Landlord and Tenant(redirected from Leasehold estate)
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Landlord and Tenant
An association between two individuals arising from an agreement by which one individual occupies the other's real property with permission, subject to a rental fee.
The term landlord refers to a person who owns property and allows another person to use it for a fee. The person using the property is called a tenant. The agreement between a landlord and a tenant is called a lease or rental agreement.
The landlord and tenant relationship has its roots in Feudalism, a system of land use and ownership that flourished in Europe between the tenth and thirteenth centuries. Under feudalism land was owned and controlled by a military or political sovereign ruler. This ruler gave portions of land he or she owned to another person, called a lord. The lord, in turn, could allow another person, called a vassal, to use smaller portions of the lord's land. The vassal pledged allegiance and military or other service to the lord in exchange for the right to live and work on the land.
In 1066, the Normans of France conquered England, and William the Conqueror installed himself as king. King William used the feudal framework of land control to retain political power in faraway lands. Feudalism as a means of political control became obsolete by the fourteenth century, but the hierarchical system of land use and ownership remained.
The contemporary landlord and tenant relationship derives from the relationship between the lord and the vassal. However, today the landlord is the owner of the property—not, like the feudal lord, merely the manager. The tenant is similar to the vassal because the tenant does not own the property but is allowed to use it for a fee.
The landlord and tenant relationship usually refers to a living arrangement. In this respect landlord and tenant law differs from the law regarding leases. In a landlord and tenant relationship, the parties are often referred to as lessor (landlord) and lessee (tenant). Indeed, a lease is a contract that creates the same relationship as exists between a landlord and tenant: the lessor owns property and allows the lessee to use it for a fee. However, the law of leases does not necessarily concern itself with living arrangements. A lease agreement may, for example, relate to the use of a good or service. Because living arrangements are vital to human existence, landlord and tenant relationships are treated differently from lease contracts.
Generally, a landlord and tenant relationship exists if (1) the property owner consents to occupancy of the premises; (2) the tenant acknowledges that the owner has title to the property and a future interest in the property; (3) the owner actually has title to the property; (4) the tenant receives a limited right to use the premises; (5) the owner transfers possession and control of the premises to the tenant; and (6) a contract to rent exists between the parties.
A rental contract may be implied under the law. That is, landlord and tenant law may apply even in the absence of a written and signed rental agreement between the owner of the property and the person living on the property. Whether a court will imply a relationship depends on the facts of the case. The court will look at a number of factors, including the owner's consent to occupancy of the property, the length of the occupancy, and the exchange of monies, goods, or services. A court's finding that a landlord and tenant relationship exists between two or more persons is significant because the law places duties on both parties in such a relationship.
Traditionally, landlord and tenant law was favorable to landlords. Courts resolved disputes between landlords and tenants according to strict contract and property principles, and tenants often were forced to pick up and move without notice or an opportunity to present an argument to a court. Also, landlords had no obligation to maintain the premises, and many tenants were forced to live in uninhabitable conditions.
In the twentieth century, as urban populations increased and workers became more specialized, landlord and tenant law was forced to change. Typical tenants were no longer as handy at making repairs as were tenants in previous years. They worked long hours, they did not have the time to maintain premises, and building designs and utilities were more complex than before. These developments made maintenance a specialized task that could be carried out only by the landlord.
Before the 1960s, landlords were not required to rent out properties that were fit for habitation. Landlords could rent filthy, ratinfested apartments lacking hot water and heat. Although no one was physically forced to live in such an apartment, for many persons it was the only kind they could afford.
In the 1960s and 1970s, states began to enact landlord and tenant laws requiring that domestic rental properties be made fit for their particular purpose. The Implied Warranty of habitability established by statute meant that rental property must have proper plumbing, water, heat, structural integrity, and other basic features necessary for human habitability. These laws required landlords to make domestic rental property habitable even if they did not promise tenants habitable conditions in the rental agreement.
New landlord and tenant statutes further require cities to create housing agencies to enforce the laws governing habitability. These agencies are charged with inspecting domestic rental properties to make sure they meet maintenance standards set forth in statutes and agency regulations. The agencies report to a state agency such as the department of health.
State legislation also governs the financial aspects of the landlord-tenant relationship. Such statutes regulate security deposits, require plain language in rental contracts, require inventory checklists, set rules on damage to rental units, and establish rights and duties upon termination of the rental agreement. In some states some of these laws are set out in court opinions, or case law. However, most landlord and tenant laws are set out in statutes in an attempt to make information about rights and duties accessible and understandable to both parties.
Contemporary landlord and tenant laws vary from state to state. Local lawmaking bodies may enact additional landlord and tenant laws, provided they do not conflict with state laws.
Generally, landlords must deliver the rented premises to the tenant at the beginning of the tenancy, and must disclose to the tenant any potential dangers and defects in the premises. The length of the tenancy should be set out in the rental agreement. If no term is written into the agreement, courts will usually deem the tenancy to be month to month. This means that either party must give the other one month's written notice before terminating the tenancy.
