14 UNIT TEN: PROPERTY AND ITS PROTECTION
The Fair Housing Act
The Fair Housing Act of 1968 (42 U.S.C. Sections 3601–3631) is part of the Civil Rights Act of 1968,
one of the three comprehensive civil rights laws that were enacted by Congress in the 1960s. The Civil
Rights Act of 1968 was signed by President Lyndon Johnson seven days after the death of the Reverend
Martin Luther King, Jr., who was assassinated on April 4, 1968.
The act covers all housing built with federal financial assistance, multiple dwellings having more than four
units, single-family homes sold in real estate developments that are not owned by private parties, and any
financing and to brokers, as well as agents and property owners.
The act condemns discrimination on the basis of race, color, religion, national origin, or gender in the sale
and rental of most housing in the United States, whether or not the seller or landlord has an express policy of
Federal fair housing laws are administered by the Department of Housing and Urban Development
(HUD). To obtain relief under the Fair Housing Act, first a complaint must be filed with the secretary of HUD
for conciliation or referral to a state agency when local housing laws provide “substantially equivalent rights
and remedies.”
housing or low-income apartments. For example, HUD cannot approve federal funds for public housing
unless there is a clear showing that there will be no discrimination. There are also federal criminal penalties
government-administered program (e.g., a HUD program).
V. Zoning and Government Regulations
Zoning laws control the speed and type of development within a municipality or other local government region
by regulating the use of property in different zones. This is a constitutional use of a municipality’s police
powers as long as it is rationally related to the community’s health, safety, or welfare.
A. PURPOSE AND SCOPE OF ZONING LAWS
Zoning laws encourage sustainable and organized development, and control growth. Among other
things, zoning ordinances classify land by permissible use as part of a comprehensive plan.
1. Permissible Uses of Land
Generally, municipalities divide land into districts according to present and future uses. The districts
may be divided into subdistricts (for example, a residential district may be subdivided into areas for
single-family homes and areas for apartments). Types of permissible uses are—
• Residential. Here, buildings are constructed for human habitation.
2. Other Zoning Restrictions
Ordinances may dictate details such as the distance a residence must be from a property line, the
B. EXCEPTIONS TO ZONING LAWS
1. Variances
A variance allows an exception to zoning rules (for example, a variance is required to build a
garage closer to a property line than otherwise permitted). A variance must be—
• Necessary for reasonable development.
a. Hardship Situations
A variance may be granted in a hardship situation but a hardship cannot be self-created (that
b. Public Hearing
To obtain a variance, there must be—
• Notice. Neighbors who might object must be notified.
• Public hearing.
• Decision. A hearing examiner determines whether the variance will be granted. If so, it
applies only to the specific parcel of land for which it was requested.
2. Special-Use Permits
A special-use, or conditional-use, permit allows a property owner to use property for a certain
3. Special Incentives
Special incentives (tax credits or lower tax rates) can encourage certain uses (new businesses or
preservation of historical homes) or support environmental goals (energy efficient buildings).
VI. Landlord-Tenant Relationships
16 UNIT TEN: PROPERTY AND ITS PROTECTION
A. RIGHTS AND DUTIES
ENHANCING YOUR LECTURE—
HOW TO NEGOTIATE
A FAVORABLE BUSINESS LEASE
Generally, an entrepreneur starting a business is well advised to lease rather than buy property because
the future success of the business is uncertain. By leasing instead of purchasing property, persons just
starting out in business allow themselves some time to determine whether business profits will warrant the
outright purchase of property.
FACTORS TO CONSIDER
One thing to keep in mind when leasing property is that lease contracts are usually form contracts that
favor the landlord. Thus, as a prospective tenant, you need to think about negotiating terms more favorable to
you. Before negotiating the terms of the lease, do some comparison-shopping to find out the rent for other
similar properties in the area. Usually, rental prices for business property are stated as so many dollars per
square foot (per month or per year). In commercial leases to retail stores, part or all of the rent commonly
consists of a percentage of the tenant’s sales made on the premises during the term of the lease. Bear in
mind, too, that the nature of your business should determine, to a great extent, the location of the leased
premises. If you are involved in a mail-order business, for example, you need not pay the extra price for a
prime location that might be required for a restaurant business.
