Property I Professor Donald J. Kochan Class 26. Today’s Readings Landlord/Tenant – Duties, Rights and Remedies Landlord/Tenant – Duties, Rights and Remedies.

Property IProperty IProfessor Donald J. KochanProfessor Donald J. Kochan

Class 26Class 26

Today’s ReadingsToday’s Readings

Landlord/Tenant – Duties, Rights Landlord/Tenant – Duties, Rights and Remediesand Remedies

Pages 482-515Pages 482-515

IntroductionIntroduction Remember that this is a matter of property interests and estates, so be sure Remember that this is a matter of property interests and estates, so be sure

to identify the rights of all parties – even though so much of it sounds in to identify the rights of all parties – even though so much of it sounds in contract, and some sounds in tortcontract, and some sounds in tort

Consider the level of property conveyed and the matters of possession, Consider the level of property conveyed and the matters of possession, retention, and use, etc.retention, and use, etc.

Understand the “moral hazard” problem and how the law attempts to Understand the “moral hazard” problem and how the law attempts to control it – useful analogies are insurance, rental cars, emergency rooms, control it – useful analogies are insurance, rental cars, emergency rooms, etc.etc.

Consider the “incentive to neglect” on the part of tenants and why that Consider the “incentive to neglect” on the part of tenants and why that shapes rulesshapes rules

Consider the Landlord/Tenant relationship as having corresponding Consider the Landlord/Tenant relationship as having corresponding commitments and obligations to certain duties, rights, and remedies commitments and obligations to certain duties, rights, and remedies regarding the premisesregarding the premises

Ask yourself, what sticks were leased? This is a property transfer.Ask yourself, what sticks were leased? This is a property transfer.

Understand “Best Position” AnalysisUnderstand “Best Position” Analysis

EvictionEviction

Note first that a landlord can evict a tenant who Note first that a landlord can evict a tenant who defaults, but you need to: (1) be able to define defaults, but you need to: (1) be able to define

default according to the original agreement; and default according to the original agreement; and (2) identify the procedures that must be followed. (2) identify the procedures that must be followed.

Return to the last class sides for more. Return to the last class sides for more.

See alsoSee also

Orange County Sheriff’s Eviction Information Orange County Sheriff’s Eviction Information Page:Page:

http://www.co.orange.nc.us/sheriff/http://www.co.orange.nc.us/sheriff/communityService/eviction.htmcommunityService/eviction.htm

Quiet Enjoyment Quiet Enjoyment and Constructive Evictionand Constructive Eviction

No wrongful interference with the tenant’s use and No wrongful interference with the tenant’s use and enjoyment – imagine the landlord that drops by every nightenjoyment – imagine the landlord that drops by every night

In general a landlord surrenders his right to possession and In general a landlord surrenders his right to possession and has an obligation to quiet enjoyment of the premises to the has an obligation to quiet enjoyment of the premises to the tenant so long as the tenant is operating under the terms of tenant so long as the tenant is operating under the terms of the original agreementthe original agreement

There is an implied guarantee/warranty of quiet enjoyment There is an implied guarantee/warranty of quiet enjoyment in most leases – think about ways of drafting to either in most leases – think about ways of drafting to either strengthen or weaken this protectionstrengthen or weaken this protection

Think about what constitutes a landlord breach; also what Think about what constitutes a landlord breach; also what constitutes a constructive eviction versus an actual oneconstitutes a constructive eviction versus an actual one

Think about what constitutes a tenant surrenderThink about what constitutes a tenant surrender

Reste Realty Corp. v. CooperReste Realty Corp. v. Cooper Driveway/Basement/Flooding caseDriveway/Basement/Flooding case

Suit for recovery of rentSuit for recovery of rent

Abandonment before terminationAbandonment before termination

Focus on timing/knowledge at time of lease/change in circumstancesFocus on timing/knowledge at time of lease/change in circumstances

Was there a wrongful act or omission on the part of lessor that relieved Was there a wrongful act or omission on the part of lessor that relieved lessee of lease obligation – i.e. was there constructive eviction? And, if lessee of lease obligation – i.e. was there constructive eviction? And, if so, when and how might the lessor waive his rights? Did the lessee so, when and how might the lessor waive his rights? Did the lessee waive his rights?waive his rights?

