Landlord–Tenant — Real Property

It is December in Franklin and a tenant's furnace dies. She emails her landlord, who ignores her for three weeks while the apartment sits near freezing. So she stops paying rent, and she stays. Now ask the question the exam will ask. Can she do that?

Under the older law, absolutely not. Her duty to pay rent stood entirely on its own, so withholding was itself a breach and she owed every dollar. Under modern law she may well win, but only if she reaches for the right doctrine, because one of the two obvious ones collapses the moment she decides to stay.

Here is the route. First the four leasehold estates and how they are created. Then possession, rent, and the three kinds of eviction. Then assignment and sublease, which is really a question about privity. Then early termination and the duty to mitigate. And finally habitability.

Start with what a lease actually is, because it is a strange two-headed creature. It is a conveyance. The landlord hands the tenant a possessory estate in land for a limited time and keeps a reversion, the right to get the property back. But it is also a contract, a bundle of promises about rent, repairs, and quiet use.

For centuries courts leaned on the conveyance half. Once you had your estate you were stuck with it, rent and all. Modern law leans on the contract half and gives tenants contract-style remedies. Almost every hard question here is a fight between those two views, and knowing which way modern law leans usually gives you the answer.

Four leasehold estates, and you tell them apart with two questions. How does it end, and does anyone have to give notice? Answer those and you have identified the tenancy, which tells you when rent stops and when the tenant can leave.

A tenancy for years is any leasehold measured by a fixed, calendar-certain period. One week, six months, five years. The label misleads, because actual years are not required. What matters is that the beginning and the end are known from the start. So the estate expires on its own, with no notice from either side. If the term runs longer than one year, the Statute of Frauds requires a writing.

Next, the periodic tenancy. It runs for a recurring period and renews automatically unless somebody gives proper notice to quit. It can arise expressly, by implication when rent is paid and accepted monthly, or by operation of law from a holdover. The notice rule is the trap. At common law you give notice equal to one full period, effective at the end of a period. One famous exception. A year-to-year needs only six months. Many modern statutes flatten it to thirty days.

Third, the tenancy at will. No fixed period, and it lasts only as long as both parties wish. Either can end it at any time. At pure common law no notice was required. Modern statutes usually require reasonable notice first. It also ends by operation of law if either party dies, if the tenant commits waste, or if either party transfers the interest.

Then the tenancy at sufferance, which is barely a tenancy. It is what a tenant becomes when the lease ends and the tenant wrongfully stays. A holdover, somewhere between a tenant and a trespasser. The landlord chooses. Evict and recover the reasonable rental value, or bind the holdover to a new periodic tenancy on the old terms.

And here is the nasty wrinkle. Nia has a one-year lease on a Columbia storefront at $2,000 a month, ending June 30. In May the landlord writes. If you stay past June 30, rent will be $2,600. Nia stays into July and signs nothing. She is bound to $2,600. A warning delivered before the term ends binds a holdover who never agreed.

One more note on creation. Leaseholds arise expressly, by implication, by operation of law, and even out of an invalid lease. An oral three-year lease flunks the Statute of Frauds, but the tenant who moves in and pays rent is not a trespasser. Possession under a void lease creates a tenancy at will, and once the landlord accepts periodic rent it becomes periodic.

Now possession, rent, and eviction. When the lease begins, must the landlord hand over an empty, ready-to-occupy space, or only the legal right to it? It bites when a previous tenant is holding over on day one. Under the English rule, the majority position and the Uniform Residential Landlord and Tenant Act position, the landlord owes actual physical possession. Under the American rule, the incoming tenant must evict the holdover.

Rent next. At common law rent is due at the end of the period, in arrears, unless the lease says otherwise. That is why nearly every real lease makes rent due in advance on the first. If the tenant does not pay, the old independent-covenants view let the landlord sue for the rent as a debt. It could not terminate unless the lease reserved a right of reentry.

Modern statutes give a summary eviction process instead. After a statutory pay-or-quit notice the landlord goes to court and gets both possession and a money judgment. And here is the rule worth memorizing. Self-help is barred in most states. A landlord who changes the locks, hauls out the belongings, or cuts the utilities is liable in damages even when the rent truly is unpaid.

Then eviction, in three flavors. An actual eviction is a physical exclusion. Shut the tenant out of the whole space and the rent obligation is extinguished. But partial actual eviction is counterintuitive, so test yourself. A landlord padlocks the storage room attached to a tenant's office suite while the office stays open and she keeps working there. Rent is $4,000 a month. How much does she owe?

