Session 14 Notes

Class notes on landlord remedies, duty to mitigate, and constructive eviction

Property - Session 14 Notes

Landlord Remedies: Self-Help vs. Judicial Process

Berg v. Wiley (Minnesota) - Page 518

Facts:

• November 11, 1970: Wiley executed valid 5-year lease with tenant for restaurant use
• Lease required tenant to bear repair/remodeling costs with prior written authorization from Wiley
• Lease required tenant to operate in lawful and prudent manner
• Wiley retained right to repossess if tenant failed to meet conditions
• Berg took assignment of lease (May 1, 1971) and opened “Family Affair” restaurant
• June 29, 1973: Wiley’s attorney sent letter to Berg alleging breaches, demanding repairs within 2 weeks or Wiley would take possession
• Berg continued remodeling without written consent
• On last day of notice period, Berg closed restaurant for remodeling
• While Berg was absent, Wiley changed locks without Berg’s knowledge

Issue: Can a landlord use self-help to evict a tenant, or must the landlord resort to judicial process?

Common Law Rule:

• Landlord could use self-help without fear of civil liability
• Could physically exclude tenant and pack up their belongings
• Landlord must use no more force than reasonably necessary
• Criminal prosecution was still possible

Modern Rule (Court Adopted):

• Landlord must resort to judicial process
• Must go to court, go through eviction process, and obtain judicial order
• Cannot use self-help to exclude tenant

Reasoning - Why Modern Rule is Better:

1. Forced Entry is Problematic

   • Court interpreted changing locks as forced entry

2. Avoids Physical Altercation

   • If someone invades your home and demands you leave, it could result in physical confrontation
   • Particularly problematic if tenant has children or is in vulnerable situation
   • Constitutes invasion of privacy

3. Due Process Considerations

   • Physical exclusion violates tenant’s procedural due process rights
   • Tenant has right to contest reasons for non-payment in court
   • Tenant may have valid defenses (e.g., sanitary issues, habitability problems, landlord not correcting issues)
   • Landlord’s self-help deprives tenant of opportunity to raise these defenses

Rule: Under modern law, a landlord can never use self-help to exclude a tenant. Landlord must always resort to judicial process.

Application:

• Commercial vs. Residential: Although Berg involved a commercial lease, the court’s reasoning applies to both residential and commercial leases
• Implied warranty of habitability only applies to residential leases, not commercial

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Duty to Mitigate Damages

Sommer v. Kridel (Supreme Court of New Jersey) - Page 528+

Facts:

• Kridel signed 2-year apartment lease but never moved in
• Before lease began, Kridel wrote to landlord (Sommer) explaining his engagement ended and he could no longer afford rent
• Kridel asked to terminate lease
• Landlord refused and kept apartment vacant for 15 months
• Landlord then sued for full rent

Issue: Does a landlord have a duty to mitigate damages when a tenant breaches and abandons the lease?

Historical Context:

• Landlord-tenant law has traditionally been governed by real property law (1977)
• Duty to mitigate is a contracts principle
• Question: Should contract principles apply to real property leases?

Court’s Analysis:

• Although this is real property class dealing with “dirt,” there is a lease agreement
• The lease agreement is analyzed and enforced under contract law
• Breach or violation triggers application of contract law remedies
• Under contract law, there is an obligation to mitigate loss upon breach

Majority Rule - Duty to Mitigate:

• Once tenant breaches, abandons, or stops paying rent, landlord has obligation to use reasonable efforts to locate new tenant
• Failing to use reasonable efforts means landlord cannot collect from breaching tenant
• Landlord cannot just “put their feet up” and do nothing while suing for rent

Application:

• Applies to both commercial and residential leases
• Prior to this case, landlords could keep premises vacant and sue defaulting tenant for back rent

Damages Calculation:

• If landlord finds new tenant at lower rent (e.g., $5,000 vs. original$6,000), landlord can collect $1,000 difference from original tenant
• If landlord uses reasonable efforts but cannot find tenant for 3 months, can collect those 3 months from original tenant
• Landlord must be made whole for losses during reasonable mitigation period

Contractual Provisions:

• Generally, parties can contract around duty to mitigate
• Lease can include provision stating “landlord is under no obligation to mitigate”
• Exception: Cannot contract out of habitability - implied in every residential lease

Qualifying Tenants:

• Landlord must find qualified tenant
• Landlord can maintain reasonable standards (e.g., credit score requirements)
• Must act reasonably - cannot set unreasonable requirements to avoid mitigation duty
• Case-by-case analysis (someone with $100 million but bad credit score vs. someone with 850 credit but low income)

