Business Law LAW 242 Terra Community College Winter 2003 Instructor: Kevin Joyce k'joycejoycelaw'com

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Business LawLAW 242Terra Community
CollegeWinter 2003Instructor Kevin
Joycek.joyce_at_joyce-law.com www.terra.edu/academi
cs/distance/law242/joyce.asp
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Real Property Landlord-Tenant RelationsChap.
21, pp. 651-666

• Class 12 March 2003

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Chap. 21 Learning Objectives

• Distinguish among different types of possessory
  ownership interests in real property
• Understand what an easement is
• Discuss how ownership interests in real property
  can be transferred
• Outline rights of landlords tenants concerning
  the possession, use maintenance of leased
  property

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Chap. 21 Learning Objectives

• Possessory ownership interests in real property
• Easement
• Transfer of ownership interests
• Rights of landlords tenants

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Ownership of Real Property

• Ownership interests are classified as either
  Possessory or Non-Possessory
• A Possessory interest such as a fee simple, life
  or leasehold estate, gives the owner a right to
  possess the land.
• A Nonpossessory interest such as an easement,
  profit or license, does not give the owner a
  right to possess the land.

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Ownership of Real Property

• Fee simple absolute
• Fee simple defeasible
• Life estate
• Future interest

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Ownership in Fee Simple

• The Fee Simple (sometimes called fee simple
  absolute) gives the owner the greatest
  aggregation of rights, powers and privileges
  possible under American law and can assigned to
  heirs.
• A conveyance (transfer of real estate) from A
  to B creates a fee simple. A is the Grantor and
  B is the Grantee.
• Fee Simple Defeasible grants conditional
  ownership to Grantee as long as he complies with
  condition. A to B as long as .

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Fee Simple Absolute

• An ownership interest in land in which the owner
  has the greatest possible aggregation of rights,
  privileges and power. Ownership in fee simple
  absolute is limited absolutely to a person and
  his or her heirs.

(654-55)
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Fee Simple Defeasible
(655)

• An ownership interest in real property that can
  be taken away (by the prior grantor) upon the
  occurrence or nonoccurrence of a specified event.
• Ex. 21.1 to A and his heirs as long as the
  land is used for charitable purposes

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Life Estate
(655)

• An interest in land that exists only for the
  duration of the life of some person, usually the
  holder of the estate.

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Life Estates

• Estate that lasts for the life of some specified
  individual. A grants Blackacre to B for Bs
  life grants B a life estate in Blackacre.
• When B dies, Blackacre returns to A or his heirs
  or assigns, or a third party in the same
  condition, normal wear and tear excepted.
• Grantor A retains a future interest in the
  property.
• During Bs life, she can possess, use, and take
  the fruits of the estate, but not take from the
  property itself.

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Future Interest
(656)

• An interest in real property in which the person
  who holds the interest does not currently possess
  the property, but may possess it in the future.

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Future Interests
(656)

• Reversionary interest future interest in
  property retained by original owner
• Remainder future interest in property held by a
  person other than the original owner
• Conveyance to A for life, then to B creates a
  life estate for A a remainder for B
• Executory Interest a future interest held by a
  person other than the grantor, that begins after
  the termination of the preceding estate
• Conveyance to A his heirs, as long as the
  premises are used for charitable purposes, and if
  not so used for charitable purposes, then to B
  creates executory interest in the property for B

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Future Interests

• Reversionary Interest Grantor retains ownership
  interest in land. Land reverts back to Grantor
  if condition fails or when life tenant dies.

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Future Interests

• Remainder Interest Grantor assigns/transfers/sell
  s her future interest to a 3P who now has a
  remainder. When Grantee dies, interest passes to
  3rd Party.

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Chap. 21 Learning Objectives

• Types of possessory ownership interests in real
  property
• Easement
• Transfer of ownership interests
• Rights of landlords tenants

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Easement
(656)

• A nonpossessory right to use anothers property
  in a manner established by either express or
  implied agreement.
• Example the right to travel over anothers
  property
• Test 2
• Which of the following is not covered by the
  statute of frauds?
• A contract for the sale of a new business law
  textbook
• A contract for the sale of land
• A contract for the sale of a new 35,000
  Mercedes-Benz automobile
• A contract for the right to walk across your
  neighbors yard to get to the beach

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Chap. 21 Learning Objectives

• Types of possessory ownership interests in real
  property
• Easement
• Transfer of ownership interests
• Rights of landlords tenants

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Transfer of Ownership

• Ownership in real property can be transferred by
  
• A Written Deed.
• A Gift.
• A Sale.
• An Inheritance.
• Adverse Possession.
• Eminent Domain.

