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Class XX – Leasehold

    Prof. David Glazier
       Nov 2, 2006
Today’s Class
The Leasehold Estates
 - The Term of Years
 - The Periodic Tenancy
 - The Tenancy at Will

 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
Civil Procedure          Professional Responsibility
Community Property       Real Property
Constitutional Law       Remedies
Contracts                Torts
Corporations             Trusts
Criminal Law/Procedure   Wills and Succession

  State specific law tested
  Also covered by MBE
Renting v. Owning
Leasehold Estate    Freehold 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
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 1977
  - 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
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)
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)
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 1969
  - 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
  (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
  (2) Accepting rent and failing to eject creates
  right of tenant to remain
 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. 373-87
 The Lease -              Skim pp. 373-376 ***
 Discrimination Law -     Skim pp. 376-383 ***
 Delivery of Possession - Read pp. 384-387
  - Hannan v. Dusch pp. 384-87
  - Notes 1-3 on pp. 387
    -- English v. American rules-your thoughts??

 Office hours today: 2:00-3:30

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