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Chapter 1 – Acquisition of Property by First Possession Types of property
- Personal = moveable [phone, car, etc]
- Real = immovable [land and structures attached to land] = short answer on essay for sure Property law - Relationships among human beings in connection w/ property: defines rights, duties, privileges and immunities in relation to property - Common law : specific precedent general rules / norms - Common law COA : replevin [want property back], trover [sue for value of it], trespass [direct injury as a result of prop use], trespass on the case [indirect injury as a result of prop use], ejectment [get rid of trespassers on ur land illegally] Property owners A) Private property = u or corporations = OUR COURSE [ ENGENDERS LEGAL RIGHTS, PRIVILEGES AND IMMUNITIES] B) State owned property where immune from challenges on how to handle prop C) Briefly, commons property = everyone collectively owns it together so cannot appropriate it [ village square, high seas and deep seabed, outer space, upper atmosphere] - externalities are introduced when there is scarcity because limited resources are used more. Externalities = when those in engaged in commons behavior will impose costs on others not associated with the act taken in commons by a party w/o tragedy of the commons , externalities not an issue: no externalities bc abundance of resources for all and not depletable purpose of private property rights is to maximize value of scarce resources [& thus enhance social welfare] “internalizing the externalities” by bringing the costs of resources to bear on the user. 2 ways property rights to this: (1) concentrate C/B on owners and greater incentive to use more efficiently (2) reduce costs of negotiating w/ others over remaining externalities EXTERNALITIES AND RULE OF CAPTURE: if in a common w/ scarce resources, and rule of capture applies [pierson], externalities exist because when 1 engages in a transaction in commons, get 10/10 fish at cost of 1/10 and everyone else in common loses 1/10 interest that they’ll never get back race to the bottom [ leads to extinction] When scarce, however, every incentive to exploit……. = scarce interest tht cant be replaced [but community’s best interest is not this, instead that it be managed sustainably] [Vs. if resources are abundant, externalities [costs] don’t matter and communal ownership is appropriate. ] = rule of capture applies so whoever gets them first gets it
To overcome this when scarce agreement. HOWEVER, 1) enforcement problems [ even if # users low, if transaction costs are sufficiently high because of time/diff interests/etc. then external effects of using resources likely ignored and resources misued = COLLECTIVE OR NONEXCLUSIVE EFFECTS STILL HAPPEN] , free riders [ one person ignores deal and free rides] and 2) holdouts [ one person doesn’t bargain cuz wanan wait for a better deal so tht also increases transaction costs] So if transaction costs are too high to make an agreement, to avoid race to bottom/externalities… privatization !!!!!! [convery commons to prop by giving everyone a slice of ownership ] o This reduces incentives to race to bottom and fish more bc now bearing full cost of own activities = internalizes the externality o 1) recognize scarcity and set a limit 2) allocate resources to extent of limit 3) so that its most efficient [ can make $ off of surplus if don’t race by selling slice to other, LESS EFFICIENT OWNERS OF THE SLICE] MIX OF A AND C: but if unowned property like oil in the ground, gas, fish and other ferea naturale = can be subject to appropriation [ pierson w/ fox, geeble w/ ducks, ghen w/ whales] and
- LIKE A [private]: NO EXTERNALITIES - LIKE C, more [commons]: no one can ascertain the property until its captured subject to rule of capture / first possession !!!!!!!!!!!!!!!!!!!! o Oil and gas – capture it, urs. Can withdraw w/o regard to neighbors until escapes/resorted back to natural state [reinjected into land] then commons again o Water – American rule of reasonable use in all but 3 states: rule of capture but if actually harm neighbors, considered unreasonable / unlawful Eastern states: riparian rights = landowners along a water source have a right to use water subject to rights of another riparian’s Western states: purely rule of capture = prior appropriation aka person who captures, appropriates, and puts to reas/beneficial use has a right superior to later appropriators 3 THEORIES FOR RULE OF CAPTURE IN A QUESTION ON THE EXAM: - Reward the labor theory = ones labor should be rewarded – Post lost under this // Ghen won - General societal welfare theory = how to fashion rules to best deal w/ society [climate issues, keeping foxes alive but not dispositive] - Efficiency theory = fashion rules in a way to maximize wealth/utility and efficient relationships 2 prop [no shortages, surpluses, and reward efficient conduct] – pierson wins
