Leasehold

“ It has, accordingly, been solemnly proposed in the Legislature of New York, that the statute of descents should be so far altered, that when a landlord, holding lands subject to certain leasehold tenures, dies, or a descent is cast, that it shall be lawful for the tenants, on application to the chancellor, to convert these leasehold tenures into mortgages, and to obtain the fee-simple of the estates in payment of the debt! In other words, A leases a farm to B forever, reserving a ground-rent, with covenants of re-entry, etc., etc. ”

“ The result appears in almost every acre of the soil, in almost every building on the land; but the bad influence of leasehold tenure is most evident in metropolitan and urban buildings, and on those who are in any way connected with them, whether freeholders of building land and their lessees, or builders, tenants, occupiers, we may even add beholders of our modern leasehold houses. ”

“ There are many other evils connected with the leasehold system, and one is the immense development it gives to the speculative builder and to the army of money-lenders and lawyers who are necessary to his existence. In the part of London where I live the ground-landlord gave building leases to a speculative builder, who, to raise capital for his operations, mortgaged each house before it was completed to a money-lending company, and subsequently gave second charges upon them to a Bank for further advances. ”

“ A salient element in such a reorganization is the discharge of all demands of whatsoever sort, executory and contingent, presently due or to mature in the future. Of such claims not the least important are those for rent to accrue under a lease, or for damages or indemnity payable because of the termination of a leasehold. ”

“ They are then called 'rookeries.' Thus in every period of its course, in its preparation and its consequences, leasehold tenure is a noxious system, and the transmutation of the freehold is in every way an injury to the proprietor.
But building speculators are, like leasing freeholders, the victims and results, if they are also agents, of the leasehold system. These poor men are seldom destitute of merit; they are probably indifferent workmen, who, by force of character and exceptional capacity for supervision and control, have been advanced in their own sphere to some position of command. ”

“ The profession will not grudge so politic and generous a change, but, on consideration, will most gladly welcome it. Although their business costs on leasehold property are large, the gain is not a recompense for the discredit, wholly undeserved, and for the purposeless responsibility which 'lease-hold' lawyers and conveyancers continually suffer. ”

“ Houses are built in flimsy fashion upon the express idea that they are intended to last only the specified term; and during the expiring years of the lease, repairs are grudged, and the dwellings rendered unhealthy to the occupier and unsafe to the passers-by. If a man has a house which is erected upon [Pg 114] leasehold land, and therein builds up, by his own skill and industry, a good business, he is absolutely at the mercy of the ground landlord when the lease expires. ”

“ If he elect to adopt a lease, the receiver becomes vested with the title to the leasehold interest, and a privity of estate is thereby created between the lessor and the receiver, by which the latter beocmes liable upon the covenant to pay rent. ”

“ All this is hopeful and judicious; it appears that other things than communism may be even less agreeable to contemplate; besides, it is allowed to be 'notorious all over England that no cottages are so bad as those that are cheaply run up,' — on leasehold tenure? — 'either to live in or to let, by persons of the labouring grade.' To save discussion we accept the statement, and reply that as the leasehold system has extended and is nearly universal, its bad influence has brought and keeps the standard of house-building miserably low. ”

“ The greater part of the land in this section was comprised in vast estates such as the Rensselaerswyck, Livingston, Scarsdale, Philipse, Pelham and Van Cortlandt manors, and on these the leasehold system, with perpetual leases, and leases for 99 years (or the equivalent) , had become [51] general. Besides rents, many of the tenants were required to render certain services to the proprietor, and in case a tenant sold his interest in a farm to some one else he was required to pay the proprietor one-tenth to one-third of the amount received, as an alienation fee. ”

“ This leasehold portion was divided into four lots fronting on F street, and each running back from F street 100 feet in depth, and he had a separate lease and contract for privilege of purchase on each,-the rent of each being $60 per month, amounting to $2,880 per annum for all four lots; and the purchase prices, at which he had the privilege of purchasing the lots, were, respectively, $8,000, $12,000, $12,000, and $10,000, the whole amounting to $42,000. ”

“ The owner grants a lease for a long period of time, usually ninety-nine years, for a ground rent, which is notoriously below the true economic rent of the land, subject to the condition that the leaseholder must erect upon the land and keep in good repair certain buildings, which on expiry of the lease will become the property of the ground owner. ”

“ The periodical leases, renewable after fifteen years, seem to be considered by most as of little value; they afford no security for fixed property in the soil, as a grant on one of these leases is liable to be resumed by government, ‘with all buildings thereon,’ should the leaseholder or his heirs not choose to comply with the terms of the new lease. ”

“ By this Act leases are allowed to be broken by the tenant, but not by the landlord. All leaseholders whose leases would expire within ninety-nine years after the passing of the Act have the option of going into court and getting their contracts broken and a judicial rent fixed. No equivalent power is given to the landlords. ”

“ Normally he is a leaseholder, sometimes for life, more usually for a period of years ranging from twenty-one to eighty. Again the lessee’s interest may be more or less inclusive. Sometimes only the demesne, including any customary works upon it of the tenants which may survive, is leased. Sometimes the lease includes the live-stock of the manor, which, or the equivalent of which, the farmer must replace at the end of his term. Sometimes the profits of the court are leased as well, though more usually they are reserved, together with any income from fines, to the lord. ”

