Property 2

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  1. Types of Leasehold estates

    Pages 421-422; Problems 1 and 2 on page 422; pages 422-423 (paragraph on tenancy at will); pages 427-428.
    Term of Years 

    Periodic Tenancy 

    Tenancy at Will

    • Other: 
    • So-called "tenancy" at sufferance
  2. Term of Years
    An estate that lasts for some fixed period of time or for a period computable by a formula that results in fixing calendar dates for beginning and ending dates.

    NO notice to terminate is required - the end date is in the last or the computable formula
  3. Tenancy at Will
    Continues as long as BOTH the L and T wish it to continue.

    NOTICE -

    under common law: none required.

    under statutes: often 30 days 

    If rent it paid then periodic tenancy is created.
  4. Periodic Tenancy
    A lease for a period of some fixed duration that continues for succeedding periods until either the landlord or tenant gives notice of termination.

    ie: from month to month

    year to year = requires at least 6 months notice. 

    less than a year = requires notice equal to the period required; ie month to month - 1 month notice - with a maximum of 6 months.

    and must terminate the tenancy on the final day of a period. ( which may fall in the middle of the month )

    Implied Periodic Tenancy - annual rental of X - is payable Y per month. Common Law based on the way rent is reserved

    If rent is calculated on an annual basis but paid on a monthly basis then L & T must give 6 months notice.
  5. Common Law rule on notice of termination of Periodic Tenancy
    Under common law 6 months notice is required to terminate a year to year lease.
  6. How is a lease hold looked at?
    Thought of as a conveyance of property
  7. Traditional view of landlord vs tenant
    Landlords had more rights than tenants - ie were not responsible for fixing problems with property. Tenant looked down upon / had fewer rights.
  8. What is a conveyance
    A "conveyance" is the transfer of an interest in real property, such as a home or commercial real estate.  A conveyance occurs when the owner of property, a grantor, uses words of conveyance to transfer an interest in property to a grantee, the person receiving the property.
  9. Lease as conveyance or as contract:

    Leased building destroyed by fire - NOT through fault of T; no pertinent lease provision.
    Traditional View: Tenant responsible for continuing to pay rent. 

    Modern View: Impossibility of performance by L - so T performance is excused.
  10. On many issues under current law there exist;
    a traditional common law rule;

    a modern common law rule = still considered minority view

    and statutory variations
  11. Tenancy at sufferance
    When T holds over after end of a tenancy L has an election:

    • 1. Evict (T)
    • 2. hold T to a new tenancy - the jurisdictions law provides what kind of tenancy and for how long - called the HOLD OVER Doctrine

    Courts dislike holdover tenancies.

    Statute very : 

    CA. new tenancy created, not exceeding one month when rent is payable monthly.

    Other states - L may collect double rent. 
  12. Delivery of Possession
    Concept of Quiet Possession

    The 3 issues 

    The 2 rules
  13. When Is the Covenant of Quiet Enjoyment Violated?
    A person’s rights to quiet enjoyment of property are violated if:

    The landlord commits wrongful acts against the plaintiff or the property

    The landlord commits negligence or some other act of omission (such as failing to repair dangerous conditions)

    The property becomes uninhabitable

    • A third party attempts to claim the property by challenging the lease or title
    • Thus, the right to quiet enjoyment is not limited to noise violations or acts of nuisance.

    Instead, the quiet enjoyment focuses more on a person’s right to possess property without having the title to the land challenged by another party.
  14. What is Quiet Enjoyment
    Quiet Enjoyment is the right to the unimpaired enjoyment and use of any property that has been leased, sold, or conveyed. The right to quiet enjoyment is sometimes expressed through a “Covenant of Quiet Enjoyment” that is contained in the lease or deed of sale. If the right to quiet enjoyment is not specifically listed in a document, most jurisdictions will imply the right if a landlord-tenant or seller/buyer relationship exists between the parties. This is also known as the “implied covenant of quiet enjoyment”, meaning that the tenant or buyer can exercise this right even if it is not specifically stated in the lease agreement.