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Deed

• Document by which title (ownership) to real
  property is passed
• Valid deed has 3 elements
• Names of buyer (grantee) seller (grantor)
• Legally sufficient description of the land
• Grantors ( sometimes spouses) signature

(657)
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Deeds

• Warranty deed
• Quitclaim deed
• Recording statutes

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Quitclaim Deed
(657)

• Deed intended to pass any title, interest, or
  claim that the grantor may have in the property
  but not warranting that such title is valid
  provides least protection against defects in
  title.

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Warranty deed

• Deed in which grantor assures grantee that
  grantor has title to the property conveyed in the
  deed, that no encumbrances on the property other
  than as grantor represents, that grantee will
  enjoy quiet possession of property provides
  greatest protection to grantee.
• Ex. 21.3, p. 657

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Recording Statutes
(658)

• Statutes that allow deeds, mortgages, and other
  real property transactions (easements, etc.) to
  be recorded so as to provide notice to future
  purchasers or creditors of an existing claim on
  the property.

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Recording Statutes

• Recording a deed (or any interest in real
  property) puts the public on notice of the new
  owners interest in the land and prevents the
  previous owner from fraudulently conveying the
  same interest to another buyer.

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Chap. 21 Learning Objectives

• Types of possessory ownership interests in real
  property
• Easement
• Transfer of ownership interests
• Rights of landlords tenants

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Leasehold Estates

• Anyone who rents housing to the public for
  commercial purposes subjects herself to various
  state and federal Landlord-Tenant laws.
• Owner of the property is the LESSOR and Tenant is
  LESSEE the contract is called the LEASE. The
  property interest is called a leasehold estate.

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Creating Landlord-Tenant RelationshipForm of the
Lease

• In writing
• Express intent to establish the relationship
• Provide for transfer of propertys possession to
  tenant _at_ beginning of term
• Provide for landlords reversionary interest
  allows owner to retake possession _at_ end
• Describe the property (ex.- street address)
• Indicate length of term, amount of rent and how
  when it is to be paid

(662)
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Landlord-Tenant Rights Duties

• Possession
• landlord obligated to deliver possession
• tenant has right to obtain retain possession
• Use maintenance unless otherwise agreed,
  tenant may make any use of property thats legal
  and reasonably relates to purpose for which
  property ordinarily used
• Implied warranty of habitability implied
  promise by landlord that residential premises fit
  for human habitation
• Rent tenants payment to landlord for occupancy
  or use of landlords real property

(663- )
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Rights and Duties

• Trend in the law is to curtail, by contract and
  real estate law, the immense freedom that
  Landlords had in the past.

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Rights and Duties Possession

• Tenants right to exclusive possession is only
  subject to Landlords limited right to come unto
  the property.
• Tenant has a covenant of quiet enjoyment by
  which Landlord promises Tenants peace and
  enjoyment of the property.

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Eviction
(663)

• Landlords act of depriving a tenant of
  possession of the leased premises.

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Rights and Duties Possession

• Eviction occurs when Landlord
• Deprives Tenant of possession of the leased
  property or
• Interferes with this use or enjoyment of the
  property to the extent that Tenant cannot use or
  enjoy.
• Constructive eviction occurs when Landlord
• Breaches lease or covenant or quiet enjoyment
  and
• Makes it impossible for the Tenant to use and
  enjoy the property.

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Rights and Duties

• Residential property -- Landlord must furnish
  premises in habitable condition.
• Landlord is responsible for maintaining common
  areas such as stairs, parking lots, elevators and
  swimming pools.
• Commercial property -- may still require Tenant
  to maintain depending on the lease.

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Rights and Duties

• Implied Warranty of Habitability applies to
  major (substantial) defects if Landlord knew or
  should have known about he had a reasonable
  time to repair.
• To determine breach, Courts consider
• Whether Tenant caused damage.
• How long defect existed and age of building.
• Defects impact on Tenants safety and health.
• Whether defect contravenes relevant statutes.

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Rent

• Rent is Tenants payment to the Landlord for the
  Tenants occupancy or use of the Landlords real
  property.
• Payment based on agreement, custom, state
  statute, waiver.
• Security Deposits.
• A deposit by Tenant which Landlord may retain for
  non-payment of rent or damage to premises.
• URLTA has specific provisions as to when it may
  be kept and when it must be returned.

