Class XX – Leasehold Estates Prof. David Glazier Nov 2, 2006 PropertyProperty

Today’s Class The Leasehold Estates - The Term of Years - The Periodic Tenancy - The Tenancy at Will Cases: Garner v. Gerrish - The Tenancy at Will - Leasehold v. Freehold Estate Crechale & Polles v. Smith - Holdover tenants End at 11:40

California Bar Exam Subjects Professional Responsibility Real Property Remedies Torts Trusts Wills and Succession Civil Procedure Community Property Constitutional Law Contracts Corporations Criminal Law/Procedure Evidence State specific law tested Also covered by MBE

Renting v. Owning Leasehold EstateFreehold Estate

The Term of Years Leasehold estate that lasts for fixed period - despite name, may be short or long -- 1 day, 1 month, 1 year, 5 years, etc. - common law had no limits - many states now limit by statute -- Cal limits agricultural land to 51 years -- Cal limits urban land to 99 years Can specify event that will end tenancy - “To T for 25 years or until his death” No termination notice required at lease end

The Periodic Tenancy Fixed duration lease continuing until one side gives notice - “To A from month to month” - “To B from year to year” If term not specified, equals rent frequency Common law notice requirement - 6 mos. for year to year - lease period for any shorter lease -- e.g. 1 month for month to month

Tenancy at Will Continues as long as parties mutually agree - Either party can terminate as desired - Generally 30 days notice required -- or time equal to rent interval - Also ends at death of either party (PT/TOY don’t) Courts may find a Tenancy at Will if: - oral lease where state SOF requires a writing - lease allows one party to terminate (historically)

Garner v. Gerrish (NY 1984) The Facts: Robert Donovan owned house in Potsdam, NY Leased to tenant Lou Gerrish in April details filled in on preprinted lease form -- rent set at $100/month -- Gerrish can terminate at date of his choice -- right of reentry if rent not paid 30 days after due Donovan died in November 1981 Executor David Garner served notice to vacate

Garner v. Gerrish (NY 1984) The Issue: Does lease giving one party right to terminate still create a tenancy at will? - If so estate ended with Donovan’s death - Executor’s order to vacate valid or Did lease create a “life tenancy” - If so Gerrish can remain for his natural life - Fixed payment of $100/month

Garner v. Gerrish (NY 1984) Analysis: The common law - If lessee is at will, lessor must also be -- otherwise would effectively be a life estate -- can’t create a fee w/o livery of seisen Modern law - No reason to be bound by antiquated rules - Intent of contracting parties should govern

Garner v. Gerrish (NY 1984) Decision: What did the court decide? What estate did Gerrish have?

Crechale & Polles v. Smith (Miss 1974) The Facts: C gave S a five year lease ending Feb monthly rent was $1250 S sought month-to-month extension in Dec/Jan C says he said no; S says C said he could stay - C tells S to leave/must pay double rent if holdover S pays rent for Feb-Mar and C cashes check S pays “final” rent (Mar-Apr) but C rejects check - S telegrams that he’s tendering premises

Crechale & Polles v. Smith (Miss 1974) The Sad Saga Continued: After S says he’s out, C declares he’s renewed - asserts S liable for new 5-year term A year later C says pay up or vacate S’s attorney then returns key to C!?

Crechale & Polles v. Smith (Miss 1974) Holdover Tenants: The Law: Landlord has two common law options: (1) treat as trespasser and evict or (2) hold as tenant for a new term [full duration of original lease if < 1 year, additional year if original lease > 1 year]

Crechale & Polles v. Smith (Miss 1974) The Decision: Landlord didn’t exercise either traditional option: (1) Demanding tenant vacate precludes subsequent renewal of lease but (2) Accepting rent and failing to eject creates right of tenant to remain so landlord here creates month-to-month tenancy - S owes rent for actual occupancy and damages

Holdover Tenants: Takeaways Common law: Landlord’s option: evict or hold to new term State statutes: May limit holdover term (e.g., month to month) May provide double rent (e.g., Miss.) Typically address “self-help” Customary Exceptions: Circumstances beyond tenant’s control Ongoing negotiations De minimis holdover

Looking Ahead Next Class – Tue 11/07 pp The Lease - Skim pp *** Discrimination Law - Skim pp *** Delivery of Possession - Read pp Hannan v. Dusch pp Notes 1-3 on pp English v. American rules-your thoughts?? Office hours today: 2:00-3:30

Questions?