    L duty to assure T "QE"

    Under older common law, lease promises were independent. 

    thus a breach by L DID NOT give T the right to stop paying rent. (But T could recover damages)

    One EXCEPTION always existed - T obligation to pay rent was DEPENDENT on the T having possession undisturbed by L
  15. Delivery of Possession 

    Distinguish 3 issues
    1. Ls duty to deliver legal right to possession from (contract)

    2. Ls duty to protect T against third party trespassers after T in possession 

    3. Ls duty to assure T physical possession at beginning of lease term
  16. Delivery of Possession - 2 Rules
    • The American Rule:
    • L has implied covenant only to give T legal right to possession, 

    • not to put T in physical possession.
    • (reflects lease as a conveyance or a contract)

    The English Rule:

    L has two implied covenants: 

    1) to give T legal right to possession AND to deliver physical possession at the beginning of the lease term.
  17. QE - Remedies
    English Rule - incoming T may terminate and recover damages, OR T may affirm lease, not pay during time kept out, plus damages. 

    American Rule - Incoming T has the remedies of L against a holdover T.
  18. Subleases & Assignments
    1. Distinguish between them.

    2. The consequences of a transfer being one or the other. 

    L can also transfer her interest, sometimes also called an assignment. (L's interest is a reversion)
  19. Following transfer who can L collect rent from.
    • Depends on who is in PRIVITY with whom...
    •   Was this a transfer or an assignment
  20. Distinguish Subleases from Assignments
    1. Formalistic  - "fixed legal test"(MAJORITY)

    2. The " intention of the party"
  21. Fixed legal test - in transferring
    Transfer of full remaining term results in an ASSIGNMENT - So Mike renting my house until June 2015 

    If less than a FULL interest then transfer is a SUBLEASE - So Mike renting my house for 3 months

    If T retains right to re-enter on transferee's default, still an assignment (under slight majority)
  22. The intention of the parties test
    Supposedly words used are not conclusive. (but often determinative anyway)

      Search for indicators of intent, ie if T transfers for a lump sum payable up front, suggests an assignment.
  23. Sublease
    Subtenancy is carved out of the head/original leasehold. 

    T then becomes landlord to T1 - 2 land lords and 2 privity of estate.
  24. Bases for liability of transferees (and Landlords)
    1. Privity of Contract 

    2. Privity of Estate
  25. Privity of Contract
    requires an enforceable agreement 

    3rd party beneficiaries can enforce 

    continues until release or end of the lease

    def; Legal doctrine that a contract confers rights and imposes liabilities only on its contracting parties. They, and not any third-party, can sue each other (or be sued) under the terms of the contracts.Read more
  26. Privity of Estate
    what exists between an L and a T 

    created to make assignees liable to L

    When a sublease occurs between T and T1 - there is NO privity of estate between L and T1
  27. Headlease
    Original lease between L and T 

    sublease and assignment are between T and T1

    Privity of Estate & Contract require T subordinate to L
  28. Problem 3 - Pg 449 

    L --- T --- T1 --- T2 --- T3

    What parties are liable to L ? 

    What liabilities among the Ts?
    T ; T1 ; T3 

    If L collects from T - then T can collect from T1 or T3. ( T is a surety who by subrogation stands in Ls place )
  29. Restriction on Transfer by T
    The general rule re: transfers. 

    T shall not assign or sublease the premises without prior written consent of L. 

    Example of Forfeiture clause:

    Failure to obtain Ls consent renders lease voidable at option
    of L.

  30. Dunbar Case - 1578


    Restatement (Second) 1977
  31. Hold Over Doctrine ( not otherwise in default)


    hold to new tenancy
  32. Tenant in Possession and Holding Over
    Berg vs. Wiley

    T v. L for wrongful eviction; Ls defenses are abandonment and surrender.
  33. T in Possession and in Default
    A. Hold Over

    B. Evict
  34. T - Out of Possession 
    A. T expressly "surrenders"


    B. T has "abandoned" 
  35. T out of Possession

    T expressly surrenders - 476-477

    L must accept - but can require T to pay or sue for damages. 

