2023 Lecture OUTLINE 17 - Leases of Real Property

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George Washington University *

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3601

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Law

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Jan 9, 2024

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Leases of Real Property LEASES are, at the same time, both a CONTRACT and a TRANSFER OF TITLE between LANDLORD (LESSOR) and TENANT (LESSEE). The relative balance has changed over time, from TRANSFER to CONTRACT. Leases of real property are still called a TENANCY FOR YEARS. The law governing a particular lease depends on whether the lease is commercial or residential. What is a commercial lease? Office building, coffee shop, etc. If the premisis is going to be used for some business use. Multiple Choice Question Regarding the common characteristics of residential versus commercial leases, a. Parties to a residential lease typically have more equal bargaining position and negotiable terms. b. Parties to a commercial lease typically have more equal bargaining position and negotiable terms. c. Parties to a residential lease typically have more equal bargaining position and nonnegotiable terms. d. Parties to a commercial lease typically have unequal bargaining position and negotiable terms. Residential Commercial The parties tend to have uequal bargaining position. Landlord is at a stronger position. The parties tend to have a more equal bargaining position. The tenant is in the stronger position. Typically non-negotiable. A form lease. Terms are negotiable. Each commercial lease is unique. A term isn’t a standard term. Fungible. Residential elases are like all other residential reases. Are non-fungible. They are each unique. There are many statutory rules to protect the tenant. The leases are governed by the common law of the contract. DC Tenant Bill of Rights Which typically has a longer TERM (the DURATION of the lease)? Commercial leases. There is the presumption that a commercial tenant doesn’t want to move. A residential tenant wants more flexibility of where they live.
page 2 of 4 What if a lease mentions no term or the term has expired? If there is no end date listed of if the term has expired, then it established a periodic tenancy PERIOD-TO-PERIOD LEASE (PERIODIC TENANCY) – THE TIME PERIOD IS DETERMINED BY LOOKING AT THE FREQUENCY THAT RENT IS DUE. Under the common law, period-to-period leases automatically renew for another period unless one party gives the other party A PERIOD IN AN ADVANCE notice. What does it mean to say that parties to a lease must mitigate damages? The nonbreaching party has the responsibility to take steps to minimize losses. Why should the landlord in a commercial lease have less of a duty to mitigate damages than the landlord in a residential lease? This is because comerical leases are not fungiuble. If landlord has to find a new tenant, that is bery hard to do because the new tenant may be very different from the current one. An IMPLIED WARRANTY OF HABITABILITY is implied in all REDIENTIAL leases. Landlord implied promises the property will be "habitable," otherwise tenants can WITHHOLD RENT or use the rent money to MAKE THE REPAIRS THEMSELVES. What must a residential property have to be "habitable?" Have bacis utilities, water, power, electricity, no rodents, doors with locks, fire escapes, safe staircases, smoke alarms, emergency exits, has to be safe Local jurisdiction has a list This implied warranty cannot be WAIVED by the RESIDENTIAL tenant. Landlord’s Liability for Injuries on the Premises Suppose the landlord wants an exculpatory clause in the lease. In which type of lease is it more likely allowed? The landlord is not liable for injuries sutained while the tenant is leasing the building. These are only allowed in commercial real restate because residential leaseses are in an unequal bargaining position, as they sign a form lease. The Case of the Bad Balcony
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