The cost of rent is usually governed by market forces, which means that it is usually dictated by what landlords in a similar area charge. Local laws in some urban areas, such as New York City, provide for rent control. Rent control laws limit the amount of rent that a landlord may charge a tenant. Most rent control laws, however, put limits on the amount that a landlord may increase the rent. A landlord may raise rent during a rental period only with sufficient notice to a tenant. The terms of this notice are usually set forth in statutes or ordinances.
One important issue in landlord and tenant law is the implied Warranty of habitability. If a landlord breaches the warranty of habitability, the landlord may lose the right to collect rent from the tenant, and the tenant may lose a place to live. Mannie Joseph, Inc. v. Stewart, 71 Misc. 2d 160, 335 N.Y.S. 2d 709 (1972), illustrates this process. In Mannie Joseph, a landlord brought suit against a tenant, seeking back rent. The tenant testified in court that the apartment had no heat, no gas for the stove, no hot water, no running water in the kitchen, low water pressure in the bathroom, "ever-present rats and cockroaches," soggy ceilings and walls, broken windowpanes, no superintendent, and a toilet that did not flush. This testimony was supported in court by the housing director of the West Harlem Community Organization and verified in a personal visit by Judge Richard S. Lane, who noted that the oral testimony had not been sufficient to prepare him for what he saw.
Judge Lane found that the landlord had breached the implied warranty of habitability, and refused to order the tenant to make back rent payments. In his opinion Lane wondered why the tenant should have to pay for what she was receiving. He abated, or forgave, the rent and ordered the landlord to pay the tenant's court costs.
Lane could have ordered the landlord to make repairs, but there were not enough people still living in the building to warrant such an order. In fact, the department of health had recently ordered the building vacated, and Lane lamented that the tenant would "soon follow her many former co-tenants out into the streets."
Landlords have additional duties and restrictions under landlord and tenant statutes. Under the implied warranty of Quiet Enjoyment, a landlord must give notice to the tenant and receive permission from the tenant before entering rented premises. This rule does not apply if there is a bona fide emergency, such as a fire or some other danger to the premises.
A concept related to quiet enjoyment is the tenant's right to reasonable use of the premises. Landlords may not substantially interfere with this right. Whether actions by the landlord substantially interfere with a tenant's reasonable use of the premises is determined by the facts of the case. To illustrate, assume that a tenant rents an apartment and works there repairing electronic equipment. The landlord's refusal to allow the tenant to conduct such activity may constitute substantial interference of a reasonable use. If, however, the tenant uses the premises to mix explosive materials, the landlord may have the right to interfere because such a use is unreasonable.
If a landlord is found to have interfered with a tenant's quiet enjoyment or reasonable use of the premises, the tenant may recover damages. The measure of damages varies by jurisdiction. Usually, the tenant will not have to pay rent for the period of interference, and the tenant may seek damages for any losses caused by the interference.
There are several reciprocal duties between landlords and tenants. A landlord must keep the premises in good repair, but the tenant must not damage the premises. The tenant must leave the premises in their original condition, accounting for reasonable wear and tear, or risk losing the security deposit. A security deposit is money deposited by the tenant with the landlord to guarantee the tenant's performance under the lease. If the tenant damages the premises, the landlord may keep the security deposit and sue the tenant for damages not covered by the deposit.
A landlord must give a tenant notice to vacate the premises if the landlord wishes to rent the premises to another tenant. The landlord may not do this during a rental period. For example, if a tenant has signed a lease for one year, the landlord may not force the tenant to move until the end of the year. If the lease period expires and the landlord has not found a new tenant and has not issued a new lease to the present tenant, the present tenant may be allowed to stay on the premises on a month-to-month basis.
If the tenant plans to move during a rental period, the tenant must give at least a one-month written notice to the landlord. If the tenant fails to give notice to the landlord and leaves the premises, the tenant may be responsible for future rental payments. However, in this situation, the landlord is under a duty to take reasonable steps to find another tenant. This is called the duty to mitigate damages. Once the landlord finds another tenant, or the original lease expires, the tenant's duty to pay expires.
If the lease period expires and the landlord has found a new tenant, but the present tenant refuses to leave the premises, the landlord may sue the present tenant for damages if the landlord could be charging the new tenant more rent. The landlord may also have the tenant evicted by filing suit in court. Such a suit is called a wrongful or Unlawful Detainer. Unlawful detainers are governed by statute and may be based on damage to the property, nonpayment of rent, or unforeseen changes in the economic conditions of the landlord.
All states provide for unlawful detainer hearings. These proceedings help landlords avoid financial loss. Depending on the statute, a court will schedule an unlawful detainer hearing from one to three weeks after the landlord files suit. In most states the hearing is limited to issues concerning the tenant's and landlord's rights and duties. The majority of states prohibit landlords from removing a tenant's Personal Property from the premises until after the court orders an eviction.