When Statute is Silent:

• Majority view: Duty to mitigate applies
• Minority view: No duty to mitigate unless parties agree

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Quiet Enjoyment and Constructive Eviction

Landlord’s Remedies and Security Devices

• Review page in book independently

Village Commons v. Marion County Prosecutor (Indiana) - Page 545+

Facts:

• Lease agreement 1999-2006
• Prosecutor’s office leased 9,000+ square foot basement for evidence storage and office use
• Rent: $0 to$8,500/month
• Lease required landlord to maintain structure
• Exclusive remedy clause: Tenant could sue for damages or injunction but could not terminate, withhold, or abate rent
• Water intrusion from 2001-2003, multiple leaks
• Landlord repeatedly patched problems but never solved them
• Mold developed; employees experienced coughing, headaches, allergies
• Landlord declined professional mold remediation
• 2002: Pipe burst, destroying boxes of evidence
• Employees told not to use certain rooms
• Tenant vacated in 2003 citing health and safety hazards
• Tenant paid rent through 2003, stopped thereafter
• Landlord sued in 2004 for unpaid rent (~$380,000)
• Tenant counterclaimed asserting constructive eviction

Key Rules:

Actual Eviction (Page 545):

“The general rule is that the tenant will be relieved from any obligation to pay for the rent if the landlord deprives the tenant of possession and beneficial use and enjoyment of any part of the demised premises by actual eviction.”

• After termination, lease and all liability for future rent are extinguished

Constructive Eviction (Page 545):

“If an act or omission by the lessor materially deprives the lessee of the beneficial use or enjoyment of the lease property, the lessee may elect to abandon the property and avoid further obligations under the lease.”

• Abandonment must occur within reasonable time after act or omission

Elements of Constructive Eviction:

1. Substantial Interference

   • Landlord’s act or omission materially deprives tenant of beneficial use and enjoyment
   • In this case:
     • Multiple leaks over extended period
     • Evidence spoiled/damaged (defeats purpose of lease)
     • Mold and health issues
     • Told not to use specific rooms (analogous to landlord saying “don’t use your bathroom”)

2. Notice to Landlord

   • Landlord must be aware of the problems
   • Here: Almost 2 years of constant complaints (2002-2004)
   • Landlord acknowledged by telling tenant not to use certain rooms

3. Tenant Must Vacate

   • Tenant cannot succeed on constructive eviction claim while still on premises
   • Must actually abandon property
   • Here: Office vacated in 2003

Why Not Habitability Claim?

• This was a commercial lease
• Implied warranty of habitability applies only to residential leases
• Therefore, only remedy was constructive eviction

Result: This is a “cookie-cutter” constructive eviction case - all elements satisfied.

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Exam Application Notes

Habitability vs. Constructive Eviction

• Habitability: Residential leases only
• Constructive Eviction: Both commercial and residential
• When analyzing commercial lease problems with health/safety issues, use constructive eviction framework

Landlord Cannot Contract Out of Habitability

• Implied in every residential lease
• Even if 90-page lease says landlord has no responsibility for mold/repairs, provision is unenforceable
• Tenant discovering mold can vacate despite lease terms

Illegal Lease Theory

• If premises cannot legally be rented due to habitability violations (e.g., toxic mold violating housing codes), lease may be illegal
• Tenant’s knowledge may not be relevant factor
• Based on housing code violations, not meeting of minds
• If landlord knows of mold and tenant moves in, potential illegal lease argument

Nuisance and Habitability

• If landlord can control nuisance (e.g., tenant cooking meth in same apartment complex), landlord has duty to address
• Different if nuisance from separate property entirely
• Tenants affected by controllable nuisance can claim uninhabitable premises and vacate

Partial Eviction

• Professor no longer tests on this
• Not necessary to discuss on exam

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Practice Essay Analysis: Question 17 (Fall 2015)

Conveyance Analysis

Initial Grant (1990):

“O conveyed Blackacre by valid deed to Ann and Bob, jointly, with rights of survivorship, for so long as neither Ann nor Bob sells alcoholic beverages on Blackacre, otherwise to Rick.”

