Transcript BUSINESS LAW Twomey & Jennings Leases Chapter 50

BUSINESS LAW
Twomey • Jennings 1stEd.
Twomey & Jennings
BUSINESS LAW
Chapter 50
Leases
© 2004 West Legal Studies in Business
A Division of Thomson Learning
BUSINESS LAW
Twomey • Jennings 1stEd.
Creation & Termination
• The agreement between a lessor and a lessee by
which the latter holds possession of real property
owned by the former is a lease.
• State statutes prohibit discrimination and require
that the lease not be unconscionable.
• Tenancies are classified according to duration as
tenancies for years, from year to year, at will, and
at sufferance.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Creation & Termination
• A lease is generally not terminated by the death,
insanity, or bankruptcy of either party except for a
tenancy at will.
• Leases are usually terminated by the expiration of
the term, giving of notice, surrender, forfeiture, or
destruction of the property or because of fraud.
• A lease may require written notice of termination
to prevent automatic renewal of the lease, or it
may require written notice of intent to renew the
lease.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Classification of Tenancies
1. Tenancy for years
(Fixed Term)
2. Periodic tenancy
(Indefinite length; runs period to period)
3. Tenancy at will
(Indefinite length terminable by either
party at any time)
4. Tenancy at sufferance
(hold over tenant)
(can remain only if landlord permits)
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BUSINESS LAW
Twomey • Jennings 1stEd.
Rights and Duties of Parties
• A tenant has the right to acquire possession of the
property, enjoy use of it without interference, and
retain possession until the lease is ended.
• Evictions may be either actual or constructive, and
may violate the tenant’s rights unless tenant has
not fulfilled his duties.
JMB Properties Urban Co. v Paoluci
(1992) Shake, Rattle, Roll and Evict?
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BUSINESS LAW
Twomey • Jennings 1stEd.
Rights and Duties of Parties
• The tenant is under a duty to pay rent as
compensation to the landlord.
• Repairs and Conditions of Premises.
–
–
–
–
Landlord has the right to enter.
Tenant has no duty to repair (unless agreed).
Landlord has duty to repair with reasonable care.
Compliance with ADA.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Rights and Duties of Parties
• Warranty Of Habitability.
– Running water, heat in winter, free from
structural defects.
• No duty for improvements.
• Remedies of Landlord.
– Landlord’s Lien.
– Forcible Entry and Detainer.
– Landlord’s duty to Mitigate Damages.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Liability for Injury
• Landlord’s liability to Tenant.
– At common law, landlord was not liable for
injuries to tenant.
– But Modern Trend holds Landlord liable.
Errico v LaMountain (1998) Please
Help Me; I’ve Fallen and I can’t Get
Up.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Liability for Injuries
• Crimes by Third Persons.
– Ordinarily landlord is NOT liable,
– UNLESS reasonably foreseeable.
Sharon P. v Arman Ltd. (1999) The
Lights Were Out and Crime Was Up:
Was the Landlord Liable?
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BUSINESS LAW
Twomey • Jennings 1stEd.
Liability to Third Parties
• Landlord’s Liability.
– Generally NOT liable to third persons injured
on property under tenant’s control.
– Landlord IS liable for injuries in common areas
(stairs, elevator).
• Tenant’s Liability.
– Liable to Licensees.
– Liable to Invitees.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Transfer of Rights
• An assignment of a lease by the tenant is a
transfer of the tenant’s entire interest in the
property to a third person.
• A sublease is a transfer of less than an entire
interest—in either space or time.
• A lease may prohibit both an assignment
and a sublease.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Liability in Assignment or
Sublease
• If the lease is assigned, the assignee is liable
to the landlord for the rent.
– Such an assignment, however, does not
discharge the tenant from the duty to pay rent.
• In a sublease, the sublessee is not liable to
the original lessor for rent unless that
liability has been assumed or is imposed by
statute.
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