Class XXIII – Tenants in Default Prof. David Glazier Nov 14, 2006 PropertyProperty

Today’s Class The Law’s leanings: Landlord v. Tenant Tenants in default: - Tenant in possession: -- Berg v. Wiley -- Summary Proceedings - Tenant out of possession: -- Somer v. Kridel

Evolution of Landlord-Tenant Law Lease as conveyance v. contract Balance of interests - Landlord historically favored -- eviction participation as described poetically -- few tenant rights beyond possession - Modern trend toward finding tenant rights -- implied warranties -- controversial in some circles

Berg v. Wiley (Minn. 1978) The Facts: Wiley (L) gave a 5-year restaurant lease in 1970 Lease assigned to Berg (T) in 1971 by her brother T operated restaurant while remodeling in Both L and Dept of Health objected - L set 2-week deadline or said he would retake T dismissed employees/closed restaurant at the deadline L entered premises (w/policeman) and locked T out L re-let premises to another tenant 2 weeks later T sued for damages

Berg v. Wiley The Issue: Jury found T wrongfully evicted - rejected L’s claim T had abandoned premises - awarded damages for lost profits and chattels Two formal issues on appeal: (1)Sufficiency of evidence on abandonment question (2)Legality of self-help repossession

Berg v. Wiley The Law and the Decision: Common law allowed self-help repossession if: (1)L is legally entitled to possession, and (2)L’s means of repossession are peaceable Modern rule bars self-help, only judicial remedy How should court have decided the case? How did the court decide the case?

Self-help Today Many, if not most, states now bar self-help outright - All states have some form of summary procedure - But eviction can still be time-consuming and expensive States permitting self-help differ on “peaceable” - Reasonable force (several states) - No actual violence (advocated by Wiley) - Physical measures only against property - Some effectively prohibit without saying so -- No cut-off of utilities -- No changing of locks De facto majority rule against self help

Landlord’s Guide to Ohio Evictions*** There are two types of evictions a landlord may conduct against his residential tenants in the State of Ohio. One is the lawful process of eviction as set out in Ohio Revised Code Section 1923, and the other is an informal or "self help" eviction, which will get the pants sued off of the landlord if the tenant knows his or her rights. In fact, there is a special statutory section in the Ohio Landlord Tenant Act, Ohio Revised Code Section specifically forbidding not just "self help" evictions, but even threats of "self help" evictions...

California Eviction Law *** Self-help clearly prohibited; landlord can’t: - change locks - remove doors or windows - remove tenant’s personal property - interrupt or terminate utilities Violation lets tenant recover: - actual damages - $100/day during violation ($250 min) - reasonable attorney’s fees

Self-Help: What do you think? Unauthorized self help subjects L to civil damages - Intrusion also likely criminal trespass - Unless state clearly allows, advise clients not to do!

Somer v. Kridel (N.J. 1977) The Facts: Kridel (T) signed 2 year apartment lease w/Somer (L) - T was unemployed student - Rent to be paid by both parents after marriage Engagement was broken off and T could not afford rent Wrote L about situation offering to forfeit 2 mos rent Third party told specific apt. not available L only re-leased apt. 1 year later

Somer v. Kridel (N.J. 1977) The Law/Decision: Common law treated lease as conveyance - T had sole right to possession for duration of lease - L had essentially absolute right to demand rent Modern view to treat lease as a contract - Contract law imposes duty to mitigate losses - Court here holds L must attempt to re-rent - No real concern about inventory

L’s Options if T Abandons Leasehold (1) Do nothing (where still allowed) -Sue for rent as it becomes due (2) Re-let on tenant’s account - Lease treated as remaining in force - L mitigates by seeking new tenant -- T responsible for costs/losses -- T entitled to any rent surplus surrender (3) Treat abandonment as surrender - T released from lease - L gets any rent surplus

Looking Ahead Sample Exam Questions - forthcoming Quiet Enjoyment and Constructive Eviction - Courts create some tenant rights -- Landlord’s Duties pp Reste Realty Corp. v. Cooper pp

Questions?