- Must possess property [exercise an act of sufficient control]
- Relative rights between finders and subsequent possessors = status of true owner matters: o If true owner sells, gifts or abandons it relinquish all property rights and rule of capture applies [now unowned] If abandons remains w/ property owner over finders bc owner of private premises notion arises : i.e. I own everything attached to prop and since we don’t care ab true owner, not gonna give it to finder o If true owner loses finder entitled, even if in a private home!!!! [encourages finding bc owner has no idea where it is and disclosing finding to get to true owner]: Armory and Hannah Place of finding is less relevant Exception: rationale soli when property in Q is attached or under property [in pool or soil, even if owner doesn’t know there] goes to owner of house o If true owner mislays [intentionally placed and forgot to pick it up] finder not always entitled. If public place, owner of store gets it. If private property, put it in the hands of person who will be in best position to get it to true owner = KEEP IT IN PLACE MISLAID. Medina Armory v Delamirie: finder wins / lost
- First finder has superior property rights against the whole world but true owner and any prior possessors. CAN SUE SUBSEQUENT POSSESSORS IN TROVER o [chimney sweeper takes ring to goldsmith. Goldsmith takes it even tho sweeper wasn’t true owner , sweeper gets equivalent of damages (highest poss price of stone – to encourage GS to give it back to chimney dude or divulge location of it for true owner purposes, but he doesn’t) bc prior possessors rights superior.// If true owner comes back to goldsmith, goldsmith must pay again but then GS can sue sweeper] o Even if finder is a trespasser, can still sue subsequent possessors in replevin : Anderson v Gouldberg shows tht theyre both wrongdoers, so even if wrongfully possess something in trespass can maintain replevin against someone who deprived him of it w/ less superior title Hannah v Peel: finder wins / say lost but in a private home …
- Finder of lost property in a house: goes to finder when owner was never in physical possession of house nor was owner in physical possession of brooch [so not prior possessor]
- Finds brooch on top of window frame, in a crevice, covered with dirt and cobewebs
- How peel clda won: mislaid property (A) or rationale soli because attached (B) or abandoned (C) or mislaid
- rationale soli (D), or unfair cuz of equity € or peel unable to get it to gvt (F) McAvoy v Medina: finder loses / mislaid so goes to owner
- Finder doesn’t get mislaid property in public store. Store owner gets it.
- Why? No right to property when true owner voluntarily places and involuntarily leaves it. Shopkeeper more likely to get it to TO so they have superior property rights NOTE CASES: Bridges v Hawsworth: finder wins / lost
- it doesn’t matter where u find lost property // if in public shop and lost purse, armory rule applies South Stafforshire Water Co v Sharman: finder is an employee of owner, loses, on 2 issues / lost prop on owners premises = (1) R.S. and (2) agent of owner
- agent of owner/employee who finds ring in owner’s pool owner gets it bc an act attributable to the owner
- also, attached or under property = rationae soli lets owner win too Elwess v Briggs : finder loses bc attached to owners prop
- rationale soli: if attached to prop or under land , even if in soil and owner had no clue it was there Alternatives to property rights among sequential possessors and finders rights: **Bailments:
- Bailment = lawful possession of goods of another
- To be a bailee: 1) physical control of property
- intent to exercise control -** valets, coat check ppl, maybe not airports if never had car key
- consequences of being a bailee:
- Strictly liable for misdelivery
- Bailee must exercise ordinary reasonable care in light of circs
- If lost/destroyed/etc. depends if u are reasonable - Bailee can protect self through exculpatory clauses [“ I am not a bailee”/ don’t exercise any physical control over ur property while in our control”] BUT, don’t work when bailee has an advantage, bailor has little-no bargaining power and subject to policy reasons of businesses [do we want to encourage or discourage this: does letting parking lot exist have subs meaning, enough to let them avoid being a bailee or else stop offering it?]