Analysis:

1. Joint Tenancy

   • Language: “jointly, with rights of survivorship”
   • “Jointly” indicates intent to create co-tenancy
   • “Rights of survivorship” only exists in joint tenancy
   • Evidences O’s intent to award full ownership to survivor
   • Modern principles apply (not common law requiring “and their heirs”)
   • Four unities no longer required under modern approach

2. Type of Fee

   • Fee simple subject to executory limitation
   • Condition: “for so long as neither Ann nor Bob sells alcoholic beverages”
   • Modern law applies (if conveyance within past 40 years, apply modern law)
   • Note: VCR in facts = modern principles apply

3. Rick’s Interest

   • Executory interest (shifting)
   • In fee simple
   • Duration limited: Only lasts as long as Ann or Bob are alive
   • Specific language: “neither Ann nor Bob sells” (not “alcohol never sold”)
   • When both Ann and Bob die, their heirs take in fee simple absolute with no conditions
   • Rick’s interest cannot outlast Ann and Bob’s lifespans

Rule Against Perpetuities - USRAP Analysis:

Critical Rule for USRAP:

1. First apply common law RAP
2. If valid under common law → Stop (interest is valid)
3. If void under common law → Move to wait-and-see
   • Wait-and-see: Determine if interest actually vests within 90 years
   • If vests, valid; if doesn’t vest, void

Application to Rick’s Interest:

• Put everyone on plane to Hawaii; plane crashes
• Rick’s executory interest cannot continue if Ann and Bob are dead
• Nothing for Rick to take
• Valid under common law RAP
• No need to proceed to wait-and-see

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1991 Conveyance

“In 1991, Ann conveyed her interest in Blackacre by valid deed to Sarah. Ann did not tell Bob about the transfer.”

Analysis:

1. Severance of Joint Tenancy

   • Ann’s conveyance to Sarah severs the joint tenancy
   • No requirement that Ann inform Bob
   • Result: Sarah and Bob become tenants in common with 50% each

2. Rights of Survivorship Lost

   • If Sarah dies, her interest goes to her heirs (not Bob)
   • If Bob dies, his 50% goes to Bob’s heirs (not Sarah)

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1993 Events

“In 1993, Sarah died intestate. Sarah’s only living relative at the time of her death was Tom.”

Analysis:

• Tom succeeds to Sarah’s interest
• Tom and Bob = tenants in common, 50% each
• No need for lengthy tenancy in common discussion (successor simply takes what predecessor had)

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Ouster Issue

“Bob and Rick learned that Ann had conveyed her interest to Sarah. When Tom approached Bob to discuss his interest, Bob refused to speak with Tom. Bob had his lawyer send letter to Tom denying Tom’s interest in Blackacre.”

Analysis - Is This Ouster?

Ouster Requirements:

• Claim of right to exclusive possession
• Must be communicated to co-tenant

Application:

• Bob’s attorney sent letter denying Tom’s interest
• Attorney acts as agent of Bob
• Letter implicitly threatens legal action if Tom doesn’t honor Bob’s claim
• Bob claiming exclusive ownership, denying Tom has any rights
• Likely constitutes ouster

Important Note: Cannot simply write “this is ouster” and move on

• Must analyze whether letter from attorney constitutes ouster
• Discuss agency relationship
• Explain implicit threat of legal consequences
• Show understanding of what makes communication an ouster

Consequences of Ouster:

• If ouster, must discuss rents, profits, accounting obligations

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1994 Breach

“In 1994, Bob opened restaurant on Blackacre. Restaurant sells wine and beer.”

Analysis:

1. Breach of Condition

   • Bob violated “so long as neither Ann nor Bob sells alcoholic beverages”
   • Rick’s executory interest automatically vests
   • Bob’s interest is divested

2. USRAP Wait-and-See (if applicable)

   • If common law voided Rick’s interest, would move to wait-and-see
   • Here, breach occurred in 1994 (4 years after grant)
   • Interest vested within 90 years
   • Would be valid under wait-and-see

Result: Rick owns Blackacre in fee simple absolute

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2015 - Adverse Possession

“It is now 2015. Bob continues to run successful restaurant. Bob has paid all insurance, expenses, and taxes from 1990 to present. Rick and Tom have never taken any action against Bob’s possession.”

Time Period: 1994-2015 = 21 years

Analysis - Bob Adversely Possessing Rick:

1. Actual Possession

   • Bob actually occupying land ✓
   • Running restaurant on property ✓

2. Open and Notorious

   • Restaurant visible to all ✓
   • “Successful” restaurant → even more noticeable and open
   • Paying insurance and taxes → public records
   • Exam Tip: Pick up on details like “successful” to show heightened notoriety

3. Exclusive

   • Bob not sharing land with anyone ✓
   • Warning: Avoid writing “there are no facts to suggest it was shared, therefore exclusive”
   • Instead: Use “because” to show reasoning
   • Grader should not have to infer your argument

