Deck 24: Restrictive Trade Practices

Question 1

Ron has a two-year commercial lease with Southward Realty Inc. for his insurance business located in Calgary, Alberta. The lease was entered into on July 1 of year 1 and runs until year 3. It is a yearly periodic lease. In October of year 1 Ron decides that he wants to terminate the lease and move to new premises on May 1 of year 2. If there is no termination clause in the lease, when must he give notice of termination?

A) April 1, year 1; the notice must be equal one tenancy period.
B) May 1; the notice must be equal to one tenancy period.
C) February 1; the legislation requires 60 days notice.
D) February 1; the rule at common law is 60 days notice.
E) As there is no termination clause, Ron cannot give notice to terminate the lease.

Answer 1

C

Question 2

Severin leased a small shop from Matthew for a five-year term. The shop was located in a small town. Default in the payment of rent would be a basis upon which Matthew could re-enter the premises leased by Severin.

Answer 2

True

Question 3

Ron has a two-year commercial lease with Southward Realty Inc. for his insurance business located in Calgary, Alberta. The lease was entered into on July 1 of year 1 and runs until year 3. It is a monthly periodic lease. In October of year 1 Ron decides that he wants to terminate the lease and move to new premises on May 1 of year 1. If there is no termination clause in the lease, when must he give notice of termination?

A) March 31; the notice must be equal to one tenancy period.
B) April 1; the notice must be equal to one tenancy period.
C) February 1; the legislation requires 60 days notice.
D) February 1; the rule at common law is 60 days notice.
E) As there is no termination clause, Ron cannot give notice to terminate the lease.

Answer 3

A

Question 4

Severin leased a small shop from Matthew for a five-year term. The shop was located in a small town. Any lease for a term of more than three years must be in writing and under seal to comply with the Statute of Frauds.

Question 5

From a business perspective, a leasehold interest may be the only option where

A) the perfect location is not for sale.
B) there is a tax advantage to leasing.
C) ownership requires additional, unwanted responsibilities.
D) a mortgage is unworkable for cash flow reasons.
E) All of the responses are correct.

Question 6

With respect to any right of a lessee to assign (sublet) its leasehold interest,

A) it is an absolute right under Common Law, but greatly restricted by statute.
B) it is greatly restricted at Common Law, but significantly expanded by statute.
C) it is entirely governed by statute.
D) it would be entirely governed by the terms of the lease.
E) it would be entirely governed by the terms of the lease if it was a commercial tenancy.

Question 7

All of the following are remedies belonging exclusively to the lessee, except

A) distress.
B) distrain.
C) action on the covenant.
D) right of re-entry.
E) None of these are remedies.

Question 8

Severin leased a small shop from Matthew for a five-year term. The shop was located in a small town. The right to distrain against the goods of Severin would be a remedy available to Matthew, if Severin should default in the payment of his rent.

Question 9

A lease creates __________, between lessee and lessor.

A) privity of estate
B) privity of contract
C) privity of reversion
D) All of these relationships.
E) privity of estate and privity of contract

Question 10

Which is not a reciprocal right under a lease?

A) Right of exclusive possession
B) General repair
C) Payment of utilities
D) Payment of rent
E) Right of reversion

Question 11

Smitty leased an apartment from Batten that was located immediately above Batten's shop. Smitty moved into possession on a monthly tenancy. The noise created by Batten in his shop disturbed Smitty, although it would not disturb most people. If the noise was such that it rendered living in the apartment impossible, Smitty would be entitled to have the lease terminated.

Question 12

"Action on the covenant," and at Common Law, "distrain" are both remedies open to

A) a tenant to enforce a right of quiet possession or repair.
B) a landlord for non-payment of rent.
C) a landlord to terminate a tenancy-at-sufferance.
D) a tenant to enforce a pre-existing right to sublet.
E) either party to a lease.

Question 13

What happens to the real property when the lease terminates?