C. ADVERSE POSESSION
AP = transfer of title from a landowner to another possessor
- Why?: 1) efficiency theory: society benefits most from private property being used productively
- property ownership is never absolute, always limited 3 ) quieting [putting a rest to controversies] title: s urveying issues. Quieting allows possessors to use land productively by telling u who is owner among competitors At the moment all 5 requirements met window of opportunity goes up for true owner’s ability to eject over next 10 yrs/SOL // clock ticks (pre-1) time needed in possession // window of opportunity LENGTH:
- Addressed by statute: 10 yrs in New York - Disabilities [<18, mental, in jail] matter if true owner ONLY. o Every state extends SOL if disability is present at the time the COA accrued – aka at the time the clock starts ticking/window opens/ all 5 elements met. ONLY FIRST DISABILITY OF TRUE OWNER AT TIME ALL 5 MET. o Heirs can only use owners disability when disability is removed by death
o Minor encroachment rule [Mannillo v /gorski]: even if not hidden, if a minor encroachment along a common boundary creates a presumption of notice/ knowledge only if true owner ha actual knowledge (A) or if t.o. had reason to inquire/enough knowledge to inquire (B) = even though sidewalk built / stairs, not open and notorious o Major, unintentional encroachment rule [hostile]: Amkco: 1) P suffered irreparable harm if removal denied and 2) hardship to P if denied > hardship to D if granted…. If hardship to D is greater, D gets title or an easement in land and pays… if hardship to P is greater, remove D (4) hostile possession [claim of right] = mannillo and walling
- A. Objective test [Connecticuit Doctrine]: doesn’t matter if AP thought encroaching. Conduct shows operating under a claim of right bc using it as a reasonable owner of 15 inches wld
- B. good faith intent test [ NJ] if think its ur own, operating under a claim of right and satisfy this [usually works for minor encroachments]
- C. bad faith intent test [ NJ / “Maine Doctrine”] if intend to establish a claim to this property w/ a premeditated intent to claim it as own via AP , satisfy this [usually wnt work for minor encroahcments]
- Claiming as an independent matter of right to be there. Not taken w/ true owners permission, instead taken thinking ur allowed to be there and don’t think the true owner has rights [not subletter, tenant, kid in parents house, and not trespassers/ squattors] o Don’t need to have actual knowledge that another person is title owner [Wailing v Przvbvlo] o And NOT DEFEATED by knowledge that another holds legal title [ claim of right = adverse to title owner and opposition of rights to true owner] o Conduct prevails over knowledge
- Test: majority objective. Don’t care what AP thinks. Care about whether someone from outside wld say AP treated land as their own/as true owner wld o Conduct shows using it as t.o. and 3P wld say yes. Matters if acting lk owner o Minority good faith intent test [in good faith mistakenly believe owns property] or bad faith intent test [ not innocent, but intentionally there to take title: rewards bad behavior] …. Only way trespassor cld get it
- Color of title helps [defective deed = quickclaim deed/will: claim on written instrument is defective and invalid.... enhances notion of a claim of right] o Allows u to tack on other AP’s time bc also establishes privity o Some jurisdictions shorten SOL o Constructive possession: actual possession of only part of land covered by color of title gives u constructive possession of all tht the writing describes, even if just possess part o Say not only is there factual evidence [behaving as if I have a claim of right], but also color of title which is an instrument tht purports to give me title and enhances my ability to meet hostility requirement.
(5) continuous possession : must have first 4 elements, continuously, for entire statutory period = howard v kunto o Don’t need to literally be there every second of day, depends on how true owner wld use it [nature, location, character land] o If subsequent possessor forces u off for a few months, then u come back after taking steps to re-enter: can prob get AP for normal 10 yrs + months gone o Mistaken improvers / big encroachments before SOL runs: eases plight by forcing a conveyance at market calue of land from owner to improver (A) or give landowner option to buy improvement (B) o If substantial [10% land] 2-part test: [Amkco v Wellborn]
- P shows suffered irreparable harm if removal denied [removal if intentional]
- even if irreparable harm, relief cld be denied/encroaching party gets title or payment if balancing test shows hardship to P if removed < hardship to D if granted o And Anderson v Fautin = didn’t pay prop taxes as required by statute but long acquiescence
D. ACQUISITION BY GIFT: w/o condition or consideration of any kind
**. A gift is a present, gratitutious unconditional transfer made from one person to another without payment/consid of any kind.
