Chapter 50 Landlord-Tenant Law Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education Overview • LO50-1: How is the landlord-tenant relationship created? • LO50-2: What are the rights and duties of the landlord and tenant? • LO50-3: What are landlords' liabilities for injuries on the premises? • LO50-4: How are interests in leased property transferred? • LO50-5: How are leases terminated? 50-2 Chapter 50 Hypothetical Case • As a new resident of Portland, Oregon, Sam Cheng was overjoyed he was able to snag a reasonably priced apartment in the City of Roses's trendy Pearl District Cheng signed the one-year lease on a Friday afternoon and moved in the next Monday On Tuesday morning at 8:00 a.m., Cheng heard a knock at his front door The landlord, Fred Brownstein, was there, and announced it was time for Sam's first apartment inspection Cheng thought it a bit unusual that Brownstein was inspecting less than 24 hours after he moved in, but he granted him entry The landlord examined each of the three rooms, made note of the fact that Cheng passed inspection, and left the apartment On Saturday morning at 8:00 a.m., Cheng again heard a knock at his front door Brownstein was there and announced it was time for Cheng's second apartment inspection Surprised and angry, Cheng said, "For crying out loud, Fred, you were just here four days ago!" Undeterred, Brownstein proclaimed, "Mr Cheng, if you read your lease contract, you will see that I have reserved the right to inspect your apartment twice weekly—once on Tuesday, and once on Saturday I suggest you let me in, or you will be in breach of the lease contract, and I will have no choice but to evict you." Cheng checked his copy of the lease contract and found the Tuesday-Saturday inspection regimen on the third page • Does Cheng have a legal obligation to allow Brownstein to inspect his apartment twice weekly? 50-3 Chapter 50 Hypothetical Case • Al Jennings is an undergraduate student at Central Montana Technical University (CMTU) During the academic year, Jennings lives in off-campus housing at Elk Meadows Apartments After finishing his junior year in the spring, Jennings planned to go home to Billings, Montana, for the summer Since his friend, Corey Hammonds, was enrolled in summer school at CMTU and needed a place to live, Jennings allowed him to move into his apartment Before he left for Billings, Jennings instructed Hammonds to pay Elk Meadows's on-site property manager, Ashley Hunter, rent in the amount of $575 by the first day of each month in June, July, and August Hammonds assured Jennings he would so and told his friend he was happy to find such a nice place to live for the summer at such an affordable price Jennings informed Hammonds he would return to CMTU and Elk Meadows for the fall semester on August 22 When Jennings returned to his apartment in August, he was surprised to find it unoccupied Within an hour, there was a knock at his door It was Ashley Hunter Hunter wanted to know why Jennings had not paid rent for the past three months Jennings immediately dialed Hammonds's cell phone number and Hammonds answered, explaining that he had withdrawn from summer school in May, choosing instead to hitchhike around the west Jennings was dismayed • Is Al Jennings liable to Elk Meadows Apartments for the three months' rent? 50-4 Landlord-Tenant Law Terminology • Landlord (lessor): Property owner • Tenant (lessee): Party who assumes temporary possession of property • Leasehold estate: Property subject to the lease • Lease: Contract between landlord and tenant 50-5 Types of Leases • Definite term: Automatically expires at end of designated term • Periodic tenancy: Created for a recurring term • Tenancy at will: Termination may occur at any time • Tenancy at sufferance: Tenant fails to leave property after termination of lease 50-6 Fair Housing Act • Fair Housing Act: Prohibits landlords from discriminating on basis of race, color, sex, religion, national origin, or familial status 50-7 Rights and Duties of Landlords and Tenants • Rights and duties of landlords and tenants terminology and rules of law are as follows: • • Covenant of quiet enjoyment: Promise that tenant has right to quietly enjoy the land • • • • • Constructive eviction: Premises become unsuitable for use due to landlord Actual eviction: Landlord physically prevents tenant from entering premises; can be full (prohibited from all parts) or partial (prohibited from some parts) Implied warranty of habitability: Requirement that premises be fit for ordinary residential purposes Waste: Tenant conduct that causes permanent and substantial injury to landlord's property Alterations: Changes that affect condition of premises; generally cannot be made without landlord's consent Common areas: Areas used by all tenants for which landlord is responsible 50-8 Rights and Duties of Landlords and Tenants (cont'd) • • Rights and duties of landlords and tenants terminology and rules of law are as follows: • • Rent: Compensation