A) The real property repudiates to the lessor.
B) The real property repudiates to the lessee.
C) The real property reverts to the lessor.
D) The real property reverts to the lessee.
E) The real property distrains to the lessee.

Question 14

Freder was a director of Cable Shipping Ltd., a corporation that leased a large dock from Sandro. Freder gave instructions to the person in charge of the dock that the "S.S. Oxford" would be using the dock to unload its cargo. The "S.S. Oxford" damaged the dock on its arrival.

A) Freder would be personally liable to Sandro for the damages.
B) Only the owner of the "S.S. Oxford" is liable to Sandro for the damages.
C) Cable Shipping Ltd. is liable for the damages.
D) Cable Shipping Ltd. would be liable to Sandro only if the "S.S. Oxford" was owned by persons other than Cable Shipping Ltd.
E) Cable Shipping Ltd. would be liable to Sandro only if the "S.S. Oxford" was owned by Cable Shipping Ltd.

Question 15

Lucy rents a commercial storage space every summer to store her possessions while she is not at school. She pays the storage fees by cheque each month to the owner of the facility.

A) Lucy is in a periodic tenancy.
B) Lucy is a subtenant.
C) Lucy is in a tenancy at will.
D) Lucy will have to pay additional monthly rent unless she gives notice to quit when she removes her belongings.
E) Lucy is in a periodic tenancy and will have to pay additional monthly rent unless she gives notice to quit when she removes her belongings.

Question 16

Severin leased a small shop from Matthew for a five-year term. The shop was located in a small town. Any lease for a term of more than one year is an agreement that must be in writing to satisfy the Statute of Frauds.

Question 17

The interest transferred in a lease is

A) less than a conveyance in fee simple, but more than a licence or easement.
B) less than either a conveyance in fee simple or licence but more than an easement.
C) less than all three.
D) more than all three.

Question 18

Smitty leased an apartment from Batten that was located immediately above Batten's shop. Smitty moved into possession on a monthly tenancy. The noise created by Batten in his shop disturbed Smitty, although it would not disturb most people. The noise created by Batten in his shop was in violation of his covenant of "quiet possession."

Question 19

A lease bears similarity to a transfer of property in that

A) if its term exceeds one year, it must be registered.
B) the lessee is entitled to "quiet possession."
C) any fixtures a tenant installs become part and parcel of the real property, as is the case for an owner.
D) both must be in writing to be enforceable.
E) any fixtures a tenant installs become part and parcel of the real property, as is the case for an owner and the lessee is entitled to "quiet possession."

Question 20

Smitty leased an apartment from Batten that was located immediately above Batten's shop. Smitty moved into possession on a monthly tenancy. The noise created by Batten in his shop disturbed Smitty, although it would not disturb most people. If the noise constituted a nuisance at law, Smitty would be entitled to obtain an injunction to stop Batten from making the noise.

Question 21

Where a tenant sublets, privity of contract between himself and the landlord comes to an end.

Question 22

A lease creates both privity of estate and privity of contract between the lessee and the landlord.

Question 23

The day following expiry of a residential tenancy, the landlord has an absolute right to re-enter the premises.

Question 24

The major advantage to a lessee in a sale-and-lease-back transaction is that what are now rental payments are a deductible expense.

Question 25

Smitty leased an apartment from Batten that was located immediately above Batten's shop. Smitty moved into possession on a monthly tenancy. The noise created by Batten in his shop disturbed Smitty, although it would not disturb most people. Smitty has quiet enjoyment of the premises.

Question 26

Where the leased premises are subject to a covenant that runs with the land, a third party with the right to enforce the covenant should sue the lessor for a breach of that covenant.

Question 27

Discuss the application of the Statute of Frauds and the requirement of registration with respect to leasehold interests, give reasons why these conditions are imposed, and explicitly treat the situation of a lease of indefinite term.

Question 28

A water purifier attached to a residence by a tenant at his own expense may not be removed by him on expiry of the lease.