- intent** of donor to make a PRESENT, UNCONDITIONAL gift [donative intent] ******** 2) delivery to donee wrench of delivery = separation of donor from property [from dominion/control: essence of delivery] // separate access to it with urself and bestow person gifting it w/ access to obtain property = best evidence of intent a) Actual = best AND WILL ALWAYS WORK, less intent showing needed AND INTENT CAN BE FORMED AFTER WRENCH OF DELIVERY b) Constructive = deliver means [Adam v Hayes = c) Symbolic [boat too big, for ex] = model, pic, etc.
- IF INTENT AFTER [actual] DELIVERY, OK!
- REVOCABLE UNTIL CHECK IS CASHED 3) acceptance = presumed. o Modern trend [common law wld say] emphasizing intent because purpose of gift law is intent. If intent is clear, delivery found if circs show “delivery” made is reasonable [Gruen v Gruen] o Delivery must be what is necessary to consummate gift must be as perfect as the nature of the property and the circs and surroundings of the parties will reasonably permit o As to two (2), it didn’t have to do with the size and weight of the painting, but with the “nature “ of the gift. This was a gift of an non-possessory vested remainder in fee simple to the painting to the son/Donee. The father/Donor kept a present possessory life estate in the painting. So if delivery had been required, the son would have had to drive to Manhattan from Cambridge, take the painting from his father and then immediately hand it back to the father (who had the present possessory interest for his life. The son then would drive back to Cambridge. This, the court said was unnecessary here where donative intent shown by the
Steenberg trespass on land is pretty absolute [strict liability, whether or not intentional or harm to land… even tho trespass elements are 1) entry 2) intentional 3) w/o permission 4) harm to land]
- law has an interest in punishing intentional trespass in private property, preserving integrity of legal sys/landowner rights and society shld discourage self help
- here, even tho only way for steenberg to deliver his goods was through Ps land, and no harm to the land, liable for trespass
- trespass even tho 4th^ element not met... Shack 4 th^ element not met in trespass = no trespass. Why? Because of the SCOPE OF THE TRESPASS: doctor/lawyer to help migrant workers, as per congressional statute [unfettered access to carry out cong intent/ enforce congressional intent] - also health and lawyering rights = vital to peoples rights, even tho reasonable access avail in other ways [go to owners office w/ owner, meet them off owners land] c) real property limits: gvt can reach in and restrict what u do on ur land [zoning laws, and above on trespass] or take land [eminent domain], cant violate tort/environmental laws if what u do harms neighbors, and certain lands have public access like legislation
- why?????? MARKETS DON’T OPERATE SMOOTHLY IN SHORT TERM, shld be limited so NO HARMFUL SOCIETAL EFFECTS in short term, also immoral [demand/supply is how it operates, not fairness], also brittle [can break and when do, human consequences]
LAW OF INTELLECTUAL PROPERTY:
- Fruits of labor theory going to grant exclusive monopoly rights to
patents/trademarks/copyright/IP.. .NONRIVALROUS AND NONEXCLUDABLE, LABOR.. .for as long as necessary to incentivize creation and innovation
- First person who creates it , gets to exploit it alone
o Give a nice reward/profit [exclusive rights] but not so long so free market
creativity is deterred / so that exorbitantly high prices and able to sell property at lowest qualities for tht long
o Not fashion designs NOT IMITATION
o Yes news , as btwn news gatherers before first publication: Inc v Associated
Press: INC prohibited from bribing AP news subscribers to give them info right before published because news is quasi property.. .[“legal fiction” like Ghen, since AP never actually possessed news, treated as actual first possession] Nature of news industry [like Ghen] custom tht first publication = profits and fundamental to get free info , if not protected, no one will invest time in it = GOOD FOR PUBLIC !!! Interference w/ normal operation of trade at exact point profitable [like Keeble] took so much time, skill to gather and cost prohibitive if not able to profit from it
CHAPTERS 4, 5 AND 6: BASICS ON SYSTEM OF ESTATES, BC ONLY NEED
TO KNOW 25 TRANSACTIONS :
- Describe parties interests
- 4/5 of them def on it
CHAPTER 6:
1) tenants in common = presumed, heirs get , just need unity of possession [ even presumed for husband and wives / transaction 23 = engaged] 2) joint tenants = need all 4 unities: [easy to destroy so heirs get – just transfer] // rights of survivorship so heirs don’t get Germaine v Delaine: “jointly, as tenants in common” with rights of survivorship = joint tenanct because provided for survivorship Vs. Kipp v Chips estate: “to c and k, as joint tenants, their heirs and assigns forever” in granting clause of deed but in section describing type of title granted [habendum clause], referred to as “tenants in common, their heirs and assigns forever”
- said tenants in common [no ROS language]
- usually granting clause language given priority over habendum clause, but if former is ambiguous 3) tenancy by entirety = need all 4 unities + marriage // rights of survivorship to surviving spouse
- Biggest thing: can a creditor use land held concurrently between spouse to hold a debtor to his debts? DEPENDS ON JURISDICTION: o NY group of states treat wife like husband to achieve equality, i.e. creditor can use land to satisfy debts of both
- wife has an undivided interest in the whole and has the right to transfer/alienate her possession rights just as her husband can since can transfer, creditors can go after her property here
- creditors like group 2 states: can go after property indiv by wife, prop not in TBE by wife, and HER UNDIVIDED RIGHT TO POSSESS PROPERTY AS A TBE o Sawada case = Hawaii group of states treat husband like wife at common law to achieve equality, i.e. creditor cannot use land to satisfy debts of either
- achieve equality in opposite way as group 2 states: make husband in same legal position as common law wife was [[so neither can alienate/transfer and thus creditors cannot go after TBE property// cannot use property held as TBE to go after debts]]
- creditors hate these states. TBE property is shielded from creditors
- 2 consequences: 1) H/W same rights and 2) neither can unilaterally transfer their TBE property so creditors cant go after TBE property period o creditor of 1 spouse cannot reach TBE because 1 spouse cannot assign his/her interest [exemption from creditors = main reasons for TBE survival]
“ 10 years after construction completed” yes,
this is it because we know exactly when this lease
will end / the end is certain.
PAGE 462 PROBLEMS: 1)”to T for one year beginning October 1” = no notice is ok because its an estate for years
- If instead, it said “from year to year beginning October 1” = can sue for breach if no notice 6 months in advance.
b. Periodic tenancy = transactions
“Year to year” term or “month to month”: lasts 4 certain fixed period/fixed term but can be automatically renewed for another fixed period unless tenant gives notice terminate Notice required = one full period ahead Month = 30 days [if notice in middle of period, need to stay an extra period/ will be charged for breach if not. So if nov 16th^ for lease ending on nov 30 th, need to stay til dec 31st^ / pay til then] Need to stay till end of next month. If u give notice in middle of month NEED TO GIVE NOTICE ONE FULL PERIOD AHEAD BECAUSE NOTICE (in mid of month) DOESN’T BECOME EFFECTIVE UNTIL END OF NEXT PERIOD Year is exception = max amt of notice can require is 6 months. So if year or more, than 6 months notice needed [and it adds on so if u give 5 months notice, only need 2 stay ectra month not extra year] o Terminates final day of period not middle of tenancy: thus, if begin tenancy on jan 1, terminate on march 20, earliest termination date = April 30
c. Tenancy at will = transactions
No fixed duration / no partic 1) end date [term of years] or
- fixed period [periodic] Can be terminated at will at any time WITHOUT NEED TO NOTIFY No conditions on how they will terminate If landlord or tenant dies, obvi over Ex: u can stay at my place for the time being [similar problem in garner v gerrish] At common law no notice ever needed to terminate… but now, mostly by statute, jurisdictions will impose on a tenancy at will some sort of notice requirement like 30 days but if no statute then no notice needed
PAGE 462 PROBLEMS: 1b [TRICKY ONEs] = for no fixed term “at an annual rental of 24k payabke 2k per month on the first of each month” Answer = tenancy at will because no fixed term [not periodic] and no certain end period [not term] so tenancy at will and landlord has no basis to complain ////// To try to get landlord to win $: say its periodic tenancy bc “annual” and “yearly sum” so notice is 6 months or a monthly periodic tenancy because of “payable on the first of each month” and “per month” where notice is 30 days
