Tenant's Legal Rights & Remedies Leasing Commercial Space for Hair Salon, Exams of Property Law

Download Tenant's Legal Rights & Remedies Leasing Commercial Space for Hair Salon and more Exams Property Law in PDF only on Docsity! EXAM#_______________ Page 1 of 3 K. STANLEY/LAW 715A/PROPERTY I/FALL 2008 PART II -- ESSAY QUESTION 1 (80 points total -- Suggested time: 60 minutes) In a written and legally binding agreement, Tenant leased from Landlord 1500 square feet of commercial space in a strip mall located in City. The lease provided for an annual rental of $24,000 for the space, which Tenant could pay to Landlord in monthly installments of $2,000 on the 1st day of each month. The lease commenced on April 1, 2006 and ended on March 30, 2008, and contained a standard paragraph which provided that Tenant could not sublet or assign the leased premises without Landlord’s written permission. After installing new stylist stations and other improvements (costing around $10,000), Tenant opened a hair salon, which was a new business venture for him. A few months later, Tenant was approached by his friend, Fingers, a reputable masseuse, about using some of the salon space to provide spa services to her long list of customers. Believing this to be a great idea, Tenant converted an unused back room of the salon into a tranquil room where Fingers could give massages, facials, and other beauty treatments. Fingers regularly paid Tenant $500 a month plus 20% of her monthly gross receipts for the use of the back room. Both businesses became very successful. In February 2008, after receiving a small inheritance, Tenant decided to take an extended vacation. “No worries,” said Fingers, “I will keep an eye on the place for you.” After all, thought Tenant, he had been working hard for nearly two years and all of the stylists he employed had regular customers providing him a steady income. He also felt confident that Fingers could manage the business while he was away. Tenant gave Fingers control over the salon’s bank account so that Fingers could pay rent and other expenses while she was on vacation. And Fingers did so faithfully for the first few months – for the months of March and August 2008 she paid Tenant’s monthly $2,000 rent to Landlord out of the salon’s bank account. After April, though, Fingers stopped depositing her $500 rent to the salon account because she was doing so much extra work as the salon manager. No one could have foreseen the devastation caused by Hurricane Hubert, which blew through City on August 15, 2008. Although Landlord’s strip mall was pretty much spared any damage (the glass storefront had broken, but nothing else), the storm caused a loss of power and disruption of phone and Internet lines throughout City. City services such as sanitation, police, fire, and health services were down for nearly 3 months. City seemed to resemble a ghost town, as nearly half of its residents moved away. Fingers, whose home was destroyed by the hurricane, received a large insurance settlement and moved to the Caribbean, abandoning the salon. Tenant returned to City in November 2008 to find the salon boarded up, the fixtures either stolen or destroyed, and an apologetic note from Fingers taped to his chair. To Tenant’s surprise, several other businesses in the strip mall were still open and functioning. When Tenant contacted Landlord, he discovered that the last time his rent had been paid was on August 1, 2008. Fingers had not paid her rent to Tenant since April 1, 2008. “The whole thing is a mess,” bemoaned Tenant to you, his lawyer. City is in a jurisdiction that follows the statutes contained in the Statutory Supplement. In light of these developments, Tenant wants you to describe his legal responsibilities, rights, and remedies with respect to the lease of the salon. Do not advise him on contract, tort or other legalities. EXAM#_______________ Page 2 of 3 K. STANLEY/LAW 715A/PROPERTY I/FALL 2008 ESSAY QUESTION 2 (80 points -- Suggested time: 60 minutes) Doc and Architect are married and own as community property a large multi-million dollar estate (the “Estate”) in an exclusive gated community of new homes known as The Woods. The Woods had previously been raw, undeveloped land in a beautiful and remote open space area, used by the public for all types of nature activities. The open space land was owned by Equestrian (known in the area as “Old E”). In order to protect his rights to the property, Old E posted signs at various locations in the open space which stated “Right to pass by permission, and subject to control, of owner” as provided by statutory law. In 2005, Old E sold some of the open space to a development company which built The Woods residential community and sold the Estate to Doc and Architect, and 14 homes to other buyers. Adjacent to The Woods were two large parcels of land (let’s just call them Parcel A and Parcel B) which Old E also owned. For at least the last 25 years, Old E maintained a stable, riding rink, and a barn on Parcel A and operated a horse boarding facility there for as many as 20 horses (he boarded his own horse there, too). Parcel B remained vacant. Old E daily rode his horse from Parcel A out to the open space trails. Old E always rode from Parcel A down a ridge to the open space; that ridge ultimately was graded and paved and became the half-mile driveway up to the Estate. Even though Doc and Architect had purchased the Estate, Old E continued to ride his horses down the driveway to access the open space trails. While Doc didn’t really mind, this really bugged Architect. Often they would see Old E on his horse as they were leaving or returning home; Doc would waive neighborly to him but Architect would grumble about the odorous droppings on the driveway and the injustice of Old E “just using our property without even asking!” Occasionally, they would see other horse riders using the driveway to get to and from Parcel A, and this really infuriated Architect. Architect wanted to post a sign saying “NO HORSES” or put up some kind of fence or barricade to keep them from riding down the driveway, but Doc’s more hospitable nature prevailed so they did nothing. Six years passed, and Old E died leaving all of his property to his son, Son E. Son E then built a large ranch-style home on Parcel B, and enlarged the stable and other facilities on Parcel A to accommodate up to 100 horses. To accommodate his new home and the additional stable patrons, Son E built a 2-lane paved and lighted driveway from Parcel B through and across Parcel A and finally connecting to the Estate’s driveway. This was the final straw – Architect brought a lawsuit against Son E for trespass and for an injunction barring Son E’s use of the Estate’s driveway for any purpose. As the judge hearing the lawsuit, draft a written option deciding the case. Don’t restate the facts, but be sure to explain (1) the issue(s), (2) the parties’ arguments, (3) the relevant law, and (4) apply the facts to the law to support your legal conclusion(s) and decision.