University of Georgia Terry College of Business LS 470 - Business Law I Dr. B-A's Word Outlines LEASES & BAILMENTS 1. License rt to use land of another for specific purpose not an int in land personal, not assignable to others 2. Lease transf of possn of RE fr landlord to tenant for rent landlord (LL) - lessor tenant (T) - lessee may be oral or written, tho subject to SF may be express or implied Tenancy amount of time lease is for A. for a stated period tenancy for certain time period, i.e., 5 years must be in writing under SF if over a year terminates w/o notice at end of period stated not terminated by death of either during period not term by destructn of improvmts during period, UOA if only lease of improvemts & improvmts destroyed K dschgd bec of impossbty B. from period to period fr one date to another, i.e., fr 1/188 to 12/21/88 may arise fr holdover T if w/LL consent T doesn't leave after stated period expires may continue to treat as T becomes tencancy fr per to per, not to exceed yr (SF lim) rent is same as in orig lease if not w/LL consent LL may evict T as trespasser lease fr yr to yr or mo to mo only term if proper notice given proper time for notice gen set by stat mo to mo gen 30 days notice reqd yr to yr gen 60-90 days notice req farms gen have diff time reqs bec of planting crops gen notice due on rent day C. at will no fixed period for tenancy term by either upon giving nec statutory notice a few states don't req notice if legal actn nec for possn, time will be imposed D. at sufferance T holds over w/o LL consent can stay till LL evicts or allows it 2. Tenants' Rts & Duties A. Rts & duties of lease determined by the agmt & stat gen T entitled to exclusv rt to possn & control LL has no rt on premises except to collect rent if lease reserves rt for LL to inspect, can do so if T abandons, LL may retake possessn to protect prop B. T has no duty to make improvmts or substantl repairs, UOA must make minor repairs, i.e, broken window if T has duty to repair, incls substantl repairs gen doesn't req replacemt of destroyed structure C. gen in comm lease, tent has rt to remove trade fixtures installed during lease gen fixtures become pt of RE & belong to RE owner not so w/trade fixtures rt of removal terminates w/lease unremoved trade fixtures become RE owner's prop D. rt to pay rent subj to setoffs for vios by LL rent duty released upon evictn actual evictn LL removes T's belongings fr premises constructive evictn LL does act makes it virtually impossbl for T to stay failure to move waives rt to constru evic T must still pay rent stat may provide otherwise some jurs give T rt to w/hold rent where premises in disrepair E. T may gen assign or sublet w/o LL consent if lease prohibs assmt, gen can still sublease if lease says T must have LL's approval, LL gen can't arbitrarily w/hold it assmt transfers lease to assingee gen for entire remaining lease period assignee becomes liab for rent assignor remains liab also sublease creates new leasehold estate gen only for pt of lease period sublessee liab to T for rent T liab to LL 3. Landlord Rts & Duties a. rt to collect rent in many jurs LL has lien on T's pers prop for unpd rent applies only to pers prop on leased premises called distress for rent b. LL has rt to have T vacate after tenancy period if lawful terminatn, LL's rt to possn is absolute LL can't discrim on basis of race, sex, relig, nat origin or color gen LL's motive for lawful terminatn is irrelevant c. T has duty to redeliver prem in same cond as rec'd ord wear & tear is ok if premises injured, LL may recover fr T or 3d pty T may not make material changes or improvmts w/o LL consent d. If T vacates B4 lease up, LL's rts depnd on state law some-LL need not seek new T--responsbty rests w/T modern view-LL must mitigate T's dams or T's liabty eliminated e. Security deposits state laws req LL to itemize repairs - gen in writing pay int on deposit return deposit promptly not use dep to pay for normal wear & tear repairs T can gen collect atty fees if must sue LL for dep T gen not permitted to use last mo's rent as setoff agnst deposit f. Gen an implied warr of habitability for leases to det what defects const br of warr, must consider vio of applicable housing bldg or sanitary code or regs whe defect affects vital facility i.e., house vs. pool potentl or actual effect upon safety & sanitatn whe T was responsbl for defect br of warr may allow T to terminate lease use as a defense to actn for rent use as a basis for reduced rent B. LL's duty to a. gen LL makes no warr that prem is safe or suitable for intended use by T gen 3d pties are on premises at their own peril LL has no greater duty to T's guest than to T LL has duty to give notice of latent defects he knows of some states req same for defects LL shd know of in exercise of ordinary care public use except-where LL knows prms 2B used for bus LL owes higher duty to bus prms T than to private prms T b. if LL undertakes to care 4 commn area has duty to inspect repair maintain c. LL gen has duty to remove ice & snow fr prms must do so w/ord care must take into acct dangerous conds caused by subseq freezing & thawing of ice & snow placed near walkways C. Uniform Residentail LL & T Act Wd make LL & T laws uniform adopted by at least 17 states Ga hasn't assures equal bargaining power betw LL & T LL can't collect sec deposit equal to more than 1 mo rent LL liab for dbl dep + atty fees if w/held w/o justifcatn LL must deliv possessn at beg of lease term LL must maintain prems in habitbl cond T must pay rent keep dwelling safe & clean allow LL to enter for periodic inspectn, repairs, improvmts, emergs cooperate in showing prems to potential Bs or Ts T may make minor repairs & deduct cost fr rent T must notify LL of defect LL must fail to respond to reasbl time minor defect is less than $100 or 1/2 the rent whichever greater distress for rent abolished if T holds over, LL can sue for possn + 3x actual dam or 3 mos rent greater of two II. Bailments possession of gds is temporarily transferred to another may be for loan repair storage rent owner - bailor one possession transferred to - bailee reqs possessn & temporary control by bailee retention of title by bailor ultimate possessn reverts to bailor or his designee 1. Types (3) a. bailmts for benefit of bailor Ex-bailor gives prop to bailee for safekeeping, w/o fee to bailee b'ee reqd to exercise slight care b. bailmts for benefit of bailee Ex-bailor loans prop to bailee, w/o fee to bailor B'or has duty to notify B'ee of known defects if no notice, B'or liab to anyone who may be expected to use gd as result of bmt i.e., employee's & family of bailee b'ee reqd to exercise extraordinary care C. bailmts for mutual benefit Ex-bailor takes car to shop for repair bailor to rec repair services bailee to rec compensatn for services rendered to prop not nec that bailee rec comp in $ or tangible prop if lease, prop must be reasbly fit for intended purp bailor must notify bailee of all defect which B'or may reasby be aware of if B'ee not notified, B'or responsible for B'ee dam suffered as result same if B'or didn't know of defect, but shdv by exercise of reasbl diligence b'ee req'd to exercise ordinary care i.e, care the average person exercises over her own prop if propr care used by b'ee, any loss falls on b'or dams assesed agnst b'ee based on retail replacmt value more care reqd for expensive or delicate items bailee must return prop to bailor undamaged if damaged, prima facie case of neg B'or can recover fr B'ee if presumptn rebutted, B'or can't recover exculpatory clauses bailee attempts to disclaim liability for dam to prop in his possn can't be done by quasi-public instit bec agnst pub policy quasi-pub instits are businesses fr which we get everyday necessities cts prefer cls which seek to lim, not elim liab UCC storage agmt or warehse receipts may limit amt of liab for loss or dam can't disclaim duty of reasbl care