Ownership of real property - Possession and rent

Learning Outcomes

This article explains landlord–tenant possession and rent doctrines for the MBE, including:

• Clarifying the distinction between legal and actual possession and how each affects a tenant’s right to occupy leased premises.
• Describing the landlord’s duty to deliver possession at the start of the lease and contrasting the majority English rule with the minority American rule.
• Identifying when rent becomes due, when rent liability begins, and how lease terms and default rules interact.
• Analyzing the consequences of non‑payment of rent, including summary eviction procedures, money damages, and the prohibition on self‑help.
• Examining abandonment, surrender, acceptance, and the landlord’s duty to mitigate damages, with a focus on ongoing and future rent liability.
• Explaining constructive and actual eviction, including partial eviction, and how these doctrines terminate, suspend, or reduce rent obligations.
• Connecting the implied warranty of habitability and the covenant of quiet enjoyment to rent defenses frequently tested on the exam.
• Detailing how holdover tenancies arise, how they affect new tenants’ rights to possession, and the resulting rent consequences.
• Distinguishing assignments from subleases and mapping privity of contract and estate so you can determine who is liable for rent at each stage of the tenancy.
• Applying these principles to common MBE fact patterns that blend possession disputes with complex questions about who ultimately owes rent.

MBE Syllabus

For the MBE, you are required to understand landlord–tenant possession and rent doctrines, with a focus on the following syllabus points:

• Recognizing the right to possession under different types of estates and tenancies.
• Distinguishing actual, legal, and constructive possession, especially at lease commencement and after default.
• Identifying when rent is due, when rent liability begins, and how it can be terminated or suspended.
• Explaining landlord remedies for non-payment of rent, including eviction and damages.
• Understanding abandonment, surrender, mitigation of damages, and holdover tenancies.
• Allocating rent liability after assignments and subleases.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which of the following is generally required for a tenant to be liable for rent once the lease term has begun?
   1. The tenant has moved furniture into the premises.
   2. The tenant has the legal right to possession, regardless of physical entry.
   3. The landlord has delivered both legal and actual possession.
   4. The tenant has paid a security deposit.
2. If a tenant abandons the leased premises before the end of the term, the landlord’s duty to mitigate damages usually means:
   1. The landlord must accept the abandonment and terminate the lease.
   2. The landlord must make reasonable efforts to relet the premises.
   3. The landlord can ignore the abandonment and sue for all future rent without mitigation.
   4. The tenant is automatically released from all rent liability.
3. When is a landlord typically entitled to recover possession of leased property after a tenant stops paying rent?
   1. Only after the tenant voluntarily surrenders the lease.
   2. After giving any contractually required notice to quit and, if necessary, obtaining a court order.
   3. Whenever the landlord wishes, by changing the locks.
   4. Only if the tenant fails to pay rent for at least six months.

Introduction

Possession and rent are at the core of landlord–tenant questions on the MBE. The landlord’s main obligation is to provide possession; the tenant’s primary obligation is to pay rent for that possession. Many exam problems turn on precisely when the right to possession and the obligation to pay rent begin, how they are affected by breach, and how they end.

Types of Possession

Possession can be described in several ways that the examiners expect you to distinguish.

Key Term: Actual Possession
Physical occupation or control of real property — for example, when a tenant has moved in and is using the premises.

Key Term: Legal Possession
The legal right to exclusive possession, even if the tenant has not yet physically entered or moved in.

A tenant under a valid lease ordinarily has both legal and actual possession once the term starts and the tenant has taken occupancy. The difference between legal and actual possession matters most at the beginning of the lease (especially if there is a holdover tenant) and when the landlord interferes with the tenant’s use.

Delivery of Possession at the Start of the Lease

At common law, there was a split over what the landlord had to deliver at the start of the lease term.

• English (majority/modern) rule: The landlord must deliver actual possession at the beginning of the term. If a prior tenant wrongfully holds over, the new tenant may:

  • terminate the lease and sue for damages, or
  • withhold rent until actual possession is delivered and sue for damages.

• American (minority) rule: The landlord need only deliver legal possession; the new tenant must handle removing a holdover tenant.

On the MBE, unless the question clearly states otherwise, assume the majority rule applies: the landlord must put the new tenant into actual possession at the start of the term.

Key Term: Delivery of Possession
The landlord’s obligation at lease commencement to place the tenant in the legal (and, in most jurisdictions, actual) possession of the premises.

Key Term: Holdover Tenant
A tenant who remains in possession after the lease term ends, creating a tenancy at sufferance until the landlord either evicts or elects to hold the tenant to a new tenancy.