    If L accepts then lease terminates and future rent is wiped out/extinguished.
  36. T out of Possession 

    Abandoned = an implied surrender

    See footnote 39 - pg 477

    INTENT - to not return
  37. Sommer v. Kridel
    Lease was a term of years for two years; defendant requested L to release him: "ready, willing, and able" prospective T. 
  38. Attorney's Fee's 
    Each party carries own fees :

    UNLESS there is a statute that allows recovery of attorney's fees. 
  39. Where does the burden of proof lie in L/T mitigation issues.
    Minority - Landlord 

    Majority - Tenant 
  40. Consequences of L breaching duty to mitigate?
    1. Can't recover any rent 


    2. difference between agreed rent and losses by mitigating 
  41. Can parties agree to waive mitigation
    Minority - NO
  42. Sources of T Remedies / L Duites - re: condition of leased properties
    Quiet enjoyment & constructive eviction

    covenants in the lease 

    duties imposed by statute 

    implied warranty of habitability
  43. Historical Evolution
    1st - Early Common Law

    2nd - Traditional Common Law

    3rd - Modern Common Law

    4th - Modern Statutes
  44. Early Common Law
    Caveat lessee and independent covenants rule 

    The common law doctrine that stated that it was the tenant’s responsibility to research leased premises before agreeing to a lease and that the landlord was not responsible for the defective condition of the leased premises; this doctrine has been changed in many ways by modern rules.

    Exception - Actual eviction by L breaches covenant of "quiet enjoyment" (express or implied) 
  45. Constructive Eviction
    Breaches quiet enjoyment

    Substantial defect in the premises is treated as an eviction - if T vacates

    defect is a breach 

    remedy if T vacates
  46. What is within scope of the covenant of quiet enjoyment
    1) duties contained in the lease 

    2) duties imposed by statute 

    3) the standard exceptions to caveat lessee
  47. What is Constructive Eviction
    The disturbance, by a landlord, of a tenant's possession of premises that the landlord makes uninhabitable and unsuitable for the purposes for which they were leased, causing the tenant to surrender possession.
  48. Why is the K of sale entered into early in the process?
  49. The K of Sale
    Statute of Frauds
  50. Statute of Frauds 
    Basic requirement  - a signed writing

    Additional minimum requirements; established by judges, vary by Jurisdiction

    Plus exceptions: especially part peformance 
  51. Marketable Title
    is free from reasonable doubt; 

    what a prudent person would be willing to accept

    • An implied condition
    • its definition
    • defects which render title unmarketable 

    An implied condition: What consequence if "condition" not met? 

    A party may rescind.
  52. How do we transfer land with title defects 
    By drafting appropriate contact provisions and deed language 

    Then list the defects that buyer is agreeing to 
  53. Seller opportunity to cure defect
  54. Present vs. Future Convenants 

    When breached
    Only at time deed is delivered OR only thereafter

    How breached - by mere existence of superior title or only by eviction?
  55. Persons Protected Under the Recording Acts 
    pg. 686
    Purchasers    - ALWAYS

    Lessees        -  always (see note)

    Mortgages / Lenders -  always (see note)

    Creditors      - sometimes 

    Donees & devisees - never
  56. The Recording System
    Indexes and search

    The issue : priority Types of recording acts NoticeWhat is recorded
  57. Recording Acts - Notice
    A person having notice cannot be a BFP
  58. 3 types of notice


  59. Actual Notice -
    however acquired -
  60. Constructive Notice
    from recorded documents in the jurisdictions chain of title
  61. Constructive INQUIRY notice
    Charged with knowledge of...

    what would be revealed by visual inspection of premises and inquiry of persons in possession.

    what would be found in unrecorded documents referred to in recorded documents
  62. Documents that are recorded BUT DO NOT  provide notice

    In other words what is recorded but does not constitute notice
    Document with a defective property description so that searcher can't tell if this is the land she's interested in. 

    A document without an acknowledgement but was added to "the library" anyway

    A document with significant errors in the names of the grantee or grantor
  63. Title Insurance
    Insures title as shown by the public record - "good record title" 

    Covers title matters (and access) only

    Insures title only as of the policy's date.
  64. Example of Standard Exclusions
    Losses arising from certain government regulations - zoning, subdivision ordinances, etc. 

    Defects created by the insured. 

    Defects NOT in public records but known to insured and not disclosed to company

    Claims NOT SHOWN by the public records but ascertainable by inspection of the land.

    Encroachments, boundary discrepancies, etc, witch an accurate survey wold disclose 
  65. Schedule B "variable exceptions" are specific to the property
    a specific recorded easement 

    a specific recorded tax lien

    a specific recorded CC&Rs

    a specific recorded deed of trust or mortgage
Card Set:
Property 2
2014-03-28 19:01:02
Finkmoore CWSL Property2

Property 2
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