NEGOTIATING LEASE TERMS
When negotiating a lease, you must also determine who will pay the property taxes, insurance premiums,
and utility bills and who will be responsible for repairs to the property. These terms are generally negotiable,
and depending on who takes responsibility, the rent payment may be adjusted accordingly. Generally, your
success in negotiating favorable lease terms will depend on the market. If the rental market is “good” (that is,
if you have numerous other rental options at favorable rates), you may be able to convince the landlord to be
responsible for taxes, insurance, maintenance, and the like, and possibly for improvements to the property
necessary for your business. Therefore, it is important to investigate the status of the market before you begin
negotiations with a potential landlord.
CHECKLIST FOR THE LESSEE OF BUSINESS PROPERTY
1. When you are starting a business, leasing can be beneficial because it reduces your liability in the event
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that your business is unsuccessful.
3. Make sure that the lease clearly indicates whether the landlord or the tenant is to be responsible for taxes
4. To protect yourself in the event your business is unsuccessful, start with a short-term initial lease,
perhaps with an option to renew the lease in the future.
1. Possession
A landlord is obligated to give a tenant possession of the property at the beginning of the lease
term, and the tenant has the right to retain possession until the lease expires.
a. Quiet Enjoyment
The covenant of quiet enjoyment is the essence of the landlord-tenant relationship, as the text
points out. A breach creates liability for damages.
b. Eviction
• An eviction occurs when a landlord deprives a tenant of possession of the leased prop–
erty or interferes with his or her use or enjoyment of it before the end of the term.
2. Use of the Premises
Generally, a tenant may use leased property in any manner within the terms of the lease (which
impliedly includes uses that are legal, that reasonably relate to the ordinary use of the property, and
that do not harm the landlord’s interest).
3. Maintenance of the Premises
The tenant is responsible for damages, but not ordinary wear and tear. The landlord must comply
with local building codes, which sometimes require that property be maintained in good repair.
ADDITIONAL BACKGROUND—
Maintenance of the Premises
The French civil law in effect in Louisiana at the beginning of the nineteenth century required a landlord to
keep premises in a condition suitable for a tenant’s intended use. Early in their history, California,
Georgia, Montana, and the Dakotas also imposed on landlords a similar duty.
In the late nineteenth and early twentieth centuries, some jurisdictions, including New York and
Massachusetts, enacted housing codes to provide minimum standards for such features as plumbing. Local
18 UNIT TEN: PROPERTY AND ITS PROTECTION
ADDITIONAL BACKGROUND—
Landlord’s Duty to Maintain
In an effort to create more uniformity in the law governing landlord-tenant relationships, the National
Conference of Commissioners on Uniform State Laws published the Uniform Residential Landlord and
Tenant Act (URLTA) in final form in 1972. Of particular interest are the URLTA provisions dealing with the
4. Rent
Generally, a tenant must pay the rent even if he or she refuses to occupy the property or moves
out, as long as the refusal or the move is unjustifiable and the lease is in force. This responsibility
ends if, for example, the building burns down. A tenant may withhold rent if the warranty of
habitability is violated and explains how this is done and how much may be withheld.
ADDITIONAL BACKGROUND
Rent
The rights and obligations of landlords and tenants concerning the payment of rent are discussed in the
text. In Rockstad v. Global Finance & Investment Co., 41 P.3d 583 (Alaska 2002), the Alaska Supreme Court
interpreted rent-payment default and notice provisions in a commercial lease.
Ronald Rockstad operates a dry cleaning and laundry business, Plaza Laundry and Cleaners, in the
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Washington Plaza Mall in Fairbanks, Alaska. Rockstad leases space in Washington Plaza from Global
Finance and Investment Co., which owns the mall. Under the lease, Rockstad paid the rent monthly to
Global’s attorney, James DeWitt, whose business hours ended at 5:00 P.M. DeWitt commonly accepted
Rockstad’s rent payments up to ten days after the first of the month.
“In summary, interpreting subsection 15.4 to require that a second default be preceded by written notice
is textually plausible; it arguably effectuates the reasonable expectations of the contracting parties; and it
renders none of the disputed lease provisions superfluous. This interpretation also resolves subsection 15.4’s
ambiguity in a way that favors continuing the lease and that disfavors the lessor and drafting party, Global.
