Landlord–tenant: assignment of lease

Question 1

Assignment

Answer 1

An assignment is a complete transfer of the tenant’s remaining term. The landlord can collect from:

(1) The tenant, pursuant to privity of contract;
(2) The subsequent tenant, pursuant to privity of estate.

Question 2

Sublease

Answer 2

A sublease is a transfer in which the tenant retains a reversionary interest.

Under such a transfer, the landlord can only collect from the tenant, and the subsequent tenant is only liable to the tenant.

Question 3

Prohibitions on assignment

Answer 3

Absent any language to the contrary, a lease can be freely assigned.

When a lease prohibits the tenant from assigning the lease, the tenant may nevertheless assign, but the landlord generally can then:

(1) terminate the lease for breach of one of its covenants; and
(2) recover any damages.

Question 4

Prohibitions on assignment: permission of the landlord

Answer 4

When a lease prevents assignment without the permission of the landlord, and the lease is silent as to a standard for exercising that permission:

• The modern trend imposes a requirement that the landlord may withhold permission:

(i) only on a reasonable ground in relation to the property being leased and
(ii) not on a whim or personal prejudice;

• The traditional rule is that the landlord may withhold permission at his discretion.