Nothing. Nothing at all, while she keeps using the office. The reasoning is punitive. A landlord may not apportion its own wrong. Contrast a partial eviction by someone holding paramount title, who ousts the tenant from part of the land. There the rent is apportioned. Landlord causes it, no rent. Better title, pro-rated.

Constructive eviction is the third flavor, and it is where our freezing tenant comes in. The landlord never touches her but makes the premises unusable. No heat in January. Raw sewage in the basement. The law treats intolerable conditions as if the landlord had thrown her out. It is demanding, with four requirements, and the last is where everyone slips.

Substantial interference, a chronic serious problem and not a dripping faucet. Attributable to the landlord, so harm from strangers will not do. Notice and a chance to cure. And the tenant must actually vacate within a reasonable time. So back to December. Our tenant stopped paying and stayed. Constructive eviction, or not? Not. She never left.

All three flavors are one idea. Every lease, residential and commercial, contains an implied covenant of quiet enjoyment, a promise not to interfere with the tenant's possession and use. Actual, partial, and constructive eviction are the ways a landlord breaches it. The covenant reaches the landlord, those acting for it, and anyone holding paramount title, but not strangers.

On to assignment and sublease, where one line separates them. Did the tenant transfer everything left, or hold something back? The entire remaining term is an assignment. Less than that, keeping a reversion, is a sublease. Try it. A tenant with two years to run transfers the space but keeps the final six months. Assignment or sublease? Sublease. Keeping a single day is enough.

That difference decides who stands in privity with the landlord, and there are two kinds. Privity of estate exists between whoever currently holds the leasehold estate and the landlord. It makes that holder liable for covenants running with the land, rent being the classic one. Privity of contract exists between the landlord and anyone who actually promised to perform the lease.

So work an assignment. The assignee steps into privity of estate and is directly liable for rent accruing while it holds the estate. But the original tenant does not walk away. It stays in privity of contract, liable for the entire term as a kind of surety. Only a novation, where the landlord agrees to release it, cuts that off.

Two refinements finish the chain. Reassignment. If the assignee assigns again, its privity of estate ends and it owes nothing accruing after it leaves, though it still owes what came due on its watch. And assumption. An assignee who expressly assumes the lease enters privity of contract and stays liable for the balance of the term.

A sublease is different, because the sublessee never comes into privity of estate or contract with the landlord. It is the original tenant's tenant, and the landlord generally cannot sue it for rent unless it expressly assumed. The original tenant remains fully liable. The landlord's leverage is indirect. Terminate the main lease for the tenant's default and the sublease falls with it.

Landlords try to control this with covenants against assignment or subletting. Courts enforce them but treat them as restraints on alienation, strictly construed against the landlord. So a covenant barring assignment does not bar subletting. A transfer made in violation is still valid. The remedy is termination, only if a right of reentry was reserved, or damages. And accepting rent from the transferee waives the covenant.

One live split before we move on. When the lease lets the tenant assign only with the landlord's consent but sets no standard, the traditional rule lets the landlord refuse for any reason. The modern trend, especially for commercial leases, permits refusal only on a commercially reasonable ground.

Early termination starts with surrender. The tenant offers the leasehold back and the landlord accepts, extinguishing future rent. It can be express or implied from conduct. A surrender of a lease with more than a year left generally needs a writing. And the catch is proving acceptance. No acceptance, and the tenant is still bound.

Abandonment is the tenant's unilateral exit. Moves out for good, stops paying, and the landlord agreed to nothing. The law treats it as an offer of surrender, and traditionally the landlord had three options. Accept it and end the lease. Re-let on the tenant's account and hold the tenant for any deficiency. Or leave the unit empty and sue.

That third option is largely gone, and this is the biggest modern change here. The duty to mitigate. At common law the landlord could let the unit sit and sue for every month, because a lease was a conveyance and the tenant owned the term. Today the overwhelming majority of states require reasonable efforts to re-rent an abandoned residential unit.

Two wrinkles close this out. If the tenant clearly repudiates, announcing it will never pay, the landlord may treat that as an immediate breach and sue at once. And beware the acceptance-of-surrender trap. A landlord who retakes for its own purposes may be found to have accepted the surrender and released the tenant. So may one who re-lets without making clear it acts on the tenant's account.

Which brings us to habitability, and the shift underneath everything. At common law lease covenants were independent. The duty to pay rent stood on its own, so even if the landlord broke a promise the tenant kept paying and sued separately. Modern law treats the key covenants as dependent, like ordinary contract promises, so a material breach reduces the rent.

