Assignments/Subleases Flashcards
Assignment —
a complete transfer of the entire remaining term of a tenant’s lease.
Sublease
a temporary transfer of a tenant’s lease for less than the remaining time in the lease.
Under an assignment, who is liable for rent?
Under an assignment, the assignee is directly liable to the LL for rent. However, if he defaults on his rent payments, the original tenant is liable for paying rent because he is still in privity of contract with the LL.
Under a sublease, who is liable for rent payments?
The original tenant is liable to the landlord for rent. The sublessee pays the original tenant who then remits it to the landlord.
Can a sublessee enforce covenants?
No
Can subleases and assignments be prohibited under a lease?
Yes, but they must be expressly and clearly prohibited.
When is a prohibition against subleases or assignments waived?
When the LL knows of the sublease or assignment and does nothing to stop it.
One year into a five-year tenancy for years, T transfers his interest “to T2 for four years; however, if T2 breaches the original lease terms, T may reenter and retake the premises.” Is this an assignment or sublease?
Assignment. This would be a sublease, but because T has retained the power to reenter upon violation of a term, he has not subleased, thereby making this a assignment under the slight majority view.
A LL assigns his interest in the property to a new landlord. What covenants are the new landlord liable for? What covenants are the old landlord liable for?
The new landlord is liable for all covenants which run with the land, whereas the old landlord is liable for all covenants which he made in the lease. Remember: privity of contract vs. privity of estate.
If a tenant assigns or sublets in violation of a lease provision, is the transfer void?
No, but the LL can terminate the lease or sue for damages.
Does a covenant against assigning prevent the tenant from subleasing their property?
No. Covenants against assignments or subleases are strictly construed against the landlord. Therefore, where there is a covenant against assigning but not against subleasing, the tenant can sublease.
Is a covenant against both subleasing and assigning an unreasonable restraint on alienation?
No
Where a tenant assigns his interest in property to another, is he still in privity of contract with the landlord?
Yes.