See definitions of constructive eviction, including “suitability for the See definitions of constructive eviction, including “suitability for the purpose for which [the premise] are leased”purpose for which [the premise] are leased”

Notice the discussion of express covenants versus impliedNotice the discussion of express covenants versus implied

Duty to vacate?Duty to vacate?

Illegality and Frustration of PurposeIllegality and Frustration of Purpose

Tenant defense for nonpayment of rent or against Tenant defense for nonpayment of rent or against evictioneviction

Illegal condition, in violation of statute or code, Illegal condition, in violation of statute or code, generally voids the enforceability of a leasegenerally voids the enforceability of a lease

Violations that arise ex post – after the lease – do not Violations that arise ex post – after the lease – do not fall under the doctrinefall under the doctrine

Violations must be substantialViolations must be substantial Landlord must have actual or constructive knowledge Landlord must have actual or constructive knowledge

at the time of the lease to be subject to the defenseat the time of the lease to be subject to the defense A tenant under an illegal lease is treated as a tenant A tenant under an illegal lease is treated as a tenant

at sufferanceat sufferance What happens when the law changes and frustrates What happens when the law changes and frustrates

the particular purpose?the particular purpose? Less profits do not relieve tenant obligationsLess profits do not relieve tenant obligations

Warranty of Fitness or Suitability for Warranty of Fitness or Suitability for a Particular Purposea Particular Purpose

Traditionally not implied at common lawTraditionally not implied at common law

May be bargained for explicitlyMay be bargained for explicitly

Some modern movement to recognize itSome modern movement to recognize it

Generally at common law no landlord Generally at common law no landlord duty to repairduty to repair

Tenant’s Duty to Repair or Maintain Tenant’s Duty to Repair or Maintain the Premisesthe Premises

Tenant usually responsible for permissive Tenant usually responsible for permissive or voluntary wasteor voluntary waste

Obligation then to make repairsObligation then to make repairs Terms of the lease matterTerms of the lease matter Leased property can have as a default Leased property can have as a default

reasonable wear, but generally the reasonable wear, but generally the property must be returned in the same property must be returned in the same condition receivedcondition received

See slide on Security Deposits from last See slide on Security Deposits from last class class

Implied Warranty Implied Warranty of Habitabilityof Habitability

The ShackThe Shack

Unsafe, UnsanitaryUnsafe, Unsanitaryor Unfit Standardor Unfit Standard

Defense for TenantsDefense for Tenants

Notice issues re time of lease alter the equitiesNotice issues re time of lease alter the equities

Exculpatory clauses and the varying enforceability of the sameExculpatory clauses and the varying enforceability of the same

Vacating premises not always necessary to assert the defenseVacating premises not always necessary to assert the defense

Remedies and Responsibilities of each partyRemedies and Responsibilities of each party

Public policies behind the rules are influence by a preference for residents who Public policies behind the rules are influence by a preference for residents who presumptively have less powerpresumptively have less power

Hilder v. St. PeterHilder v. St. Peter Implied Warranty of HabitabilityImplied Warranty of Habitability ““State of disrepair”State of disrepair” Discounting rental valueDiscounting rental value Separation of obligation to pay rent from delivery of possessionSeparation of obligation to pay rent from delivery of possession Caveat lesseeCaveat lessee Legal “Evolution” in treatment of the L/T relationshipLegal “Evolution” in treatment of the L/T relationship Importance of code violations; BUT they are a FLOORImportance of code violations; BUT they are a FLOOR Remedies: Rescission, Reformation, and/or Damages – what are Remedies: Rescission, Reformation, and/or Damages – what are

these and how are they different?these and how are they different? Withholding rentWithholding rent How do you value discomfort and annoyance?How do you value discomfort and annoyance? Tenant options when premises are uninhabitable?Tenant options when premises are uninhabitable? Primarily a remedies case, but does well to explain habitability Primarily a remedies case, but does well to explain habitability

issuesissues The case and notes following again underscore the commingling of The case and notes following again underscore the commingling of

contract law with property lawcontract law with property law

Retaliatory EvictionRetaliatory Eviction Landlord’s Power to Terminate is primary issueLandlord’s Power to Terminate is primary issue Proper Notice was enough at common law, but Proper Notice was enough at common law, but

modern doctrine in most jurisdictions prohibits modern doctrine in most jurisdictions prohibits retaliatory eviction (i.e. allows an investigation retaliatory eviction (i.e. allows an investigation into motives)into motives)