If a holdover tenant is still in actual possession on the new lease’s start date, the new tenant has the legal right to possession but not actual possession. Under the majority rule, the landlord has breached; the new tenant’s rent obligation is suspended until actual possession is delivered.

Rent Liability and Timing

Key Term: Rent
The agreed payment from a tenant to a landlord for the use and possession of real property.

Rent is usually governed by the lease:

• If the lease states when rent is due, that controls (e.g., “$1,000 on the first of each month in advance”).
• If the lease is silent, default rules apply. At common law, rent for a term of years was due at the end of the term. In practice, most modern leases specify monthly payments.

When does rent liability begin?

• Once the lease term starts and the landlord has done what the jurisdiction requires for delivery of possession:
  • Under the majority rule (actual possession required), rent is not owed until actual possession is tendered.
  • Under the minority rule (legal possession only), rent is owed once legal possession is available, even if a holdover physically blocks entry.

If the landlord has complied with the delivery obligation and the tenant simply chooses not to move in, the tenant is still liable for rent. The tenant’s personal choice not to occupy does not excuse performance.

Security deposits and late fees:

Security deposits and late fees are common lease terms. They do not themselves create or excuse rent liability but can influence remedies. The MBE rarely tests the fine details, but you should recognize:

• deposits are typically held to cover unpaid rent and damage;
• many states regulate deposit amounts and return timing.

Consequences of Non-Payment of Rent

If a tenant fails to pay rent when due and remains in possession, the landlord has several possible remedies, subject to statute and the lease terms.

Key Term: Summary Proceeding (Unlawful Detainer)
A fast-track statutory procedure that allows a landlord to recover possession from a tenant who has wrongfully stayed in possession, often after non-payment of rent.

Typical landlord remedies include:

• Terminate the lease and seek possession:

  • The landlord must usually give any contractually or statutorily required notice to cure or quit (e.g., “pay within 10 days or vacate”).
  • If the tenant does not cure, the landlord files a summary eviction/unlawful detainer action and obtains a court order of possession.

• Sue for unpaid rent (and possibly future rent):

  • The landlord can sue for accrued rent.
  • Recovery of future rent depends on jurisdiction and whether the landlord has terminated the lease or relet.

• Use of lien or distress (minority, statutory):

  • A few jurisdictions allow a landlord to assert a statutory lien on the tenant’s personal property to secure unpaid rent.
  • On the MBE this is usually mentioned explicitly; do not assume it exists.

No self-help: The modern majority rule is that landlords may not use self-help to evict — e.g., changing locks, removing doors, or shutting off utilities. The landlord must use judicial process. A landlord who wrongfully evicts can be liable for damages and may have relieved the tenant of rent liability.

Key Term: Implied Covenant of Quiet Enjoyment
An implied promise in every lease that the tenant’s possession will not be substantially interfered with by the landlord or someone with superior title.

The covenant of quiet enjoyment is breached by serious landlord interference or actual/constructive eviction; that breach is often a defense to a rent claim.

Abandonment, Surrender, and Mitigation

Sometimes the tenant leaves before the lease ends and stops paying rent.

Key Term: Abandonment
When a tenant unjustifiably vacates the premises and stops paying rent before the lease ends, without the landlord’s consent.

Key Term: Surrender
The tenant’s offer to end the lease before the term expires, which the landlord may accept (expressly or impliedly) or reject.

If a tenant abandons, the landlord has options:

1. Accept surrender:

   • If the landlord clearly accepts the tenant’s surrender (for example, by taking back possession for the landlord’s own use or expressly agreeing to terminate), the lease ends, and the tenant’s future rent liability stops. The tenant remains liable for rent already accrued.

2. Reject surrender and relet on the tenant’s account:

   • The landlord may treat the lease as continuing, relet the premises, and hold the tenant liable for any difference between the new rent and the old rent, plus reasonable costs of reletting.

3. Do nothing and sue for rent:

   • At strict common law, the landlord could leave the premises vacant and sue for rent as it came due.
   • Modern majority rule: the landlord has a duty to mitigate damages, at least in residential leases and in many jurisdictions for commercial leases. The landlord must make reasonable efforts to relet. Failure to mitigate limits the landlord’s recovery.

Key Term: Mitigation of Damages
The landlord’s duty, after a tenant’s unjustified abandonment, to make reasonable efforts to relet the premises and thereby reduce the tenant’s rent liability.

On the MBE, where facts show the landlord making no effort to relet, expect the tenant’s liability to be reduced accordingly.

Acceptance of surrender usually requires conduct inconsistent with the lease continuing — such as moving into the unit or reletting it for a longer term without reserving rights. Merely entering to inspect, clean, or show the property to prospective tenants is not automatically acceptance.

