Property I
Midterm
Spring 2000
Prof. Brower

In 1995, Luxury Landholdings, Inc. was the owner of Blackacre Arms, a 10-unit luxury highrise apartment building on the lakefront in Chicago, Illinois. Apartment #10 was the penthouse, a 4 bedroom, 3-% bath 2000 sq. ft. suite with two fireplaces, granite counter-tops in the kitchen, and sweeping views of Lake Michigan. On June 1, 1995 Luxury Landholdings, Inc. leased #10 to Tim and Theresa, a young couple with no children, both employed at Dot.Com, a hot new internet startup company. Rent on #10 was $6000 per month, payable on the first, with the lease ending on June 30, 1999. The lease specified that Luxury Landholdings, Inc. would be responsible for maintenance of the common areas -- the lap pools and the kiddie pool, the conference rooms, and the two lobbies -- but was silent as to maintenance of the interiors of the units. Tim and Theresa enjoyed the apartment, although they worked long hours at Dot.Com and consequently ate most of their meals at one of Chicago's fine restaurants, took showers at the health club after aerobics, and entertained their friends at the office or other industry functions. They often thought about getting a dog and buying a loft to own property, but decided to wait until their employer Dot.Com went public and their stock options vested. They paid their rent promptly through their computer bill-paying service and worked hard.

In September 1999, Tim and Theresa found a note from their apartment cleaning service that there was no hot water in the guest bathroom off the third bedroom. Tim and Theresa emailed Luxury Landholdings, Inc. about the problem 4 times, but got no response other than a confirmation that the e-mail was read and received. After a videoconference about the matter with a lawyer at Attomeys.com, Tim and Theresa decided that they would send Luxury Landholdings, Inc. the following e-mail on October 31, 1999: "Since you have refused to fix the hot water in the guest bath as we requested, we inform you that November will be our final month in #10, Blackacre Arms. The situation is completely intolerable and we are forced to move, as we can no longer live in the apartment. O Besides, we do not have a lease for our unit, anyway." Tim and Theresa instructed their bill=paying service to stop sending $6000 checks to Luxury Landholdings, Inc. after the November 1, 1999 payment. Searching on-line, Tim and Theresa found another apartment, and moved there on November 30, 1999. They have paid no rent for the Blackacre Arms apartment since the November check.

It is now July 2000, Luxury Landholdings, Inc. has demanded that Tim and Theresa pay them 7 months rent for unit #10. Tim and Theresa have refused to do so claiming that they have no legal obligation because of the situation detailed above. The case has arrived in the courtroom of Judge Howard W. Hoffman, Jr., of the Cook County Circuit Court, State of Illinois for a decision. Judge Hoffman has asked you for an impartial legal opinion on the merits of this dispute. You know that Illinois follows modern, majority rules in all relevant respects.

Write that opinion answering all legal issues clearly, completely and concisely. You may use only one exam booklet, writing only on the right-hand pages of the booklet.