PA 303 Landlord Tenant LawUnit 2 Seminar

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Unit 1 Review

Last week we discussed the basics of the landlord/tenant relationship.

We discussed the pros and cons of leasing from both the landlord and the tenant perspective.

We also looked at basic terminology associated with the leasehold estate.

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Unit 2

In Unit 2, we are looking in more details at the requirements needed to have a valid and enforceable lease.

We will explore contract principles (as the written lease is a contract) as well as the Statute of Frauds. Finally we study rights and covenants in a lease.

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Crazy Tenants

A landlord had a house for rent and a guy stopped by to look and the first question out of his mouth. “What will my late payment be?”

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The Statute of Frauds

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The Lease

The lease between a landlord and a tenant is a contract.

The landlord (the offeror) is offering to give a tenant (the offeree) possession of the property in exchange for money (rent).

The consideration is the apartment and money.

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The Lease

Since the lease is a contract, all of your regular contract law rules apply.

One such rule relates to having the lease in writing to satisfy the Statute of Frauds.

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The Statute of Frauds

Statutory requirement that certain kinds of contracts must be in writing to be enforceable.

Read more: http://www.answers.com/topic/statute-of-frauds#ixzz1WZdHgFFJ

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The Statute of Frauds

• Every state has statutes requiring that certain contracts be in writing to be enforceable.

• The writing required by the statute need not be in any special form or use any special language.

• The lease would contain the necessary information, like names of the parties, terms and conditions, and signatures.

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Statute of Frauds

1. Contracts to answer to a creditor for the debt of another,

2. contracts made in consideration of marriage,

3. contracts for the sale of real estate or affecting any interest in real estate,

4. contracts not to be performed within one year of their making

5. Agreements by an executor

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Statute of Frauds

The general rule is that if the lease goes over one year or in some way involves the transfer of an interest in the real estate, that must be in writing.

If not, this can be a complete defense to contract formation and one of the parties can get out of the agreement.

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Statute of Frauds

The Statute of Frauds will generally render unenforceable oral agreements conveying interests in real estate.

Most issues center on what is an « interest in real estate » and whether the agreement contemplates transfer of title, ownership, or possession.

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Statute of Frauds

Real property has commonly been held to include land, leaseholds, easements, standing timber, and sometimes conditions and improvements.

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Mulford v. Borg-Warner

In this case (495 N.Y.S.2d 493 (1985), the landlord brought suit to enforce a written but unsigned two-year lease.

The parties drafted a written lease for office space but did not sign it. There were three prior written leases between these two parties.

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Mulford v. Borg-Warner

The landlord claimed that the unexecuted lease was valid and that signed checks were sufficient to satisfy the memoranda requirement of the Statute of Frauds.

The court ruled that there was no leasehold and that only a month-to-month tenancy existed because the Statute of Frauds was not satisfied.

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Statute of Frauds

What is the rationale behind requiring that contracts transferring an interest in real estate and those for longer than one year satisfy the Statute of Frauds?

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Licenses

PA 303 Professor Monique Chiacchia Kaplan University

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License

A license is a temporary grant of authority to do specified things on the land of another.

Hunting and fishing are great examples.

A licence can be oral because it is not an estate in land and, thus, not subject to the Statute of Frauds.

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License

In the context of real property, a license is the revocable right of a person to come onto another person’s land. It is a personal privilege that arises from the consent of the owner of the land and can be revoked by the owner.

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License

A ticket to attend a movie at a theater is an example of a license. Assume that a Broadway theater owner issues a ticket to see a play to Tom.

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License

If Tom is refused entry because he is improperly dressed, he has no right to force his way into the theater. The ticket is only a revocable license, not a conveyance of an interest in property.

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License

In essence, a license grants a person the authority to enter the land of another and perform a specified act or series of acts without obtaining any permanent interest in the land.

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License

When a person with a license exceeds the authority granted and undertakes some action on the property that is not permitted, the property owner can sue that person for trespass.

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License

A Catholic church granted Prince Realty Management, LLC, a three month license to use a three foot strip of its prperty adjacent to the Prince’s property. The license authorized Prince to put up plywood panels to create a temporary fence that would be replaced with a brick fence later.

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License

During the license’s term, Prince installed steel piles and beams on the licensed property. When Prince ignored the church’s demands that these structures be removed, the church sued Prince for trespass.

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License

The court held that because the license allowed only temporary structures and Prince had exceeded its authority by installing steel piles and beams, the church was entitled to damages.Roman Catholic Churce of Our Lady of Sorrows v. Prince Realty, 47 A.D. 3d 909 (2008)

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Rights and Covenants

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Rights and Covenants

The prpperty interest in a landlord/tenant relationship is a leasehold estate.

State and local law often dictate permissible lease terms and establish standards for structures offered for lease.

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Rights and Covenants

For example, a statute or ordinance might prohibit the leasing of a structure that is in a certain physical condition or is not in compliance with local building codes.

Contract law and 21 states have adopted the Uniform Residential Landlord and Tenant Act (URLTA) to govern disputes.

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Rights and Covenants

The rights and duties of landlords and tenants generally pertain to four broad areas of concern: possession, use, maintenance, and rent.We will talk more about the rights of the parties in upcoming weeks.

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Rights and Covenants

The terms of a lease agreement are generally treated as covenants. In the lease, the law often recognizes that certain implicit promises are made.

Although a well-drafted lease will contain terms (express covenants) that cover most eventualities, even if it does not, the law implies certain covenants into all leases.

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Rights and Covenants

Any lease is assumed to contain the following covenants by the landlord.

1. A covenant to allow the tenant quiet enjoyment of the property

2. A covenant not to derogate from grant

3. A covenant that the residential property is fit for habitation at the start of the lease term

4. A covenant to keep the structure and facilities in good repair

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Rights and Covenants

Landlord’s rights include:

1. A covenant by the tenant to pay rent

2. A covenant by the tenant to keep the interior in good repair

3. If the landlord has covenanted to repair, a covenant by the tenant to allow reasonable access for this purpose

4. And that the landlord has a right to reenter if the tenant defaults on the rent

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Quiz Prep

Understand that the lease is a contract. The offeror is the landlord and the offeree is the tenant.

The lease does give the tenant possessory rights but not ownership rights.

Understand what the warranty of habitability is and whether it is express or implied.

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Quiz Prep

Understand that not all leases have to be in writing – just those that are for longer than a year and those that transfer an interest in the real estate.

There are many contracts and warranties that are associated with a lease. Some of these can’t be modified.

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Quiz Prep

The « tenancy » can be either fixed or for an indefinate duration.The lease is one type of a contract – not every contract is a lease, but every lease is a contract.Understand the difference between a lease and a license – they are not the same.

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Quiz Prep

Look at whether a licensee may in turn lease the property to another occupant.

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Any Questions?

PA 303 Professor Monique Chiacchia Kaplan University

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