Constructive and Actual Eviction

Sometimes the landlord’s conduct, not the tenant’s, is the problem.

Key Term: Constructive Eviction
When a landlord’s wrongful act or omission substantially interferes with the tenant’s use and enjoyment, and the tenant vacates within a reasonable time, thereby terminating rent liability.

To establish constructive eviction, a tenant generally must show:

• The landlord did something wrongful (or failed to perform a duty) — for example, failing to repair severe leaks, chronic lack of heat, or allowing dangerous conditions in common areas.
• The conduct substantially interfered with the tenant’s use and enjoyment (not mere minor annoyances).
• The tenant gave the landlord notice and a reasonable opportunity to cure.
• The tenant vacated the premises within a reasonable time.

If constructive eviction is established, the tenant’s rent obligation ends as of the date of vacatur, and the tenant can seek damages.

Key Term: Partial Actual Eviction
When the tenant is physically excluded from part of the leased premises, either by the landlord or by someone with superior title.

Rules for actual eviction:

• Total actual eviction by landlord: The tenant is relieved of all rent liability.
• Partial actual eviction by landlord (majority rule): The tenant may remain in possession of the part left and withhold all rent until full possession is restored.
• Partial eviction by a third party with superior title: The tenant’s rent is abated proportionally to the portion lost.

Constructive eviction arises from interference that effectively forces the tenant out, even without physical lockout. Actual eviction involves physical exclusion.

Rent and Habitability (Residential Leases)

In addition to quiet enjoyment and constructive eviction, most jurisdictions impose an implied warranty of habitability in residential leases. While this article focuses on possession and rent, you should recognize the rent consequences:

• Serious housing code violations or conditions that make premises unfit for residential use breach the warranty.
• In many states, after notice and reasonable opportunity to cure, a residential tenant may:
  • withhold rent,
  • repair and deduct,
  • or move out and treat the lease as terminated.

Breach of this warranty is a common defense to a landlord’s action for rent on the MBE. Commercial leases generally do not carry this implied warranty.

Holdover Tenants and Rent

When a lease term ends and the tenant stays in possession without the landlord’s consent, the tenant becomes a tenant at sufferance (holdover tenant).

The landlord may:

• Treat the tenant as a trespasser and bring an eviction/unlawful detainer action, or
• Elect to hold the tenant to a new tenancy, usually:
  • a month-to-month periodic tenancy for residential property, or
  • a new term of years corresponding to the previous term for commercial property (if reasonable).

The new rent is usually at the old rate, but if the landlord has given advance written notice of increased “holdover rent,” that may control. Some statutes permit double rent for willful holdovers, but this will be spelled out in the fact pattern.

The existence of a holdover tenant can also put the landlord in breach of the obligation to deliver possession to a new incoming tenant under the majority English rule.

Assignments, Subleases, and Rent Liability

Transfers by the tenant affect who is liable for rent, a favorite MBE topic.

Key Term: Assignment
A transfer by the tenant of all of the remaining leasehold term to a new party.

Key Term: Sublease
A transfer by the tenant of less than the remaining leasehold term, so the original tenant retains a reversionary interest.

In an assignment:

• The landlord can collect rent from:

  • the original tenant, on the basis of privity of contract (the lease agreement), and
  • the assignee, on the basis of privity of estate (the assignee now holds the leasehold estate).

• If the assignee later assigns to someone else, privity of estate with the first assignee ends; the original tenant remains liable on the contract unless released in a novation.

In a sublease:

• The landlord remains in privity of estate and contract only with the original tenant.
• The subtenant is liable for rent only to the original tenant, absent a separate assumption agreement with the landlord.

These privity relationships explain why, when rent goes unpaid after an assignment, the landlord often may sue either the original tenant or the current assignee.

Remedies for Possession and Rent

Landlords often pursue both possession and money damages. Typical sequence on the exam:

1. Tenant stops paying rent.
2. Landlord gives any required notice and files an unlawful detainer action.
3. Tenant asserts defenses (e.g., breach of quiet enjoyment, constructive eviction, implied warranty of habitability, payment).
4. If landlord prevails, court awards possession and, often, a money judgment for back rent.
5. Any future rent claims may require a separate action, especially if mitigation is at issue.

Tenants in possession can use the landlord’s breaches as shields (defenses to rent claims) or swords (affirmative actions for damages).

Worked Example 1.1

A tenant signs a one-year lease for an apartment, with rent due monthly in advance starting June 1. On June 1, the prior tenant is still in possession and refuses to leave. The new tenant cannot move in for two weeks. The jurisdiction follows the majority rule requiring delivery of actual possession. Is the new tenant liable for rent during the period of non-possession?

