Real Property: Landlord-Tenants: Assignment vs. Sublease
Assignment vs. Sublease- If the lease does not prohibit it, a T may freely transfer his interest in whole (assignment) or in part (sublease).
- In lease, L can prohibit T from assigning or subletting without L’s prior written consent. But once L consents to one transfer by T, L waives the right to object to future transfers by that T, unless L reserves the right expressly.
- Assignment (memorize example)
- Assignment = T1 has 10 months remaining on a two-year term of years. T1 transfers all 10 months to T2.
- L and T2 are in privity of estate – they are liable to each other for all of the covenants in the original lease that run with the land.
- EX: promise to pay rent, to paint, or to repair, to pay taxes.
- L and T2 are NOT in privity of contract unless: T2 expressly assumed all promises in the original lease.
- L and T1 are no longer in privity of estate. They remain in privity of contract.
- Thus, L and T1 are secondarily liable to each other.
- Assignment = L leases Blackacre to T1. T1 assigns to T2. T2 assigns to T3. T3 then engages in flagrant abuse to the premises.
- L can proceed against T3, the direct wrongdoer because they are in privity of estate. L wins
- L can proceed against T1, the original tenant because they are in privity of contract. T1 is secondarily liable to L.
- L cannot proceed against T2. Privity of estate between the two ended once T2 assigned to T3.
- Sublease: L & sublessee are NEITHER in privity of estate NOR privity of contract. T2 is responsible to T1 and vice versa.