- month-to-month tenant, T, notifies nov 16 2012 leaving nov 30 2012. Landlord after reas efforts, relet on April 1 2013. If no statute on terminating month to month , what happens??????????? so ask what is the length of the period for which notice must equal? One month? If so, need to notify one month in advance. Here, tht would mean T needs to notify on October 30 to leave on nov
Since notified on nov 16, prob required to pay thru dec 16 AND BREACH IF LEAVE BEFORE DEC 31 [end of next full period. If give notice in middle of this period/ not beginning, need to stay for that period + ENTIRE NEXT PERIOD]. So T prob required to pay dec 2012 rent but not jan-march 2013 rent. - NOTICE DOESN’T BECOME EFFECTIVE UNTIL END OF NEXT FULL PERIOD - SO LANDLORD CAN ONLY SUE FOR THAT MONTH Garner v. Gerrish: looks like and smells like a tenancy at will or even a month-to-month but court says it’s a life estate determinable - No one doubts it’s a lease. Lower ct finds it’s a month-to-month periodic tenancy bc indefinite terms with no termination date. - But highest court says life estate determinable because the lease terms: “for and during the term of quiet enjoyment from the first day of may 1977 which term will end- gerrish has privilege of termination this agreement at a date of his own choice”… SHOW THAT THE RIGHT TO TERMINATE AT THE DATE OF TENANTS CHOICE CREATES A DETERMINABLE LIFE TENANCY ON BEHALF OF TENANT….. Why? - grants personal right for lessee to terminate at a date of his choice which is a fairly typical means of creating a life tenancy terminable at the will of the tenant thus the lease will terminate, at the latest, upon death of lessee - Fact that can be terminated at some earlier point if tenant decides to leave doesn’t render it indeterminate - Leases providing for termination upon the occurrence of [some event/occurrence] and here, tenants will, prior to completion of an otherwise fixed term is routinely enforceable even when event in control of tenant - REJECT common law rule that right to terminate at will for one = right to terminate at will for the other. [ bc that was because it wanted seisin = which is archaic today and no longer reason to force law to adhere to these technicalities] Since language was ambiguous as to whether there was a fixed term/whatevs…. Looked at parties’ INTENTIONS AND WHAT PARTIES DID IN CONTRACT to figure out what kinda tenancy it was: - Liked tenancy at will bc gave tenant right to terminate whenever …[& not periodic because then garner wlda had to give 30 days notice to terminate ]] - THEN talked ab how seisin was an archaic concept used to criticize life estates
**- No sales taxes [rent]
- Notice requirements** o IN GENERAL, NOTICE IS DETERMINED BY LEASE. BUT BY STATUTE 99% OF THE TIME, LANDLORD MUST GIVE TENANT 30 DAYS NOTICE OR TENANT MUST GIVE A MIN OF 30 DAYS… EVEN IF IT DOESNT PROVIDE SO IN LEASE [THIS IS TATUTE, NOT COMMON LAW] AND MAX NEEDED IS 6 MONTHS
- Was it for free? If yes, indicates not a lease.
- SOF requires leases >1 yr in writing, not licenses o [but if initial period doesn’t violate SOF, rest wont: aka month to month periodic, doesn’t need to be in writing even if lasts 5 yrs] o And just needs to be in writing, terms, premises described adequ, length of lease indicated and signature of tenant [bc landlord usually offers terms so only tenant needs to show intentions]
- Remedies diff: L-T may be able to get equitable remedies [estoppel, injunction, specific performance, etc.] vs. licenses cant [ if lawyer: first Q is ask what they want: to be able to boot w/ 30 days notice? To live forever without worrying ab termination? Open ended and can walk away forever? To have duties to keep property at same value conveyed? ]// do u want equitable remedies too? 2 nd^ Q is to make clear in the lease which estate/tenancy ur client actually wants. And then step 2 ** leases set the (A) estate [one of 3 non free holds]. (b) the terms and conditions of the lease [amt to be paid, length of tenancy and the site/location premises to be leased] and. (c) when it’s a lease, courts breath in certain implied conditions: IMPLIED WARRANTY OF HABITABILITY , or a notice requirement if it’s a periodic tenancy WHY DOES IT MATTER? Bc a lease gives rise to landlord-tenant relationship which carries w/ it certain incidents: rights, duties, liabilities and remedies—tht don’t attach to other relationships [incidents are the chief concern of the rest of chapter]
