant’s use
and enjoyment of the premises untenable (e.g.,
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 17
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
LANDLORD-TENANT: USE
Unless the lease agreement specifies otherwise, the tenant
may use the leased premises for any legal purpose that does
not injure the landlord’s reversionary interest.
except for ordinary wear and tear, the tenant, his guests,
and invitees causes.
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 18
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
safety, fire, and health codes.
The landlord must also maintain all common areas used
by or accessible to all tenants, such as hallways, stairs,
elevators, and laundry rooms.
Rent: Generally, a tenant must pay rent for the lease’s
duration, even if she refuses to occupy or no longer occupies
the leased premises – unless her refusal to occupy is due to a
breach of the landlord’s warranty of habitability or the
premises are destroyed due to no fault of the tenant.
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 19
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
LANDLORD-TENANT: TRANSFER
Transferring the Landlord’s Interest: A landlord may sell,
give away, or otherwise transfer his property. However, the
existing lease agreement continues in force with the new
owner assuming the landlord’s rights (e.g., to collect rent) and
duties (e.g., maintaining habitability).
to transfer all of his rights, title, and interest in the lease
to another person (the assignee).
While an assignment divests the assignor of his
rights in the leased property, unless the landlord
tenant’s full interest in the lease.
Ch. 29: Real Property and Landlord-Tenant Relationships- No. 20
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
LANDLORD-TENANT: TERMINATION
By Notice: A lease that is self-renewing does not terminate
automatically; therefore, the landlord must provide a notice of
termination to the tenant (or vice versa).
agree to terminate the lease before it expires.
Abandonment: If a tenant abandons leased property, the
landlord may treat the abandonment as terminating the lease.
A tenant who abandons the leased premises remains
obligated to pay rent for the remainder of the lease term
unless the landlord finds another tenant.