Heller Property Handout

Week 10

RIGHTS OF LANDLORDS: TENANTS IN DEFAULT Tenant in Possession Common Law: LL entitled to use reasonable force to oust tenant in possession who defaults. Self-help OK if (1) L is entitled to possession and (2) the eviction uses no more force than necessary. o What is reasonable force? Any nonviolent entry OR entry not against tenants will; stringent, may function like Berg Modern (majority) (Berg): Self-help is per se not peaceable, so self-help is not allowed. o Judicial process: Ejectment (common law proceeding); summary eviction proceedings (statutory). Tenant out of Possession Surrender is a tenants offer to end a tenancy. Lease is terminated where (1) T surrenders and (2) LL accepts the surrender. Surrender may be express or implied through abandonment. Can imply acceptance by LL where intent inconsistent with continuation of original lease. Abandonment: Tenant (1) vacates without justification and (2) without present intent to return and (3) defaults on payment of rent. This is a question of fact (see Berg). Damages: After T abandons or L accepts surrender, must LL mitigate? o Traditional rule: No. (Damages will generally be the lost rent.) ! LL can terminate lease ! LL can mitigate ! LL can leave land vacant & collect from T o Modern/Majority rule: Yes. (Damages = [lost rent] [amount recovered] + [reasonable cost of releasing].) Somner. Must use reasonable effort to mitigate; treat like any other vacant property. Burden on LL to show he used diligence. DUTIES OF LANDLORDS Common Law Doctrine of Caveat Lessee At common law, tenant, not landlord, had duty to repair premises. Exceptions: (1) short-term leases of furnished dwellings; (2) duty to disclose latent defects of which the landlord knew or should have known; (3) duty to maintain common areas; (4) duty to undertake promised repairs and to make repairs carefully; (5) duty to abstain from fraudulently misrepresenting condition of premises; (6) in some jurisdictions, duty to abate immoral conduct and other nuisances on landlords property. Implied Covenant of Quiet Enjoyment (ICQE); Constructive Eviction At common law, ICQE existed, but was limited to physical ouster of the tenant. Modern rule: ICQE is breached by either actual or constructive eviction (requiring substantial interference with tenants right to beneficial enjoyment and use of the premises---e.g., no heat). Remedy: Constructive Eviction Actual Eviction Partial No rent abatement; T can T may remain in premises and stop paying rent. Eviction sue for damages Rationale: The landlord may not apportion his wrong. Total T may leave, abate rent, and T may stop paying rent and sue for damages. Berg. Eviction sue for damages. Reste. Waiver where tenant does not vacate within a reasonable time. Implied Warranty of Habitability (IWH) (unwaivable) Under this doctrine, noncasual residential leases contain an implied warranty that the landlord will deliver the premises in habitable condition, and maintain them in that condition during the lease term. Habitability goes to whether housing is reasonably safe and healthy: violation of housing code is evidence, but not conclusive. Elements (see Hilder v. St. Peter) (1) LL had notice of the defect (i.e. T generally must notify L of the defect) (2) LL failed to repair the defect within a reasonable time (3) The defect existed during the time for which rent was withheld Procedures: (1) T may remain in possession and stop paying rent (2) T may pay rent, then sue for reimbursement and damages (3) T may terminate lease and sue for damages (4) T may repair and deduct from rent Damages: o Contract remedies of rescission, reformation, and damages are available to tenant. o Measure of damagesthree approaches: 1. As warranted: difference between FMV of premises in habitable condition (current rent is evidence) and value as is. 2. As is: difference between the agreed rent and the fair market value as-is (Klein). 3. Percentage diminution: a proportionate reduction, i.e. the % difference between the as warranted value and the value

Heller Property Handout

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Week 10

as is. Measures the percentage by which the breach of the IWH reduces the Ts use and enjoyment of the premises. In some jurisdictions, punitive damages may be allowed. ICQE All leases Latent defects T must vacate IWH Residential leases only, with possible exceptions Latent and patent defects T may remain and stop paying rent

! ICQE and IWH Compared Applicability Kinds of defects Procedure

Misc. ICQE and IWH have not been universally adopted Tenants have a duty not to commit voluntary waste (see p. 505). Law of fixtures they become part of the rental ! LL TORT LIABILITY ! Common Law: LL only liable in tort if negligently breaches ICQE or constructive eviction Modern Rule: Allowed in certain narrow circumstances Public use exception injuries to public (only 3Ps, not T or EEs) that arise from dangerous latent defects in property in existence at outset of lease Latent defects in common areas (some courts say not public streets, others allow if danger foreseeable) Injuries from strangers (must provide reasonable security)

INTRO TO EASEMENTS Vocabulary Affirmative Easement: affirmative right to enter land Negative Easement: promise not to do something on ones own land o These are rare and strictly limited Easement Appurtenant: easement which benefits the adjacent land (belongs to owner of land) Easement in Gross: easement which attaches to the owner of easement regardless of land ownership Servient Estate: land burdened by the easement Dominant Estate: land benefited by the easement o These only exist in easements appurtenant Creation of Easements 1. Easement by express grant 2. Easement by express reservation or exception reserved during a grant of land a. Reservations create a new servitude at the same time land is granted to another. i. Common law rule is that these cannot be created in third parties. Some states have altered this (Willard). b. Exceptions exclude a preexisting servitude from the grant. i. These generally cannot be created in third parties. But easily circumvented. Willard v. First Church (Cal. 1972) 1. Is there notice of burden on the land (constructive/record notice)? Yes. 2. Can you reserve an easement in a third-party? Common law: cannot reserve an easement in a third-party (can only reserve for self). Any way around this? New rule: respect parties intent and honor the value of the deal they struck. Here, the grantor sold with intent to reserve an easement, and lowered her price to reflect this. o But, what about the intent of the buyer? If he was informed, he knew it was invalid and just thought he was getting a good deal. PPL Rent Control: The International Experience (Richard Arnott, 415) During the 1970s and early 1980s, nearly all American economists assumed that rent controls were unambiguously harmful. In the wake of developing strands of thought, economists have become more guarded/qualified in their opposition. Essentially, rent control policies are not monolithic, and differ by locality.