Ownership of real property - Landlord-tenant law

Learning Outcomes

After reading this article, you will be able to identify and distinguish the main types of leasehold estates, understand the key duties and rights of both landlords and tenants, and apply the rules for termination, assignment, subletting, and remedies for breach. You will be able to answer MBE questions on landlord-tenant law with confidence and accuracy.

MBE Syllabus

For MBE, you are required to understand the principles governing the relationship between landlords and tenants. This includes the creation, classification, and termination of leasehold estates, as well as the rights and obligations of both parties. You should be able to:

  • Distinguish between the four main types of leasehold estates: term of years, periodic tenancy, tenancy at will, and tenancy at sufferance.
  • Recognize the requirements for creation and termination of each lease type.
  • Identify the tenant’s duties (pay rent, avoid waste, not use for illegal purposes) and the landlord’s duties (deliver possession, quiet enjoyment, habitability).
  • Analyze the consequences of breach, including eviction, surrender, and abandonment.
  • Understand assignment and subletting, including privity of contract and estate.
  • Apply rules for landlord remedies and tenant defenses.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

  1. Which of the following is NOT a recognized type of leasehold estate?
    1. Tenancy for years
    2. Periodic tenancy
    3. Tenancy at will
    4. Fee simple determinable
  2. If a tenant abandons the premises before the lease term ends, what is the landlord’s duty in most jurisdictions?
    1. Do nothing and collect full rent
    2. Accept surrender and terminate the lease
    3. Mitigate damages by attempting to relet
    4. Immediately evict the tenant
  3. Which of the following is true regarding assignment and subletting?
    1. Assignment relieves the original tenant of all liability
    2. Subletting creates privity of estate between landlord and subtenant
    3. Assignment transfers the entire remaining lease term
    4. Subletting is always prohibited unless expressly allowed

Introduction

Landlord-tenant law governs the legal relationship between the owner of real property (landlord) and a person who occupies it under a lease (tenant). This area is frequently tested on the MBE, focusing on leasehold estates, the rights and duties of each party, and remedies for breach.

Types of Leasehold Estates

There are four main types of leasehold estates:

  1. Tenancy for Years: A lease for a fixed, definite period. No notice is required to terminate.
  2. Periodic Tenancy: A lease that continues for successive intervals (e.g., month-to-month) until proper notice is given.
  3. Tenancy at Will: A lease with no fixed duration, terminable by either party at any time.
  4. Tenancy at Sufferance: Created when a tenant wrongfully holds over after the lease ends.

Key Term: Tenancy for Years
A leasehold estate for a fixed, specified period, ending automatically without notice at the expiration date.

Key Term: Periodic Tenancy
A leasehold estate that continues for successive periods (e.g., month-to-month) until terminated by proper notice.

Key Term: Tenancy at Will
A leasehold estate with no fixed duration, terminable by either party at any time.

Key Term: Tenancy at Sufferance
A temporary estate arising when a tenant remains in possession after the lease ends, pending eviction or creation of a new tenancy.

Creation and Termination

  • Tenancy for Years: Created by express agreement. Must satisfy the Statute of Frauds if longer than one year. Terminates automatically at the end of the term.
  • Periodic Tenancy: Created by express agreement, implication (e.g., rent paid monthly with no end date), or by holdover. Terminated by giving notice equal to the period (e.g., one month for month-to-month), effective at the end of a period.
  • Tenancy at Will: Usually created by express agreement. Terminates by notice or by death of either party.
  • Tenancy at Sufferance: Arises when a tenant holds over. Landlord may evict or accept rent, creating a new tenancy.

Tenant’s Duties

  • Duty to Pay Rent: The primary obligation. If the premises are destroyed without tenant’s fault, the duty is usually suspended.
  • Duty to Avoid Waste: Tenant must not commit voluntary (intentional damage), permissive (neglect), or ameliorative (unauthorized improvements) waste.
  • Duty Not to Use for Illegal Purposes: Occasional illegal acts do not breach the lease, but continuous illegal use may allow termination.

Key Term: Waste
The tenant’s wrongful conduct that damages or substantially alters the leased premises, including voluntary, permissive, or ameliorative acts.

Key Term: Implied Warranty of Habitability
The landlord’s obligation in residential leases to keep premises safe and sanitary for living, regardless of lease terms.

Landlord’s Duties

  • Duty to Deliver Possession: Majority rule requires actual possession at the lease start.
  • Covenant of Quiet Enjoyment: Tenant has the right to use the premises without landlord interference.
  • Implied Warranty of Habitability: In residential leases, landlord must maintain premises fit for human habitation.

Remedies for Breach

  • Tenant Breach: If tenant fails to pay rent or abandons, landlord may evict or sue for damages. In most jurisdictions, landlord must mitigate damages by attempting to relet.
  • Landlord Breach: If landlord breaches habitability or quiet enjoyment, tenant may withhold rent, repair and deduct, or move out (constructive eviction).

Assignment and Subletting

  • Assignment: Tenant transfers entire remaining lease term to another. Assignee is in privity of estate with landlord and liable for rent; original tenant remains liable on the contract unless released.
  • Subletting: Tenant transfers less than the entire lease term. Subtenant pays rent to tenant, not landlord; original tenant remains liable to landlord.

Key Term: Assignment
The transfer by a tenant of the entire remaining lease term to a new tenant, who becomes primarily liable to the landlord for lease obligations.

Key Term: Sublease
The transfer by a tenant of less than the entire remaining lease term to another, with the original tenant retaining some interest and primary liability to the landlord.

Worked Example 1.1

A tenant signs a one-year written lease for an apartment, paying monthly rent. After six months, the tenant moves out and stops paying rent. The landlord advertises the apartment but cannot find a new tenant for three months. Who is liable for the unpaid rent?

Answer: The tenant is liable for rent for the three months the unit was vacant, minus any rent the landlord actually received from a replacement tenant. The landlord must make reasonable efforts to mitigate damages by attempting to relet.

Worked Example 1.2

A tenant transfers the entire remaining eight months of a lease to a new tenant, who pays rent directly to the landlord. After two months, the new tenant stops paying rent. Who can the landlord sue?

Answer: The landlord can sue the assignee (new tenant) for rent as long as the assignee remains in possession (privity of estate). The landlord can also sue the original tenant (privity of contract) unless the landlord expressly released the original tenant.

Exam Warning

If a lease prohibits assignment or subletting, but the landlord knowingly accepts rent from an unauthorized assignee or subtenant, the landlord may be deemed to have waived the restriction for that instance.

Revision Tip

Always distinguish between assignment (entire term) and sublease (less than entire term) on the MBE. Privity of estate and contract determine who is liable for rent.

Key Point Checklist

This article has covered the following key knowledge points:

  • Leasehold estates include tenancy for years, periodic tenancy, tenancy at will, and tenancy at sufferance.
  • Creation and termination rules differ for each lease type; notice requirements are critical.
  • Tenants must pay rent, avoid waste, and not use premises for continuous illegal purposes.
  • Landlords must deliver possession, respect quiet enjoyment, and (in residential leases) maintain habitability.
  • Remedies for breach include eviction, damages, and (for tenants) rent withholding or constructive eviction.
  • Assignment transfers the entire lease term; subletting transfers less than the whole. Liability depends on privity.
  • Restrictions on assignment or subletting may be waived by landlord conduct.

Key Terms and Concepts

  • Tenancy for Years
  • Periodic Tenancy
  • Tenancy at Will
  • Tenancy at Sufferance
  • Waste
  • Implied Warranty of Habitability
  • Assignment
  • Sublease
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