Question 29

Larry entered into a two-year lease with Ned, the landlord, to rent a small plot of land for a garden. Once the lease was made, Larry promptly sublet the land to Nayib. A sublease must terminate at a point in time on or before the point in time that the lease between Larry and Ned expires.

Question 30

The legal responsibility for payment of property tax, even if provided for in the lease, rests with the lessee.

Question 31

No lease other than a written lease may be brought before the Courts for enforcement.

Question 32

In the case of a periodic tenancy, after one year and in the absence of a notice to quit, the tenancy becomes a tenancy at sufferance.

Question 33

Larry entered into a two-year lease with Ned, the landlord, to rent a small plot of land for a garden. Once the lease was made, Larry promptly sublet the land to Nayib. Once the subtenancy is established, Nayib may remove any trees on the property.

Question 34

One individual may be both the landlord and tenant for the same parcel of land.

Question 35

To be enforceable against a tenant, a lease of over three years must be registered on the title of the property.

Question 36

Distress is the right of a landlord to seize and sell a tenant's goods to satisfy rental arrears.

Question 37

Larry entered into a two-year lease with Ned, the landlord, to rent a small plot of land for a garden. Once the lease was made, Larry promptly sublet the land to Nayib. Nayib must pay rent to Ned under the sublease.

Question 38

A lease which does not specify a definite term to expiry but where rent is paid monthly (a) renews itself monthly, and (b) need not be in writing.

Question 39

Larry entered into a two-year lease with Ned, the landlord, to rent a small plot of land for a garden. Once the lease was made, Larry promptly sublet the land to Nayib. Larry would be liable on the lease, even though the property was now in the possession of Nayib.

Question 40

List the right of, and the duties imposed upon a landlord and tenant at common law, and the remedies available to each party.

Question 41

Savesure Department Stores were a chain of discount stores offering low-priced consumer products in a no-frills environment. They had found great success, particularly in urban centres where they offered many name-brand or comparable products at prices far below the competition. As a result, Savesure had built a network of over 50 franchised stores, many located in shopping centres.
One of its stores was located in a leased building on the main street of a large city directly opposite a major shopping centre. The lease provided for a minimum annual rent of $24,000 payable monthly plus 10% of gross sales revenue. The lease also contained a covenant that the tenant would not open one of its stores within a eight-kilometre radius of the existing leased premises.
After several years the landlord sold the property and assigned the lease to the purchaser. The new owner then discovered that Savesure had been operating a store in the shopping centre across the street for five years.
What issues does this case present? What rights, if any, does the new landlord have?

Question 42

The Elegant Gift Shop had been a tenant in Meadowvale Shopping Centre for ten years. The commercial lease contained a term in which all tenants agreed to participate in all Centre promotional activities and to be open for business during the hours which the landlord stipulated as hours of operation for the centre. At the time Elegant entered into the lease, legislation was in place which prohibited the opening of retail establishments on Sundays and statutory holidays.
Recently, the provincial government's legislation was challenged and was found unconstitutional by the courts, thus allowing retail stores to remain open on Sundays and holidays. The manager of Harborvale Centre immediately sent notices to all mall tenants that the Centre would now be open on Sunday and all shops were required to be open for business. The notice referred to the clause in the lease entitling the landlord to require tenants to be open during the hours designated by the landlord as hours of operation.
What issues does this situation present? Discuss the rights of the parties involved.

Question 43

How does the legal interest in land under a leasehold compare to the interests of the parties to a mortgage. If the landlord has mortgaged the property, how does that affect the actual legal interests of the various parties in the land?

Question 44

Describe the major ways in which commercial leases differ from residential leases, and any terms which are commonly found only in commercial or shopping centre leases.

Question 45

If no date for the end of the lease is discussed by the parties, what type of lease is this? How is the end of the lease determined in the normal course of matters? What facts would you need to know to determine the scope of the landlord's rights upon termination?