Start with the baseline it replaced. The landlord had no implied duty to repair and the tenant took the premises as is. The tenant had a duty not to commit waste and to make ordinary repairs. But the tenant was never liable for ordinary wear and tear, which a landlord also cannot charge against a security deposit. And if the premises were destroyed without fault, the tenant kept paying. Modern statutes reverse that.

The centerpiece is the implied warranty of habitability. In every residential lease the landlord impliedly warrants the premises are fit for human habitation, meeting the local housing code and providing the essentials of safe living. Heat. Running water. Working plumbing. Secure doors and windows. No serious pest infestation. Three features make it powerful.

It is implied automatically and cannot be waived, so a clause disclaiming it is void against public policy. It applies only to residential leases. And unlike constructive eviction it does not require the tenant to move out. After notice and a reasonable chance to cure, there are four remedies. Terminate and leave. Repair and deduct. Withhold or reduce rent. Or stay, keep paying, and sue for damages.

So return to our freezing tenant, who wanted to stay. Constructive eviction was useless to her, because it demands she leave. The warranty fits perfectly. No heat in winter violates the housing code and the requirements of habitable living. She can repair and deduct, reduce her rent, or stay and sue, without moving a box. One footnote. A minority of jurisdictions recognize a warranty of suitability for commercial space, and statutes forbid retaliation.

A word on authorities. This episode named no cases, and that is right for this topic. Landlord-tenant runs on doctrines, not citations, and a NextGen question drops you into a lawyer's chair and asks whether the tenant may stop paying, or whom the landlord can sue. Because the topic is starred, no statute is coming either.

If you keep only three things, keep these. The two questions that identify a tenancy, how it ends and whether notice is required. The privity pair, because privity of estate follows whoever holds the estate and privity of contract follows whoever made the promise. And the vacate line, separating constructive eviction from habitability.

Now the traps, straight from the examiners' favorites. One. A tenancy for years needs no notice to end, and a year-to-year needs only six months. Two. A holdover is the landlord's election, and a warning delivered before the term ends can raise the rent on a tenant who never agreed. Three. Under the majority English rule, a first-day holdover is the landlord's problem.

Four. A partial eviction by the landlord relieves the tenant of all the rent, not a pro-rated slice. Only a partial eviction by someone with paramount title gets apportioned. Five. Constructive eviction requires the tenant to move out. Staying and withholding defeats the claim. Six. Self-help eviction is illegal in most states even against a tenant who has not paid.

Seven. Assigning never releases the original tenant. Only a novation does. Eight. A transfer that violates a no-assignment covenant is still valid, and read the covenant literally, because no assignment does not forbid a sublease. Nine. The landlord must mitigate. Ten. The warranty of habitability is residential only and cannot be waived.

Time for the quick check, and this one comes straight from the BARGO question bank. A tenant assigns the remaining three years of its lease to an assignee, who takes possession and promises the landlord nothing. A year later the assignee defaults on the rent and disappears. The landlord turns to the original tenant, who protests that it assigned long ago and moved out entirely.

Is the original tenant liable for the assignee's unpaid rent? Option one. No, because assigning the lease transferred all of the tenant's obligations. Option two. Yes, because the original tenant remains in privity of contract for the term. Option three. No, because the assignee's privity of estate made it the only party liable. Pause here if you want a moment.

The answer is option two. Assigning a lease does not release the original tenant. It stays in privity of contract and remains liable for the rent for the entire term, essentially as a surety. Only a novation would cut that off. Option one is the common misconception. The assignment transferred the estate, not the promise to pay. Option three is half right. The assignee is liable in privity of estate, but that is additional to the tenant's liability.

If option three felt reasonable, that is the trap worth drilling. There are thirty plus more questions on this topic alone, each with every option explained like that.

Five things to take away. One. Identify the tenancy by how it ends and whether notice is required, and a year-to-year needs only six months. Two. A holdover is the landlord's election, and under the English rule a first-day holdover is the landlord's problem.

Four. A partial eviction by the landlord relieves all the rent. Assignment puts the assignee in privity of estate while the original tenant stays in privity of contract. A sublease gives the landlord nobody new to sue. Five. Constructive eviction requires the tenant to leave, habitability does not, and the landlord must mitigate.

Which is why our tenant in the freezing apartment loses on one doctrine and wins on the other, without moving a box. She was never wrong to stay. She was wrong about which half of the lease she was suing on. Next time, Fair Housing.

Practice this topic with more than 2,900 exam-style questions, free to start, at nextgenbargo.com. This episode is for education and exam preparation only, not legal advice, and we are not affiliated with or endorsed by the NCBE or any bar examining authority.