Rules developed in part because of disparity in Rules developed in part because of disparity in powerpower

Tenant usually bears the burden of proof and Tenant usually bears the burden of proof and statute of limitations apply (as does laches)statute of limitations apply (as does laches)

Good cause/Reasonableness issues dominate in Good cause/Reasonableness issues dominate in the factual inquiry as to whether the eviction or the factual inquiry as to whether the eviction or non-renewal are legalnon-renewal are legal

Landlord’s Tort LiabilityLandlord’s Tort Liability

Tenant InjuriesTenant Injuries Third Party InjuriesThird Party Injuries Generally a negligence theory at Generally a negligence theory at

common law and still but common law and still but “professional” landlords held to higher “professional” landlords held to higher standards given the power differentialstandards given the power differential

Human values tip the scalesHuman values tip the scales Consider exculpatory agreements and Consider exculpatory agreements and

their enforceabilitytheir enforceability

Tales from DCTales from DC

Assignments, Subleases, Vacancy, Assignments, Subleases, Vacancy, Abandonment and Continued Abandonment and Continued

Individual Responsibilities Under a Individual Responsibilities Under a Lease as a formal legal obligation Lease as a formal legal obligation

even past occupancy if the legal term even past occupancy if the legal term still runsstill runs

Tales from The CottageTales from The Cottage

MiceMice

Habitation ResponsibilityHabitation Responsibility

Abandonment?Abandonment?

Read your leaseRead your lease

Tales from HoustonTales from Houston(Part 1)(Part 1)

While renting this house, feral cats were everywhere.While renting this house, feral cats were everywhere. What were my responsibilities as a tenant?What were my responsibilities as a tenant? What were the landlord’s responsibilities?What were the landlord’s responsibilities?

What were the owner’s responsibilities (I was subleasing)?What were the owner’s responsibilities (I was subleasing)?

Of Mice and Cats: Of Mice and Cats: Just for Fun from Houston (Part 2)Just for Fun from Houston (Part 2)

A blog post from a former student:A blog post from a former student:

““Kochan Isn’t Crazy. Kochan Isn’t Crazy. At least not about the cats in Houston. At least not about the cats in Houston.

As our visiting As our visiting Property Prof. Donald Kochan Property Prof. Donald Kochan

has noted several times in class, has noted several times in class, cats have overrun cats have overrun

certain neighborhoods certain neighborhoods and thumb their furry noses and thumb their furry noses

at our right to exclude. at our right to exclude. This grey one is a frequent trespasser. This grey one is a frequent trespasser.

I really don’t care if he I really don’t care if he adversely possesses the alley, adversely possesses the alley, but I draw the line at the car.”but I draw the line at the car.”

http://www.lukegilman.com/blawg/2007/06/12/kochan-isnt-crazy/http://www.lukegilman.com/blawg/2007/06/12/kochan-isnt-crazy/

(maybe the cats would have served some utility at The Cottage)(maybe the cats would have served some utility at The Cottage)

For further reading on Feral Cats in Houston, see this November 6, 2008 news For further reading on Feral Cats in Houston, see this November 6, 2008 news story:story:

http://www.click2houston.com/news/17915710/detail.htmlhttp://www.click2houston.com/news/17915710/detail.html

Looking After the Commons Looking After the Commons Tales fromTales fromCaliforniaCalifornia

Gated Communities and Gated Communities and Homeowners Associations – Homeowners Associations – they create a type of concurrent they create a type of concurrent Ownership/rights/liabilitiesOwnership/rights/liabilities Landlord & Tenant in such Landlord & Tenant in such communitiescommunities

-- Who has the rights?-- Who has the rights? Commons Issues RevisitedCommons Issues Revisited

Concluding ThoughtsConcluding Thoughts

Landlord/Tenant relationships help to Landlord/Tenant relationships help to facilitate much of the possessory facilitate much of the possessory

components of the market for components of the market for property. Always consider what property. Always consider what

sticks are given away and what are sticks are given away and what are retainedretained