LANDLORD—TENANT: TENANT’S DUTIES
Landlord—Tenant: Duties & Rights
Landlord
Implied Warranty of Habitability: L obligated to
maintain prop. such that it’s suitable for residential
use. Concerned w/conditions that threaten T’s
health and safety (not for commercial prop)
(doesn’t require T to vacate premises. Housing
codes=sets standard. Cannot retaliate against T.
Tenant
Duty to pay rent (contractual agreement):
suspended if: 1) Premises destroyed and T didn’t
cause damage; 2) Landlord completely or partially
evicts the tenant; 3) L materially breaches lease
T can’t waive habitability protection. If prop not
habitable, T may: 1) refuse to pay rent*; 2) remedy
the defect and offset costs against rent; or 3) defend
against eviction
*T must: 1) notify L of problem and 2) give L
reasonable opportunity to correct it
Tenant can w/hold rent when L’s actions make
premises wholly or substantially unsuitable for their
intended purposes, and T is constructively evicted
(T req. to vacate premises)
Implied Covenant of Quiet Enjoyment
(breached only when the L, someone claiming
through the L, or someone with superior title
disrupts the possession of the tenant. L must
control: common areas, nuisance-like behavior of
other tenants
Duty to repair: Residential lease: L is presumed to
Duty to avoid waste: background rule, doesn’t
be responsible for repairs. T must notify L.
have to be expressed in lease to apply. T’s duty not
(Provision in lease placing burden on T is usually
to commit affirmative or permissive waste. T may
void).
make changes to prop that increases prop’s value—
L not responsible to make repairs cause by T’s
L’s usually require permission before changes. L can
actions. May do it but charge T.
put provision prohibiting improvements
Commercial lease: L can place duty on T (T in
better position to repair bc it’s their business)
Duty to mitigate damages: (maj. rule: L must
make reasonable efforts to re-rent prop. (min. rule:
L doesn’t have to mitigate damages (more common
in commercial cases)
Duty to deliver possession
(maj. rule: must deliver actual (physical) possession.
Tenant relieved to pay rent if not); (minority rule:
only required to deliver legal possession)
Tortliability
Landlord
Tenant
Latent defects (tenant not warned); faulty repairs;
Duty of care—invitees, licensees, and foreseeable
negligence causing injuries in common areas
trespassers
(common law). Duty of reasonable care (modern
approach)
TRANSFERS
Landlord—Transferor: created leasehold
relationship
Tenant—Transferee: Received leasehold from L;
transferring interest to subsequent T
Subsequent T—Transferee: Receiving leased
prop
Assignments
Subleases
Defined: Complete transfer of T’s remaining term
Defined: Transfer for less-than the entire duration
of lease (*if T retains a reversionary interest in
leasehold, transfer is sublease*)
Rent: L can collect from T (privity of K); or Sub-T Rent: L can collect from T (privity of K and estate)
(privity of estate)
(*sub-T only rent obligation to original T)
(*if assignee T reassigns leasehold to a sub-T, then
assignee T’s privity w/L ends—no longer liable bc
sub-T is in privity w/L*)
Three Parties
PERMISSION
Absent language to the contrary, a lease may be freely assigned or sublet. If lease terms require permission
of L before a T may transfer her interest, but are silent as to the applicable standard, the maj./min. rules
apply:
Maj. Rule
Min. Rule
L may deny permission to a transfer only for a
L may deny permission at her discretion (for any
commercially reasonable reason
reason or no reason at all)
L doesn’t need T’s permission before transferring
Transferring L’s interest: 
interest. New L is bound by terms of existing lease.
LAND—SALE CONTRACTS
Stages to Land
Transactions:
Liability is
controlled by stage:
Doctrine of Merger
Contracts
parties negotiate terms
Deeds
parties transfer property after
contract is signed
Any liability must be based on a contract
Any liability must be based on a deed
provision
warranty
Covenants under contract are merged into the deed and any remedy will flow from
the deed
Requirements
Exceptions to Statutes of
Frauds
Both often go hand in hand
Statute of Frauds*
1) Must be in writing
2) Must be signed by the party to be charged;
and
3) Must include essential terms (parties,
description of property, and price and
payment info)
Doctrine of Part Performance
Detrimental Reliance
Treated as evidence that the K
existed (acts of performance such
as payment of all or part of
purchase price, possession by
purchaser, or improvements by
purchaser) (*many states require
at least two acts of performance)
An estoppel doctrine that applies
where a party has reasonably
relied on the K and would suffer
hardship if the K is not enforced
Land Sale Contracts—Performance & Remedies
Delays
Unless the K or parties notify, time is not of the essence. If time not of
essencefailure to close on date set for close may be breach of K, but is
not grounds for rescission of K. Specific performance still available
Implied Warranty of Fitness or Applies to defects in new construction.
Suitability (*implied in K for
Most jxs: both initial homeowner—purchaser and subsequent purchasers
sale of newly constructed
may recover damages.
residence)(Extends to repair or
Other jxs.—only the original buyer can enforce this warranty
remodeling of existing residence
(Generally: suit for breach of this warranty must be brought w/in a
in some jxs)
reasonable time after discovery of defect. Some jxs have statutory time
period)
Duty to Disclose Defects (*all
Most jxs impose duty on seller to disclose to buyer all known, physical and
homes)
material defects
Merger (frames whole land-sale
After closing, obligations contained in K are merged into deed. If
transaction)
something important in K that was not in deed, the cause of action is lost
because deed controls after closing. Not enforceable unless deed contains
obligation.
Seller’s Remedies on Breach
1. Expectation Damages (measure is difference between the K price
by Buyer
and the market price)
2. Rescission (seller can sell prop to someone else)
3. Specific Performance*
4. Incidental damages
Buyer’s Remedies on Breach
1. Expectation Damages (measure is the difference between K price
by Seller
and market value on the date of breach)(*if seller breached but
acted in good faith—buyer can only recover out-of-pocket
expenses)
2. Rescission (return payments to buyer can cancels K
3. Specific Performance*
4. Incidental damages
Equitable Conversion and
Maj. Rule: Buyer holds equitable
Min. Rule: Place the risk of loss on
Risk of Loss
title during period between the
the seller until the closing and
execution of k and the closing and
delivery of deed. Material part of
(seller retains legal title to real
delivery of deed. Buyer is
prop must be destroyed
prop during pendency of sales k, responsible for any damage to prop
equitable title passes to the buyer that happens during that period
upon entering the k)
(exception: loss attributed to seller’s
negligent actions or intent). As
holder of legal title, seller has right
to possess the property.
*Buyers and sellers must choose between damages and specific performance—can’t have both remedies
Performance: Marketable Title
*Every land sale k includes an implied covenant of marketable title. Seller must cure defective title before closing at
which point the k and deed merge and the deed controls
*Marketable title is title that is free from an unreasonable risk of litigation
*Examples: Title acquired by adverse possession that hasn’t been quieted; private encumbrance, e.g. mortgage,
covenant, easement, no notification; violation of a zoning ordinance
**Judging whether title is unmarketable, the standard is that of a reasonable buyer
**If seller cannot deliver marketable title, buyer’s remedy is rescission of k
*defects may be waived by buyer in the k of sale or subsequently
*motion against seller—selling interest is converted by the k into an interest in the proceeds of the sale (no longer
an interest in the prop. itself