1What if T covenants to repair?
- Commercial lease = T liable for ordinary wear and tear, liable for difference in condition
- Residential lease = T could be liable but L will be as well under doctrine of implied warranty of habitability (IWH).
- Structural or casualty destruction may included in an ordinary repair clause. most often it is not.
2If T breaches and abandons possession, L’s three choices – A I R
(1) Accept surrender – this terminates the lease.
(2) Ignore the situation – T remains liable – sue for rent as becomes due. Today only a minority of jurisdictions allow (AR allows).
(3) Repossess and relet
3Remedies for breach in Arkansas– D O R M
- DAMAGES, while paying rent
- OFFSET the cost of reasonable repairs, and make the repairs.
- REDUCE or withhold rent, paying it into the registry of the court to demonstrate good faith.
- MOVE out and terminate the lease, similar to constructive eviction.
4General Rule of Assignments and Subleases
In the absence of a prohibition in the lease, T may freely transfer all of her leasehold interest (an assignment), or part of her leasehold interest (a sublease).
5Rule in Dumpor’s Case:
Granting consent to one assignment or sublease will cause waiver of the right to withhold consent to subsequent transfers, unless L expressly reserves the right to object to future assignments.
Modern trend: Consent to one does not waive right to deny future transfers.
6Six Steps of Summary eviction proceedings in AR - Unlawful Detainer 18-60-304
(1) Grounds - nonpayment of rent, holding over, holding unlawfully after demand in writing (major breach of lease)
(2) L files complaint, sheriff serves
(3) T has five business days to respond
(4) If no timely written objection filed, L gets writ of possession, and sheriff will execute.
(5) If T responds, a hearing, both sides can present evidence.
(6) Jury trial available.
7L are barred from retaliatory eviction tactics such as:
Terminating lease
Raising rent
Reducing services
Usually the protected time is defined (does not last forever).
8When may a provision in the lease prohibiting assigning or subleasing without consent be waived?
If L knows of the transfer and doesn't object (for instance, knowingly accepting rent from an assignee).
9Minority Rule of Assignments and Subleases
A minority of states hold that consent may not be withheld except on a commercially reasonable basis, with respect to commercial leases.
10T has one year remaining on a two-year term of years. T and L are in privity of contract and estate. T transfers all of her interest to T1.
Is this an assignment or sublease?
This is an assignment.
As a result, L and T1 are in: privity of estate. This means that L and T1 are liable to each other for covenants in the original lease that run with the land.
11Common examples of Privity of Estate:
payment of rent,
obligations to pay rent,
and any obligations in the head lease
12Novation
An agreement made between two contracting parties to allow for the substitution of a new party for an existing one.
13Ways to be removed from privity of contract:
Requires a novation: dose not happen if T1 assumes duties in a head lease.
14Sublease or Assignment?
Majority rule: remaining interest, if some remains sublease if none remain arrangement.
AR: intent of the parties as written.
15Sublease or Assignment under Arkansas?
AR: intent of the parties as written.
16Statute of Frauds – five essential elements of a contract:
(1) describe the real estate,
(2) identification of parties,
(3) have words of sale or purchase,
(4) total price,
(5) and in most states, signature of party to be charged.
17Exception to Statute of Frauds Requirement
Part Performance (evidentiary) buyer must have possession, and then either:
(1) paid all or part of the purchase price
(2) make valuable improvements
- Some states also allow recovery on an estoppel theory.
18Marketable Title
Title acceptable to reasonable purchaser and free from litigation.
19Three most important circumstances rendering title unmarketable:
(1) Flaws in title (adverse possession, problems flagged by title search). Seller must be able to provide proof of title by closing.
(2) Encumbrances(refers to all rights a person has in a property. Could be a mortgage or a lien) (unless waived).
(3) Violations of zoning ordinances (not existence but VIOLATION)
20The modern, majority rule for condition of land:
A Seller must disclose latent defects which are known by the sellar and may materially effect the value of the property.
NOT the rule in Arkansas.
21 Benefit of the bargain
- Place the PL in the financial position PL would have been in had the contract been carried out and the sale completed.
- Buyer breach = Seller receives contract price — FMC at time of breach
- Seller breach = Buyer receives FMV at time of breach - K price + "reasonably foreseeable special damages"
22English and American Rule for Damages for unmarketable title
English Rule: Rescission only remedy available to B if S acting in good faith
American Rule: Benefit of the bargain damages available if S in default.
23Under Ark. Code what are a LL's options for a Tenancy at Sufferance:
Ark. Code Ann. 18-17-705
(1) Evict and recover attorney's fees
(2) If a willful holdover, may recover 3 months' rent or double damages, whichever is greater
(3) Or may collect month-to-month rent (18-17-401)
24Dower / Curtesy
AR 28-11-301 Land Generally
If a person dies leaving a surviving spouse and a child or children, the surviving spouse hall be endowed of the third part of all the lands for life whereof
A person shall have a dower
25Implied Warranty of Quality Under Arkansas Law
• Rule: Arkansas -- § 16-56-112
• Statute starts to run when construction "substantially completed."
• Contract suit for damages to real or personal property: 5 years
• Tort or contract suit for personal injury or wrongful death: 4 years
• Exception for defects that are fraudulently concealed.
• Damages: Cost of repair, or difference between value of premises as warranted and actual value.
26Constructive Fraud: Arkansas
(1) Affirmative Misstatements of material fact
(2) No knowledge necessary that statement is not true*
(3) Intent to induce action
(4) Justifiable reliance
(5) Damage suffered.
27"A landlord may be liable under the Fair Housing Act, when
- A LL intentionally discriminates against a tenant based on a protected characteristic; and
- when a LL has actual notice of tenant-on-tenant harassment based on a protected status, but fails to take reasonable steps to prevent the harassment.
28How is a prima facie case under the Fair Housing Act proven?
(1) Disparate-Treatment
• That the defendant had a discriminatory intention or motive.
(2) Disparate-Impact
• That the DF's practices have a disproportionate and negative effect on members of a protected class and aren't justified by a legitimate rationale.
29Once a PL establishes a prima facie case under the FHA, the DF must then what?
The DF must then justify the action as one taken in pursuit of a bona fide, compelling governmental purpose, with no less discriminatory alternative available to achieve the goal, or in the case of private defendants, one taken pursuant to a rational and necessary business purpose.
30 A hostile-housing-environment claim requires a plaintiff to show that:
(1) Endured unwelcome harassment based on protected characteristic;
(2) Harassment was severe or pervasive enough to interfere with the terms, conditions, or privileges of her residency, or in the provision of services or facilities; and
(3) There is a basis for imputing liability to the DF
31Three factors to consider under the totality of the circumstances for a FHA violation:
(1) Frequency of the discriminatory conduct,
(2) Severity,
(3) Whether it's physically threatening or humiliating rather than merely offensive.
32To prove retaliation under the FHA, a PL must show that:
(1) she engaged in protected activity;
(2) she suffered an adverse action;
and
(3) there was a causal connection between the two.