“ He said that, if I preferred to change the sald into a lease of the property, perhaps we could make a new negotiation, and he made this proposition: that he and his associates, Mr. Mattingly and Mr. Prentiss, would take the property on a ten years' lease; would pay the purchase money under the four leases; would pay the incumbrances of record, amounting to $35,000; would pay me $600 a month during the term of the lease; pay all the taxes that might be assessed on the fee-simple property and leasehold estates ”

“ V. For the purposes of these cases, it is immaterial whether the Government actually took the leaseholds of the tenants in addition to taking the temporary use of the fee or only destroyed the tenants' right of occupancy. If any property is taken, compensation is required. ”

“ As the hitherto existing system by which purchasers of Crown leaseholds have been able to evade their building obligations has led to a considerable area of land in and near the City remaining vacant, directions have been given that, in the future, no purchaser of a Crown allotment shall receive his lease until he shall have complied with the Conditions of the Sale, and expended the specified sum upon proper tenements. ”

“ For all these unfairnesses to individuals, hindrances to trade, and injuries to the community, is proposed the remedy stated—that a leaseholder who has twenty (or, as some suggest, ten or fifteen) years to run, shall be empowered to demand that his land be made freehold upon the payment of its value, as assessed by some specified tribunal. ”

“ Clearly the property of the landlord; for in consideration of their being made, improved, kept up, and given up by the tenant at the end of the term, the landlord gave to the latter a lease of the premises for 31 years, at a proportionate rent.
We have taken some pains to prove this, not for the sake of being hard upon tenants in any way, but merely to show, that supposing past "improvements," which are not "improvements," will have in future to be destroyed, those who have made them agreeably to the conditions of such leases have no just claims respecting them. ”

“ A landlord leases his sites in the first instance to builders, for periods of great length. When the building leases fall in, and the houses become the landlord's direct property, it is almost invariably an object with him to lease them for periods, shorter indeed than the original building lease, but always of considerable length. As long as houses are in the hands of a building lessee, or his representatives, the ground landlord can derive no profit from them beyond the rent reserved in the lease, and can exercise no control over them outside the covenants contained in that document. ”

“ Whether a particular instrument is a lease, or an agreement for a lease, or a bare licence, is a question the answer to which depends to a large extent on the circumstances of individual cases; and the only general rule is that in a lease there must be an expression of intention on the part of the lessor to convey, and of the lessee to accept, the exclusive possession of the thing let for the prescribed term and on the prescribed conditions. The landlord must not part with the whole of his interest, since, if he does so, the instrument is not a lease but an assignment. ”

“ Enough appears in the terms of the instrument called the lease to show that both the lessee and lessors treated the buildings 'during the process of erection' as the property of the plaintiffs, and to show beyond controversy that the buildings when completed vested in the plaintiffs as their absolute property, subject only to the right of the builder to occupy and use the same, just as in the ordinary case where the owners of property agree to lease the same to be used by the lessee for a stipulated rent. ”

“ Is it essential that a lease should be of less duration than the right which is subject to it? This is almost invariably the case; land is leased for a term of years or for life, but not in perpetuity; the owner of a thing owns it for ever, but the lessee of it possesses it for a time. We may be tempted, therefore, to regard this difference of duration as essential, and to define a lease as a right to the temporary exercise of a right vested in some one else. ”

“ That lease provides that, if the premises shall become vacant or the term shall end prior to the expiration date because of any act of the tenant, the landlord may re-enter, relet the premises, and apply the rents received on the reletting to the payments of rents due under the lease, and that the tenant shall not be entitled to any surplus, but shall remain liable for any deficiency which, at the option of the landlord, shall become payable on demand or as it accrues from month to month. ”

“ Why, these leases are perpetual, and the tenant cannot be dispossessed. The longer a lease is, other things being equal, the better it is for the tenant, all the world over. Let us suppose two farms, the one leased for five years, and the other forever. Which tenant is most independent of the political influence of his landlord, to say nothing of the impossibility of controlling votes in this way in America, from a variety of causes? Certainly he who has a lease forever. He is just as independent of his landlord as his landlord can be of him, with the exception that he has rent to pay. ”

“ The statute in the present case is denominated the 'Rent Law' and its purpose is to permit a lessee to continue in possession of leased premises after the expiration of his term against the demand of his landlord, and in direct opposition to the covenants of the lease, so long as he pays the rent and performs the conditions as fixed by the lease or as modified by a commission created by the statute. This is contrary to every conception of leases that the world has ever entertained, and of the reciprocal rights and obligations of lessor and lessee. ”

“ In the first place, the real incidence of the burden is determined in the long run only. The tenant of agricultural land may indeed enter into a lease like the tenant of urban land; and, like him, he may be unable to modify the terms of his lease so as to throw on the landlord the weight of any fresh burden, which may, contrary to his reasonable expectations, be levied. ”

“ A bad tenant slips through a lease. For a good tenant it is, we maintain, an insufficient reward; if at the present usually prevailing rental (about £1 per acre) the bulk of future improvements, supposing that they are to be really improvements, devolves upon him. And we have lively recollections, which make us inimical to leases, of an aged relative of our own having been obliged a short time before her death to quit a house in which she had spent most of her life, because her lease had expired, and the house was sold over her head. ”