Accordingly, we conclude that this interpretation of subsection 15.4 should apply to Rockstad’s situation. See
Wessells v. State of Alaska, Department of Highways, 562 P.2d 1042 (Alaska 1977).
20 UNIT TEN: PROPERTY AND ITS PROTECTION
“So construed, subsection 15.4 gave Global the right to declare a second default at any time after
The dissent argued, “The majority concludes that ‘default’ as used in subsection 15.4 contains two of the
three elements of a subsection 15.2 default, failure to pay on time and written notice of such failure. There are
[two] interrelated problems with so defining a renewed default under subsection 15.4.
“The first is that it is not related to either the actual or the objectively measured expectations of the
parties. Neither party contends that it intended or expected that ‘default’ in subsection 15.4 would mean
‘failure to pay on time combined with written notice of such failure.’ Nor do the rules and standards in aid of
……………………….………………………..…………………………………………………………..…..…………….
Notes and Questions
1. The majority cites, in its opinion, Wessells v. State of Alaska, Department of Highways, 562 P.2d 1042
(Alaska 1977). Have students find and read the Wessells case and explain how the legal principles expressed
in that case apply to the facts and issues of the Rockstad case.
2. Ask students, what is the basis for the disagreement between the majority and the dissent in the
Rockstad case? What are the conclusions and supporting arguments for each position?
3. An ethics-based question for students is whether the relative sizes of the businesses in a case such as
Rockstad should affect a court’s interpretation of a lease’s terms.
4. How is the holding in this case of interest to landlords who want their tenants to make timely
payments of rent?
5. Transferring Rights to Leased Property
A landlord can sell, give away, or otherwise transfer his or her real property just like any other real
property owner. The lease remains in effect, and the tenant pays rent to the new owner.
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a. Assignment
The tenant’s transfer of his or her entire interest in the leased property to a third person is an
assignment of the lease. The landlord’s consent may be required, and the tenant remains
liable for the rent.
b. Sublease
Restrictions that apply to assignments also apply to subleases. The text notes examples.
6. Termination of the Lease
A lease can terminate in several ways—
• A lease terminates if its term ends (notice is not normally required).
• A tenant may buy the leased property.
• The parties may agree to end a tenancy before it would otherwise terminate.
• A tenant may abandon the premises.
If a tenant abandons the premises, the landlord may let the property stay vacant and charge the
tenant the rent for the term. But most state require a landlord to mitigate the damages by making a
reasonable attempt to relet the property.
TEACHING SUGGESTIONS
activity could be repeated with a lease.
1. Obtain copies of a standard real-estate sales contract and ask students to discuss whether the apportion-
2. Bring in an actual survey of a parcel of land and show the class how the drawing itself is supposed to
track the courses and distances given in the legal description.
3. Show students a set of the documents used in a local real estate closing. Discuss what each of the
4. Ask students who rent apartments to bring in copies of their leases and discuss the extent to which these
leases make reference to the significant rights, duties and liabilities of the landlord and tenant discussed in
this chapter. Discuss the extent to which the leases can be considered overreaching or unconscionable. How
might these leases be modified so as to correct this problem?
5. Probably few students are landlords or are even familiar with a landlord’s situation. To round out and fill
6. Ask students whether they own any property as joint tenants, tenants in common, etc., and whether they
7. In relation to concurrent ownership, you might explain to students that at common law, unless a clear
intention to create a tenancy in common was shown, there was a presumption that any co-tenancy was a joint
8. Suppose that a city uses its eminent domain authority to acquire property for a private use that
would have an arguably public benefit—for example, suppose the city planned to lease the acquired
property to a private resort that would employ a large portion of the local workforce and bring tourist
dollars into the community. What are arguments for and against such use of the power of eminent
domain? Under the U.S. Constitution, the government has the right to acquire possession of real property for
political process, including large corporations and development firms.
