Landlords of Rental Residential Property Discussion and Responses

Description

Alabama is one of the few states that has resisted requiring that landlords be held responsible for the condition of rental housing.  Even with the changes in Alabama’s landlord/tenant laws that became effective 1/1/07, Alabama still lags behind other states on the issue of renters’ rights.  Many would argue that tenants have the right to expect clean, safe, habitable housing.  Others take the position that the market should drive the suitability of housing, meaning that tenants will move from unsafe, substandard housing to better housing as better housing becomes available.  Odds are that you have been a tenant and that you will be a landlord at some point in time.  Should the State impose duties on landlords of rental residential property (property intended for human occupancy)?  If so, what should those duties be?  What rights should tenants have, if any?

Twomey  Jennings Anderson’s Business Law and the Legal Environment, Comprehensive 20e Anderson’s Business Law and the Legal Environment, Standard 20e Business Law: Principles for Today’s Commercial Environment 2e Chapter 51 Leases Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 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. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 2 Creation & Termination • Tenancies are classified according to duration as tenancies for years, from year to year, at will, and at sufferance.

• The agreement between a lessor and a lessee by which the latter holds possession of real property owned by the former is a lease. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 3 Creation & Termination • State statutes prohibit discrimination and require that the lease not be unconscionable. • A lease is generally not terminated by the death, insanity, or bankruptcy of either party except for a tenancy at will. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 4 Creation & Termination • 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. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 5 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. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 6 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. • The tenant is under a duty to pay rent as compensation to the landlord. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 7 Repairs and Condition of Premises • 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. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 8 Repairs and Condition of Premises • 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. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 9 Liability for Injury on Premises • Landlord’s liability to Tenant. – At common law, landlord was not liable for injuries to tenant. – But Modern Trend holds Landlord liable. • Crimes by Third Persons. – Ordinarily landlord is NOT liable, – UNLESS reasonably foreseeable. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 10 Liability For Injury on Premises • 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. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 11 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. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 12 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 13 by statute. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning Landlord-Tenant Relationships Landlord-Tenant Relationship

• A relationship created when the owner of a freehold estate (landlord) transfers a right to exclusively and temporarily possess the owner’s property to another (tenant). Landlord-Tenant Relationship (continued) • Nonfreehold Estate – an estate in which the tenant has a right of possession of the property but not title to the property. • Leasehold – a tenant’s interest in the property • Landlord – the owner who transfers the leasehold • Tenant – the party to who the leasehold is transferred The Lease • A transfer of the right to the possession and use of the real property for a set term in return for certain consideration. – Rental agreement between a landlord and a tenant • Types of tenancy – Tenancy for years – Periodic tenancy – Tenancy at will – Tenancy at sufferance Types of Tenancy Type of Tenancy Tenancy for Years Description Continues for the duration of the lease and then terminates automatically without notice.

It does not terminate by the death of either party. Periodic Tenancy Continues from payment interval to payment interval. It may be terminated by either party with adequate notice. It does not terminate upon the death of either party. Types of Tenancy (continued) Type of Tenancy Description Tenancy at Will Tenancy at Sufferance Continues at the will of the parties. It may be terminated by either party at any time with adequate notice. It terminates upon the death of either party. Arises when a tenant wrongfully occupies real property after the expiration of another tenancy or life estate. It continues until the owner either evicts the tenant or holds the tenant over for another term. It terminates upon the death of the tenant.

Landlord’s Duty to Deliver Possession of the Leased Premises • Duty to Deliver Possession – A lease grants the tenant exclusive possession of the leased premises (1) for the term of the lease or (2) until the tenant defaults on the obligations under the lease. – A landlord may not enter leased premises unless the right is specifically reserved in the lease. Landlord’s Duties • The landlord owes the tenant a duty to: – Deliver possession – Not to interfere with the tenant’s right to quiet enjoyment – Maintain the leased premises Duty Not to Interfere with the Tenant’s Right to Quiet Enjoyment • The law implies a covenant of quiet enjoyment in all leases.

• The landlord may not interfere with the tenant’s quiet and peaceful possession, use, and enjoyment of the leased premises. – Wrongful eviction if landlord actually evicts tenant. – Constructive eviction if landlord allows premises to become unfit. Landlord’s Duty to Maintain the Leased Premises • State and local municipalities have enacted building codes – Statutes that impose specific standards to maintain and repair premises – Provide minimum standards for heat, light, water Tenant’s Duties • The tenant owes the landlord a duty: – Not to use leased premises for illegal or nonstipulated purposes – Not to commit waste – Not to disturb other tenants – To pay rent Tenant’s Duty to Pay Ren

t • A commercial or residential tenant owes duty to pay the agree-upon amount of rent for the leased premises to the landlord at the agreeupon time and terms. • Common commercial rental arrangements: – – – – Gross lease Net lease Double net lease Net, net, net lease (triple net lease) • Unlawful detainer action Implied Warranty of Habitability • A warranty that provides that the leased premises must be fit, safe, and suitable for ordinary residential use. • If landlord’s breach affect’s tenant’s use or enjoyment of premises, tenant may: – – – – Withhold amount from rent reflecting this loss of value. Repair defect and deduct expenses from rent. Cancel lease if it constitutes a constructive eviction. Sue for damages for amount leasehold value reduced. Premises Liability The liability of landlords and tenants to persons injured on their premises. Tenant’s Duty of Reasonable Care • A tenant owes a duty of reasonable care to persons who enter upon the leased premises. – If a tenant’s negligence causes injury to a third person, the tenant is liable in tort for any damages.