Answer:
No. Because the landlord failed to deliver actual possession at the start of the lease as required by the majority rule, the landlord is in breach. The new tenant’s obligation to pay rent is suspended until actual possession is delivered. The tenant may also terminate the lease and seek damages caused by the delay.

Worked Example 1.2

A tenant abandons a commercial property six months into a two-year lease. The landlord does nothing to relet the premises for the remaining 18 months, even though similar space is in demand. At the end of the lease term, the landlord sues for the full 18 months of unpaid rent. Can the landlord recover the full amount?

Answer:
Probably not. In most jurisdictions, the landlord has a duty to mitigate damages after abandonment by making reasonable efforts to relet the space. Here, the landlord made no effort to relet despite a favorable market. The tenant is liable only for the rent that would have been owed minus the amount that could reasonably have been obtained by reletting. The landlord’s failure to mitigate limits recovery.

Worked Example 1.3

A tenant rents a residential apartment under a one-year lease. After three months, severe leaks develop; water pours through the ceiling whenever it rains, damaging the tenant’s property and making one bedroom unusable. The tenant repeatedly notifies the landlord, who does nothing. After four more months of this, the tenant moves out and stops paying rent, claiming constructive eviction. Is the tenant still liable for rent after moving out?

Answer:
No, if the elements of constructive eviction are satisfied. The landlord’s ongoing failure to repair severe leaks is a wrongful omission that substantially interferes with the tenant’s use. The tenant gave notice and a reasonable chance to cure. By vacating within a reasonable time after the landlord’s failure to act, the tenant completes the constructive eviction and is relieved of rent liability from the move-out date forward. The tenant may also recover damages for losses caused while in possession.

Exam Warning

On the MBE, watch for questions where the landlord fails to deliver actual possession at lease commencement because a prior tenant is holding over. Unless a minority American rule is specified, assume no rent is owed by the new tenant until actual possession is delivered.

Revision Tip

Remember: Rent liability usually begins when the tenant has the legal right to possession and the landlord has fulfilled any duty to deliver possession, not necessarily when the tenant physically moves in. However, landlord breaches (e.g., failure to deliver possession, constructive or actual eviction, breach of habitability) can suspend or terminate rent obligations.

Key Point Checklist

This article has covered the following key knowledge points:

• Actual possession is physical occupancy; legal possession is the right to exclusive occupancy.
• The difference between actual and legal possession is important with holdover tenants and at lease commencement.
• Under the majority (English) rule, landlords must deliver actual possession at lease start; failure excuses rent and may allow termination and damages.
• Under the minority (American) rule, landlords need only deliver legal possession; rent is still owed even if a holdover remains.
• Rent is due as specified in the lease; if silent, default rules apply, but most leases provide monthly rent in advance.
• Once the tenancy begins and the landlord has satisfied the delivery obligation, a tenant’s choice not to move in does not excuse rent.
• Non-payment of rent allows the landlord to seek possession via summary proceedings and to sue for unpaid rent; self-help eviction is generally prohibited.
• Tenants may assert landlord breaches (quiet enjoyment, constructive eviction, breach of habitability) as defenses to rent claims.
• If a tenant abandons, the landlord may accept surrender (ending future rent) or relet on the tenant’s account.
• In most jurisdictions, landlords have a duty to mitigate damages after abandonment by making reasonable efforts to relet.
• Surrender ends rent liability from acceptance forward; acceptance may be express or implied from the landlord’s conduct.
• Constructive eviction requires substantial interference, notice, a reasonable opportunity to cure, and the tenant’s timely vacatur; it terminates rent liability from move-out.
• Actual or partial actual eviction by the landlord relieves the tenant of all (for total) or, in many jurisdictions, all rent until full possession is restored.
• Holdover tenants create a tenancy at sufferance; the landlord may evict or hold the tenant to a new tenancy and may owe damages to incoming tenants.
• Assignments create privity of estate between landlord and assignee, allowing the landlord to collect rent from both original tenant and assignee.
• Subleases leave privity only between landlord and original tenant; the landlord cannot collect rent directly from the subtenant absent a separate agreement.

Key Terms and Concepts

• Actual Possession
• Legal Possession
• Rent
• Delivery of Possession
• Holdover Tenant
• Summary Proceeding (Unlawful Detainer)
• Implied Covenant of Quiet Enjoyment
• Abandonment
• Surrender
• Mitigation of Damages
• Constructive Eviction
• Partial Actual Eviction
• Assignment
• Sublease