A tenant may avoid eviction for nonpayment of rent by paying the past due rent along with any filing costs incurred by the landlord. If the tenant is unable to pay rent before the court date, the tenant can still present defenses to the eviction in court. For example, the tenant may argue that the rent is not due because the landlord failed to make necessary repairs. If the tenant is unable to defend successfully the failure to pay rent, the court will order the tenant to vacate the premises by a certain date in the near future. In order to collect the unpaid rent, the landlord usually must file a separate action against the tenant.
Sometimes the action or inaction of a landlord may constitute a constructive eviction. A constructive eviction occurs when the landlord has made living on the premises unbearable or impossible. For example, assume that a landlord has refused to provide heat to rented premises. This constitutes a constructive eviction, and the tenant is not liable for rent.
The law of eviction differs for tenants in public housing. Public housing is low-cost housing provided by the federal government to impoverished persons. Under the National Public Housing Asset Forfeiture Project (28 U.S.C.A. § 881(a)(7)), the Housing and Urban Development Department and the Justice Department may evict persons from public housing without notice and without a hearing, under exigent circumstances—that is, when the eviction is directly necessary to secure an important government or public interest, and there is a special need for prompt action. An eviction from public housing can be initiated only by the proper government authorities.Whether exigent circumstances exist to justify eviction without notice and a hearing depends on the facts of the case. The mere use or possession of illegal narcotics, for example, does not warrant summary eviction. However, if an apartment in a public housing project is being used for constant, high-level drug dealing, such activity may constitute exigent circumstances (Richmond Tenants Organization v. Kemp, 956 F.2d 1300 [4th Cir. 1992]). Although public housing tenants have increased eviction risks, the additional eviction procedures that must be followed by governments make eviction of public housing tenants a longer, more complicated process than eviction of private tenants.
The Supreme Court in Department of Housing and Urban Development (HUD) v. Rucker 535 U. S. 125, 122 S. Ct. 1230, 152 L. Ed. 2d 258 (2002), upheld the Anti-Drug Abuse Act of 1988 to address the problem of drug-related criminal activity in federally subsidized public housing. The act mandated that every local public housing agency insert a clause in its standard lease document that gives the agency the right to evict tenants if they use or tolerate the use of illegal drugs on or near their premises.
A tenant may give his or her rights as a tenant to another person. This is called an assignment, and it is permissible unless the landlord objects or unless it is prohibited in the rental agreement. If a tenant assigns his or her rights, the tenant is still responsible for the payment of rent. In essence the recipient of the rental rights, or assignee, is a tenant of the original tenant, and there is no legal relationship between the assignee and the landlord.
Courts often examine lease agreements for unconscionability. Unconscionable agreements are ones that unduly favor one party over the other. For example, assume that a rental agreement calls for the payment of damages to the landlord if the tenant leaves the apartment without sufficient notice. If the court considers the amount of damages to be too high, it may reduce the damages owed to the landlord.
Some lease agreements allow either party to break the agreement, and specify an amount of damages that the breaching party must pay to the other in the event of breach. Landlord-tenant relationships governed by such agreements are called tenancies at sufferance. Courts usually examine these agreements to ensure that they are not unconscionable.
In many cities tenant organizations operate to protect the interests of tenants. These organizations offer information and services to tenants. Most tenant groups offer information and services to nonmembers for a fee based on the tenant's ability to pay and the amount of work necessary to resolve the tenant's rental issues. Most states have statutes that prohibit landlords from evicting a tenant based on the tenant's membership or participation in a tenant organization.
Landlords are under no obligation to rent to tenants. However, under the Fair Housing Act of 1968 (42 U.S.C.A. §§ 3601–3619 [1988 & Supp. III 1991]), they may not refuse to rent based on race, color, religion, sex, handicap, familial status, or national origin.
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Brennan, Gabrial, ed. 2002. Landlord and Tenant Law. 2d ed. Oxford, New York: Oxford Univ. Press.
Federlein, Walter J. 1996. "1995 PA 79: An Affirmative Act for Senior Citizen Tenants." Michigan Bar Journal 75.
Gerchick, Randy G. 1994. "No Easy Way Out: Making the Summary Eviction Process a Fairer and More Efficient Alternative to Landlord Self-Help." University of California at Los Angeles Law Review 41.
Kelley, Robert H. 1995. "Any Reports of the Death of the Property Law Paradigm for Leases Have Been Greatly Exaggerated." Wayne Law Review 41.
Korona, Raymond I. 2001. Landlord and Tenant Law. 5th ed. St. Paul, Minn.: West Group.
Kurtzberg, Joel, and Jamie Henikoff. 1997. "Freeing the Parties from the Law: Designing an Interest and Rights Focused Model of Landlord/Tenant Mediation. Journal of Dispute Resolution 1997 (spring): 53–118.
McCurley, Robert L., Jr. 2002. "Landlord-Tenant Act. The Alabama Lawyer 63 (November): 348–49.