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Rights and Duties Liability

• Landlord is liable to Tenants and Licensees
  (Tenants guests) based on who has the right to
  controls the area where the injury occurred.
• Landlord is liable for injuries caused by defects
  in common areas. Attractive nuisance doctrine
  for children and an unfenced swimming pool.

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Rights and Duties Liability

• If Landlord makes any repairs, they must be done
  with reasonable care.
• LL may be liable for injuries caused by crimes or
  third persons when reasonably foreseeable.
• Exculpatory clauses may be unenforceable if
  injury results from violation of statutory duty.

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Rights and Duties Liability

• Tenants Liability?
• Tenant has a duty to maintain safe conditions in
  those areas under her control.
• In commercial leases, both Landlord and Tenant
  may be responsible and liable for same area.

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Chap. 21 Learning Objectives

• Distinguish among different types of possessory
  ownership interests in real property
• Understand what an easement is
• Discuss how ownership interests in real property
  can be transferred
• Outline rights of landlords tenants concerning
  the possession, use maintenance of leased
  property

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(No Transcript)
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Activity 21-3

• http//www.westbuslaw.com/blt/blt6e/essentials/ess
  entials6e.html

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Real Property Problemsp. 680

• 21-1 Tenants Rights
• 21-3 Property Ownership
• 21-4 Deeds
• 21-8 Warranty of Habitability

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21-8 Warranty of Habitability

• Judgment for the landlord
• Only a condition that endangers or impairs health
  or safety causes injury violates warranty of
  habitability
• Condition must be vital to use of leased
  premises because use of stops is optional with
  tenant, even if installed, cant be regarded as
  vital to use of the property

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A fee simple absolute is defined as a. an
interest in land that exists only for the life of
some person.b. a future non-possessory interest
in real property.c. an ownership interest that
can be taken away upon the occurrence or
nonoccurrence of some event.d. an ownership
interest in land in which the owner has the
greatest possible aggregation of rights.
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If Sally gives the San Juan County Historical
Society 12 acres of land to use "so long as it is
used for to further the historical education of
local citizens," what kind of ownership interest
does the Historical Society acquire? a. A
future interest.b. A fee simple absolute
interest.c. A fee simple defeasible interest.d.
A life estate.
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If Ginger gives her mother Betty a right to live
in and use Ginger's beachfront house in Maine
until Betty dies, Betty gets what kind of
ownership interest? a. An easement.b. An
executory interest.c. A defeasible estate.d. A
life estate.
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A valid deed DOES NOT need to include which of
the following? a. The grantor's signature.b. A
description of the town in which the property is
located.c. The name(s) of the buyer(s).d. The
words evidencing an intent to convey property.
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Which type of deed conveys the greatest number of
things and provides a buyer the greatest legal
protection? a. An executory deed.b. A warranty
deed.c. A quitclaim deed.d. A dead-man's deed.
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The purpose behind a recording statute is to
a. provide public notice of claims on
property.b. promote the use of adverse
possession.c. limit the use of wills to transfer
property.d. regulate land use within suburban
locations.
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To ensure the validity of a lease agreement it
must be in writing and do several other things.
Which of the following IS NOT necessary to ensure
a valid lease? a. A description of the
property.b. A provision guaranteeing a tenancy
at sufferance at the end of the lease.c. An
expression of desire to establish a lease
agreement.d. An indication of the length of the
term of the agreement, the rent amount, and when
rent is to be paid.
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Youre the professor! (Again)

• Chapter 5, Criminal Law
• March 12 /or March 17
• 3 sections/3 teams
• pp. 147-156 (Andrea)
• pp. 157-166 (Nicole)
• pp. 167-176 (Chari)
• Each team MUST spend 20-30 minutes presenting
  their section
• Everyone must participate equally in his/her
  teams work not everyone must make a
  presentation
• Each team MUST create 4 true/false /or multiple
  choice questions on their section due March 12
  at beginning of class

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Next Time

• Business Ethics
• Chap. 2

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Youre the professor! (Again)

• Chapter 5, Criminal Law
• March 12 /or March 17
• 3 sections/3 teams
• pp. 147-156 (Andrea)
• pp. 157-166 (Nicole)
• pp. 167-176 (Chari)
• Each team MUST spend 20-30 minutes presenting
  their section
• Everyone must participate equally in his/her
  teams work not everyone must make a
  presentation
• Each team MUST create 4 true/false /or multiple
  choice questions on their section due March 12
  at beginning of class