Cyberlaw Link
If the filing of documents under recording statutes is done online, rather than by taking papers to
a government office, what effects might this have in contests over title to property? How might the
Internet affect the principles of landlord-tenant law? Will it make it easier for a landlord to mitigate his
or her damages when a tenant abandons rental property? Will leases become more uniform because
basic forms will be available? Will leases tend to favor tenants as the availability of rental property is
more widely publicized?
DISCUSSION QUESTIONS
1. What is a fee simple absolute? The holder of a fee simple absolute possesses the greatest possible aggrega–
tion of rights in land. The fee simple estate is of potentially infinite duration and may be used for whatever purpose
2. What is the difference between a tenancy in common and a joint tenancy? A tenancy in common is a form
of co-ownership in which each of two or more persons owns an undivided fractional interest in the property. Because
3. What is the difference between an easement and a profit? An easement is the right of a person to make
limited use of another person’s real property without taking anything from the property. Easements are most typically
4. How does a license differ from an easement? A license is the right of a person to come onto another per–
5. What conditions must be satisfied before a person can acquire property by adverse possession? For
property to be acquired by adverse possession, (1) possession of the property must be actual and exclusive; (2) the
6. How might the doctrine of unconscionability affect the validity of leases? A court may declare an entire
lease or any of its clauses to be unconscionable and thus illegal, depending on the circumstances surrounding the
7. What is a retaliatory eviction? A retaliatory eviction occurs when a landlord evicts a tenant for complaining to
a government agency about the condition of the leased premises. Under some statutes, a retaliatory motive will be
8. When may a tenant withhold the payment of rent? The withholding of rental payments is a remedy that is
generally associated with the landlord’s breach of the warranty of habitability. When rent withholding is authorized
9. What is a landlord’s lien and how may it be exercised? Under the common law, the landlord could take and
keep or sell whatever of the defaulting tenant’s personal property was on the leased premises. Today, the landlord
does not have this alternative unless the parties have contracted for it or it is permitted under a statute. Some states
10. Why should the power of eminent domain be used to further economic development? In Kelo v. City of
New London, Connecticut, the United States Supreme Court held that economic development can constitute “public
24 UNIT TEN: PROPERTY AND ITS PROTECTION
ACTIVITY AND RESEARCH ASSIGNMENTS
1. Ask students to call local banks and find out all the costs that are involved in closing a residential real estate
transaction as well as those costs necessary for obtaining a home loan. How much money in excess of the
amount of the loan and down payment is actually required to buy a home?
2. Ask each student to draft a short lease providing for the rental of commercial or residential property.
EXPLANATIONS OF SELECTED FOOTNOTES IN THE TEXT
Footnote 3: Nancy and James Biglane owned a building in Natchez, Mississippi, in which they operated a
gift shop and in which they lived. Andre Farish and Paul O’Malley owned the building next door, in which they
In Biglane v. Under the Hill Corp., the Mississippi Supreme Court affirmed. “One landowner may not use his
land so as to unreasonably annoy, inconvenience, or harm others.” Reasonable use of property does not include
Should the history of a location have any bearing on a determination of the owners’ rights with
respect to the use of their property? In this case, the state supreme court sketched the history of the section of
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What factors might complicate a case that involves similar facts but arises between neighbors across
international borders? Some countries do not recognize the private ownership of property and may not be willing to
At one point, the Biglanes blocked off two parking lots that served the Saloon. Was this an
unreasonable interference with the Saloon’s rights? Explain. The Saloon claimed that the Biglanes’ act was “a
tortious interference with a business relationship.” This requires an act that is intended to, and does, damage a
Could repulsive odors emanating from a neighbor’s property constitute unreasonable interference
Footnote 10: Water flows through a ditch from Oyster Lake in Walton County, Florida, into the Gulf of
Mexico. To prevent the water from overflowing onto private property, the outflow was stabilized with the help of the
In Drake v. Walton County, a state intermediate appellate court reversed and remanded. Before the Hembys
bought their property, the ditch draining Oyster Lake was stabilized, and water did not flow across the property. The
Suppose that instead of Walton County’s diversion of Oyster Lake’s rising water, Hurricane Opal had
flooded the Hembys’ property. Would the result in this case have been the same? Explain. The result in this
Could Walton County have successfully argued that Hurricane Opal flooded the Hembys’ property?