Landlord’s Duty of Reasonable Care • Landlords owe a duty of reasonable care to tenants and third parties not to negligently cause them injury. – This duty is based on the foreseeability standard of ordinary negligence actions. – Landlord who breaches duty is liable for tort damages. Transfer of Rights to Leased Property • Landlords may sell, gift, devise, or otherwise transfer their interests in the leased property. – If complete title is transferred, the property is subject to the existing lease. • The tenant’s right to transfer possession of the leased premises to another depends on the terms of the lease. – Assignment – Sublease Assignment of a Lease • A transfer by a tenant of his or her rights and duties under a lease to another. • The party who transfers the rights is the assignor. • The party to whom rights have been transferred is the assignee. • The assignor remains responsible for his or her obligations under the lease. Sublease • Occurs when a tenant transfers only some of his or her rights under the lease.

• The sublessor transfers those rights to the sublessee. • No legal relationship is formed between the landlord and the sublessee. Rent Control • Rent control ordinances stipulate the amount of rent a landlord can charge for residential housing. • Rent is fixed a a specific amount. • Minor annual increases are provided for. • Upheld by the U.S. Supreme Court. – Yee v. City of Escondido, California, 112 S.Ct. 1522 (1992) Land Use Control • Generally, the ownership of property entitles the owner to use that property as the owner wishes. • Land use control is the collective term for the laws that regulate the possession, ownership, and use of real property. – Private regulation of land use – Public regulation of land use Zoning • Local laws that are adopted by municipalities and local governments to regulate land use within their boundaries.

• Adopted and enforced to protect the health, safety, morals, and general welfare of the community. • Zoning is the primary form of land use regulation in the United States. Zoning (continued) Zoning ordinances generally: 1. Establish use districts within the municipality (e.g., residential, commercial, or industrial) 2. Restrict the height, size, and location of buildings on a building site 3. Establish aesthetic requirements or limitations for the exterior of buildings Zoning Variance • An exception that permits a type of building or use in an area that would not otherwise be allowed by a zoning ordinance. (continued) Nonconforming Uses • Uses and buildings that already exist in the zoned area that are permitted to continue even though they do not fit within new zoning ordinances. Civil Rights Act • A federal statute that prohibits racial discrimination in the transfer of real property.

• These laws usually prohibit discrimination based on race, color, national origin, sex, or religion. – Age – Sexual preference – Persons receiving government assistance The Fair Housing Act • Federal statute that makes it unlawful for a party to refuse to rent or sell a dwelling to any person on the basis of race, color, national origin, sex, or religion. • Prohibits discrimination by real estate brokers, mortgage lenders, and advertisers concerning the sale or rental of real property. Title III of the Americans with Disabilities Act

• A federal statute that prohibits discrimination on the basis of disability in places of public accommodation by private entities. • Does not generally apply to residential facilities. • New construction and alterations must be made so as to be readily accessible to and usable by disabled persons. Compensable Taking of Real Property • Eminent Domain- The taking of private property by the government for public use, provided just compensation is paid to the private property holder. • Just Compensation Clause- Requires the government to compensate the property owner, and possibly others, when the government take property under its power of eminent domain.

Discussion 1 ( three students) Student 1 I do not think that the state should impose duties on landlords. The tenants sign a contract before they move in the rental house. When they sign the rental agreement, they are agreeing to the landlords rules and regulations. It is the tenants duties to follow those responsibilities and follow through with the contract. It should also be on the tenants to keep the place clean and pay rent on time. The landlord should make sure that the tenants follow through on their duties. It is not the tenants home; therefore, they need to take care of it.

Student 2 Tenants should have clean and safe living quarters, especially for the price they are paying to live there. Most of the time, rent is more than a house payment, so usually landlords are making lots of money off of the renting process. If the tenants keep their things clean, then the same should be expected from the landlords about the condition of their property. In a situation that the tenant caused the damage, they should be expected to pay to get it back to the condition it was before. However, if it is wear and tear or a cause by nature the landlord should be responsible. The uptake of a house requires routine maintenance and that should be provided to the tenants in the event something needs replacing or fixing. Rights of safety and sterile housing conditions should be required and expected from the landlord. Tenants should give the same respect back in that they care for the house and do not destroy the property.

Student 3 Yes, I think there should be certain rules that apply solely for landlords. Sometimes landlords try to scam tenants in a variety of ways. I think that having some rules set in place to minimize these obstacles for tenants would be very beneficial. Tenants deserve to have a decent place to live. If they are trapped in a lease then they expect the landlord to take care of any issues that arise. Having a few rules and regulations in place would help tenants with issues such as habitable and cleanliness.

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