paid to landlord for tenant's exclusive use of and right to possess premises • Landlord's lien: Landlord's right to some/all of tenant's property when rent unpaid Rent escalation clause: Clause included in lease that allows landlord to increase rent for increases in cost of living, property taxes, or tenant's commercial business Options when landlord fails to repair leased property: • • • • Terminate lease Withhold rent Repair and deduct costs of repair Sue landlord 50-9 Rights and Duties of Landlords and Tenants: Examples • Duty • Landlord duty to put tenant in possession • Landlord duty of covenant of quiet enjoyment • Tenant duty not to commit waste • Corresponding Right • Tenant's right to retain possession • Tenant's right to quiet enjoyment of the property • Landlord's right to reimbursement for tenant's waste 50-10 Liability For Injuries on the Premises • Landlord liability: Landlord can be held liable for injuries sustained in common areas, and for injuries that occur outside common areas due to lack of repairs landlord should have made • • • Landlord has responsibility to ensure that premises are in reasonably fit condition before tenant takes control Foreseeability of crime is a factor in liability Tenant's liability: Tenant must keep premises in a reasonably safe condition, but is responsible only for those areas where customer or visitor reasonably expected to go 50-11 Transferring Interests of Leased Property • Landlord transfer of interest: Landlord may transfer property; new owner • becomes landlord until tenant's lease expires Tenant transfer of interest • Assignment: Transfer of tenant's entire interest in leased property • Sublease: Transfer of less than all of tenant's interest in leased property 50-12 Termination of Lease • • • • • Breach of condition by landlord: Landlord interferes with tenant's use and enjoyment of premises Forfeiture: Tenant/landlord fails to perform conditions specified in lease Destruction of premises: Fire/other disaster destroys premises Surrender: Mutual agreement between landlord and tenant Abandonment: Tenant moves out of leased premises before end of term 50-13 Chapter 50 Hypothetical Case • While the rest of the country debates whether climate change is real, or whether mankind is responsible for it, all Trent Withers knows is that he is hot Extremely hot The temperature is 99 degrees in Lucasville, and the air conditioner in Withers's apartment at Shady Valley Estates has been inoperable for the past two weeks The apartment building's owner lives 100 miles away in Kensington, and although there is an apartment manager supposedly living on-site, he can never find him The sign on the apartment manager's door always says, "Will return at 12:00 noon," but even in the afternoon and evenings, the manager never answers his door Withers is considering his options He cannot afford a wall-unit air conditioner; even if he could, he wonders whether installing such a unit would violate the terms of his lease Withers signed a 12-month lease obligating him to pay a rent amount of $795 per month, and there are 10 months remaining on the lease A friend who lives in neighboring Floral Valley has offered Withers a room in his house for $300 per month • Does Withers have the legal right to pack his bags and leave? If he does, will he be responsible for any remaining amount due on the lease term at Shady Valley Estates? 50-14 Chapter 50 Hypothetical Case • Rachel Covington rents a $750 per month home in Wichita Falls from Olivia Davis, and she has lived happily in the apartment for 10 years Five years ago, Davis moved out of the state, but Covington's monthly rent checks have arrived without trouble since Davis moved away Covington invited her boyfriend, Warren Hastings, over for dinner one evening After dinner, Covington went into the living room to turn on the TV, and Hastings decided to make a pot of tea He called to Covington and asked if she'd like a cup as well Covington said, "No," and then said, "Warren, I don't think the stove is working I've been meaning to call Olivia about it." Boom! Hastings had first tried to turn on the burner, and when it failed to light, he used a book of matches to ignite it As soon as he lit the match, the gas caused a small explosion Hastings was severely burned on his face and hands • Is Davis liable for Hastings's injuries? Or is Covington liable? 50-15 ... Is Al Jennings liable to Elk Meadows Apartments for the three months' rent? 50-4 Landlord-Tenant Law Terminology • Landlord (lessor): Property owner • Tenant (lessee): Party who assumes temporary... of Landlords and Tenants • Rights and duties of landlords and tenants terminology and rules of law are as follows: • • Covenant of quiet enjoyment: Promise that tenant has right to quietly enjoy... Landlords and Tenants (cont'd) • • Rights and duties of landlords and tenants terminology and rules of law are as follows: • • Rent: Compensation paid to landlord for tenant's exclusive use of and right