- Remedies diff, obvi too **Form leases and question of bargaining power [fill in da blanks]
- Majorly, residential. But better for commercial because gets rid of the monopoly issue: o** Typically, landlords use form leases [standardized docs offered to all tenants on a take it or leave it basis, no negotiation]… But competition may force sellers to incorporate in their std contracts terms that protect tenants o Under a monopoly, buyer has no good alternatives so seller can insist on terms tht in a competitive market wld be bettered by another seller = THUS, UNDERLYING PROBLEM IS NOT FORM LEASES, BUT MONOPOLY POWER: created, for ex, by a shortage of housing so tenants stuck with form lease on a take it or leave it o Courts can police on case-by-case basis, but ineffective…. Sometimes call for statutory reform: legislation requiring full disclosure of landlord and tenant
duties rights and remedies [more far-reaching approach wld statutory leases setting out prescribed terms and conditions] don’t bc there are specific circs that they [tenant/landlord] will want in each lease. And even if already object of form leases [already in em], wld take legal work away from lawyers Prob before this: ok have a lease. What type of non-freehold estate was conveyed by it?? Step 2 : Ok, assume u have a lease. NOW ASK IF CONTRACT OR PROPERTY LAW GOVERNS [ lease is a contract but establishes an estate in land relationship]? o Prop law = lease-as-conveyance because it transfers possessory interest in land Better for landlords because all obligations are independent of one another o Contract law = lease is also an agreement/contract because usually contains a # of promises Better for tenants because dependent / mutuality of obligations does a material breach by one allow mutual excuse of further performance on other side? CONTRACT LAW WLD SAY YES. SO IF LANDLORD DOESN’T DO X, U DON’T STILL HAVE TO PAY// if premises is destroyed, still liable… [vs prop law wld make u pay no matter what bc it treats promises as independent] other common Qs: If tenant wrongfully abandons, must landlord take steps to mitigate damages by looking for a new tenant? Is warranty of quality of premises to be implied in leases? Both apply, however, because it’s a contract [lease] but establishes an estate in land relationship!!!! : Lease bc transfers L-T a right to possess an estate of land and this is a possessory interest in a non-freehold estate = property arrangement bc an estate of land is created. But theres an agreement [w/ consideration, etc.]= so its also a contractual agreement o Which the court will emphasize and apply is the iiiisssssue And implied conditions “breathed into it” will be different SELECTION OF TENANTS
- Cant unlawfully discriminate: biggest constraint is fair housing act, 42 USCA §§3601- 3619, 3631: nothing shall apply to any single family household sold or rented by owner IF private indiv owner doesn’t own more than 3 at any one time and excepted without the use in any manner of sales or rental facilities or sales or rental services of any real estate broker, agent or salesman or of such facilities or services of any person in the business of selling or renting dwellings…… - Ny legislature: BANS ON BASIS OF RACE, CREED, OCOLOR, NATIONAL ORIGIN, GENDER, SEX ORITENTATION, DISABILITYT OR MARITAL STATUS [so can discriminate against lawyers, for example….. BUT NY CHANGED ITS LAW SO CANT after 1968] **SUBLEASES AND ASSIGNMENTS: FAVORED
- Property law default = unless lease specifically prohibits it , TENANT MAY ASSIGN OR SUBLEASE THEIR STRING OF TIME/NONFREEHOLD POSSESSORY INTEREST TO A 3RD PARTY**
T1 / assignee duties = right to estate, which includes property right covenant to pay [and all other covenants that run w/ the land when u possess it] BUT, MONEY Q , ANSWER = LANDLORD CAN COLLECT UNPAID RENT FROM EITHER THE TENANT OR THE ASSIGNEE, BUT NOT BOTH, UNDER AN ASSIGNMENT SUBLEASE:
- L T [p/k and p/e]
- T subleases T1 [new p/k, new p/e]
- L T1??? [NO P/K AND NO P/E] o So in an sublease, since T1 only has a portion of Ts string of time to possession , T is entering into a new property and a new lease contract with T o Because T still has the estate and the contract !!!!!!!!!!!!!!!!!!!!!! o SO, landlord CAN ONLY SUE T if T1 fails to pay rent!!! Then, tenant needs to go after T1. Landlord cant directly go after T1. IF TENNT IS NOT THERE, GET A DEFAULT JUDGMENT AGAINST T and u can evict T1..... but cant force T1 to pay rent bc no privity of contract/obligation or estate of T1 to L DELIVERY OF POSESSION = “landlord defaults,” not rlly, but prior tenant holds over/ new tenant doesn’t do anything wrong Operation of L-T relationship