4. Continuous

   • Restaurant operation from initial opening to “successful” = prolonged effort over time ✓
   • Constant upkeep and consistency required for success ✓

5. Term of Years - UNKNOWN

   • Statute of limitations not provided in facts
   • Cannot conclude Bob succeeds in adverse possession
   • Can default to common law (20 years) when statute silent
   • Here: 21 years would satisfy common law requirement
   • But since statute unknown, cannot make definitive conclusion

Note on Property Taxes:

• Minority view considers payment of property taxes as element
• Majority view does not require

Bob’s Status After Breach:

• Moment Bob sold alcohol, Bob no longer owned property (Rick did)
• Bob is simply adverse possessor at this point
• No obligation to share restaurant proceeds with Tom or Rick

Ouster Timing:

• Ouster occurred before breach
• But once breach occurred, Bob’s ownership ended
• Adverse possession period begins with breach (1994)

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Additional Concepts Covered

Life Estates and Per Autre Vie

Example: “O to A and B for life, then to A and B’s heirs”

Analysis:

• A and B have joint tenancy in life estate subject to executory limitation
• Joint tenancy lasts for duration of longest remaining survivor
• If A dies, B has life estate subject to executory limitation
• Still subject to Rick’s executory interest in fee

If B conveys to C:

• C has present possessory interest in life estate per autre vie (for the life of B)
• Subject to executory limitation
• C cannot convey more than B’s interest
• C’s interest measured by B’s life

Alternative phrasing:

• Can write: “Present possessory interest in life estate subject to executory limitation, measuring life of B”
• Or: “Life estate per autre vie”
• Both acceptable

Joint Tenancy with Multiple Tenants

Example: A, B, C are joint tenants. C conveys interest to B.

Result:

• B has 66% interest (original 33% + C’s 33%)
• A has 33% interest
• A and B still joint tenants as to B’s original interest
• B’s additional 33% (from C) held as tenant in common
• If B dies: A gets 66% through survivorship of joint tenancy portion
• B’s heirs get 33% (the tenancy in common portion)

Rule in Shelley’s Case

Basic Example: “O to A for life, then to A’s heirs”

Requirements:

1. One instrument (single deed)
2. Conveys life estate to grantee (A)
3. Same instrument conveys future fee interest to grantee’s heirs

Analysis:

• A has life estate
• A’s heirs have contingent remainder (because A is alive)
• Apply Doctrine of Merger
• Merge life estate with remainder
• Operates same as fee simple absolute (redundant to divide them)
• Result: A has fee simple absolute

Can combine with conditions:

“O to A, so long as [condition], otherwise to B for life, then to B’s heirs”

• A has fee simple subject to executory limitation
• B has life estate subject to executory limitation (merges to fee simple absolute per Shelley’s Case)
• Same analysis applies

Application with RAP:

• Apply Shelley’s Case first
• Merge interests
• Then apply RAP
• Results in only one RAP discussion instead of multiple

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Exam Tips and Strategies

Exam Format Information

• Take-home exam
• Three essay questions
• Page limit to be clarified (25 pages per essay vs. 25 pages total)
• Must be double-spaced
• Follow all directions or risk automatic failure
• Use spell check

Professor’s Hints for Final

• “Something from last week” is on final
• “Will drop many hints” throughout remaining classes
• One essay “not bad”
• Two essays “very similar” to each other
• Exam is harder than typical but answers are within course material
• Detailed and technical, but “nothing impossible”
• Multiple call-of-the-question scenarios
• May see facts suggesting issues not being asked

Writing Strategy

• Never write “there are no facts, therefore [conclusion]”
• Always explain reasoning with “because”
• Don’t make grader infer your arguments
• Pick up on details (e.g., “successful” restaurant = more open and notorious)
• Be thorough on take-home exam (no excuse for superficial analysis)
• Consider all angles, argue multiple sides when appropriate

Default Rules

• When statute of limitations unknown for adverse possession: Can default to common law (20 years)
• When jurisdiction unclear: Apply modern law if conveyance within past ~40 years
• VCR in facts = modern principles apply

Topics Emphasized

• USRAP application (apply common law first, then wait-and-see if void)
• Joint tenancy severance
• Ouster analysis
• Constructive eviction elements
• Duty to mitigate
• Shelley’s Case and merger

Topics NOT Tested

• Partial eviction (professor no longer tests)
• Certain technical details will be hinted at in remaining classes

Preparation Recommendations

• Review all essays between now and final
• Saturday review session scheduled
• Focus on technical details and duration of interests
• Practice identifying all interests created in conveyances
• Understand how long each interest lasts