Leasing Property: Landlord-Tenant Law

AuthorAlan R. Romero
ProfessionProfessor of law and Director of the Rural Law Center at the University of Wyoming College of Law
Pages191-216
Chapter 12
Leasing Property:
Landlord-Tenant Law
In This Chapter
Identifying how leases are different from licenses and easements
Getting to know the types of tenancies
Understanding landlords’ duties to deliver and maintain the premises
Examining the transfer and termination of leaseholds
T
he leasehold may be the most common way that property ownership is
divided up over time. In estates terminology, which I cover in Chapter 9,
the landlord conveys a present estate, known as the leasehold or term of
years, to the tenant and retains a future interest, known as a reversion. When
the leasehold ends, the landlord has the right to take possession of the
premises again.
If that’s all there was to it, landlord-tenant law wouldn’t need its own chapter.
It would just be part of estates. But there’s a lot more to it. The landlord-
tenant relationship has many distinctive rules — some common law rules
that developed over time to govern this unique relationship, some statutory
rules that respond to various perceived deficiencies in the law, and some
rules that are commonly created by contracts between landlords and tenants.
This chapter examines the types of leaseholds that you can create, the rights
and duties of landlords and tenants, and the ways in which a leasehold can
be transferred or terminated.
Distinguishing Leaseholds
from Other Interests
A leasehold is a present estate with the present right of possession. But the
lease agreement that creates the leasehold may limit the tenant’s possessory
192 Part III: Looking at Shared and Divided Property Ownership
rights, and the leasehold itself may not last very long at all. So sometimes
determining whether a person has a leasehold or some lesser, nonpossessory
interest is hard to do. The following sections distinguish such lesser interests
from leaseholds.
Licensing versus leasing
A license is permission to use land. The owner of a theater, for example,
may grant licenses to people to enter the theater to watch a performance.
Landowners also routinely grant licenses to people who deliver things or
make repairs on their land.
A lease differs from a license because a lessee has the right to possess and
control the premises, whereas a licensee merely has the permission to use the
premises. A lessee, therefore, has the right to exclude other people from the
premises; a licensee does not.
Some licenses look very similar to leases. A short-term rental of a vacation
home, for example, may be a lease or a license. The fundamental question is
whether the owner gives the other person the right to possess and control
the premises or whether the owner has retained such control. Sometimes the
parties’ agreement grants some possessory rights and not others, making the
agreement more difficult to characterize.
No one rule distinguishes a lease from a license. Courts just consider all the
facts and decide which type of interest the parties created. Here are some
facts that are often significant in such cases:
Exclusivity: If the grantee of the interest has the exclusive right to
possess the premises during the duration of the interest, it’s a lease;
if the interest isn’t exclusive of others, it’s a license. However, in some
cases, a lease may not be exclusive of the landlord in that the landlord
may retain the right to enter and use the premises for certain purposes.
The more the grantor of the interest has such rights to occupy and use
the premises, the less likely the interest is a lease.
Defined space: A lease must be for a defined space, so if the interest
doesn’t define the space, it’s probably a license.
Duration of interest: The longer the interest lasts, the more likely it is
to be considered a lease. But the duration alone isn’t decisive, because
theoretically you could create a lease that lasts only an hour.
Fungibility of property: If the interest granted isn’t really in a particular
property but rather is in a particular type of experience — such as
seeing a show or having lodging — then it’s more likely to be a license.

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