- 1 st^ thing is getting property into tenants hands / establishing possession
- Does prop law govern the obligations of the landlord to deliver? Or is it contract law? Hannan v Duesch says prop law governs delivery o This is a question of the rights/duties of landlords and tenants at beginning of lease o This court says property law [aka independent obligations] aka LANDLORD HAS NO IMPLIED DUTY/OBLIGATION TO DELIVER ACTUAL POSSESSION, just a duty to deliver a right to possession o So landlord does not have a duty to oust hold over tenants = AMERICAN RULE WHY? Landlords will be reluctant to lease premises before leases are up if not. Because with duty comes $ and time. They’ll wait, then see if tenant gone, then lease and btwn that gap it will be empty … efficient use of property doctrine // less homelessness
- Exceptions to this rule: o Lease provides that landlord has duty to oust hold overs/deliver actual possession that is capable of being occupied o Also, English rule = in absence of express lease provision, landlord has an implied duty/promise to deliver actual possession of premises. From day 1. WHY? Certainty in L-T relationship , discourages trespasses/hold overs // contract law doctrine and dependent/mutuality of obligations Herpolsheimer v Christopher agrees. So this is what u argue if ur the new tenant’s lawyer
THE TENANT WHO DEFAULTS and DUTIES = THOUGH THIS IS mostly FOCUSING ON LANDLORDS RIGHTS, 2 CASES FOCUS ON THE LANDLORDS DUTIES / OBLIGATIONS ***tenant doesn’t pay rent, violates some obligation of lease, holds over beyond lease term, trespasses or abandons premises , with or without notice???? ***
- if T is in possession sue for back-rent owed OR sue to terminate lease for violation
- when duty to mitigate or concerned by abandonment / DEFAULT security deposit so secure and default is dissauded, but cant be unlimited [most jurisdictions limit to 1-2 months rent at max] and usually have to keep sep from fund / cant use them, must keep a record of them, but may be entitled to interest if tenant complies fully [statutory amt set]
- to secure from the start“if tenant defaults, balance of any rent is due immediately” = rent acceleration clause in the lease for commercial leases , but once paid=paid for possession under lease and cant evict
- evict , sue , default judgments…. = ALL THROUGH THE LAW/courts, REALLY [unless nonprofit or rehab]. Or through language of lease 1) = contract law is modern trend, prop law is “majority” and for commercial, 2) modern trend = contract ish. 3) property law wins, 4) mix of both!
- duty [not landlords rights] to mitigate when abandons prior “breathed into the contract / lease” contract law doctrine bc ujnder contract law, breaches of contract require duty to mitigate loss
- If it was prop law is majority rule [42 states], bc tenant has exclusive possessory string of time, tenant has all of the obligations of estate for that time [no duty to mitigate tenants obligations – rights and duties are independent] bc landlord conveyed all of those rights and obligations go with it… [in commercial leases, common law 516 restatement ALI, some cases – Muller and Heckel]
- But, contract law governs in modern era [mutuality obligation/dependent rights and duties – Sommers, Riverview tried, Austin Hill Country Realty v Palisades shows us it brings it to productive use and in breach, benefits landlord usually], subject to “ reasonable efforts” to relet premises…. Usually means = landlord showed/offered to prospective tenants or advertised [ tenant can rebut by showing proffered suitable tenants who were rejected] o So it’s a fact-intensive inquiry o If demanding far higher rent, prob not reasonable diligence o In NY, common law for commercial and residential is modern [rios v carrillo] **TAKEAWAY:
- landlords always accept surrender/abandon of premises** and relieve tenant of further obligations to pay [CHOOSE TO MITIGATE / IMPOSE OWN OBLIGATION IN MOST CASES BECAUSE THEY WANT TO MAKE $ AND WHO KNOWS IF CAN GET IT FROM TENANT] 2) may relet and if they make reasonable efforts where obligation to mitigate, that is compliance w/ duty and landlord can seek any other rent due from the tenant
