Transfer of Leaseholds / LL's Liability Flashcards
Assignment Definition
An assignment is a transfer of the entire remaining term of a lease to an assignee, who stands in the shoes of the original tenant in privity of estate with the landlord.
- The new tenant and the landlord are liable to each other for all covenants that “run with the land.”
The original Tenant (assignor) remains in “privity of contract” with the landlord, and are still liable for original lease obligations (pay rent, taxes, repair etc.)
Sublease Definition
A sublease is a transfer of part of the remaining term of lease that is less than the transferor’s entire interest.
The new tenant has no privity of estate or privity of contract with the landlord.
- T1 and T2 are responsible to each other
- Relationship between L and T1 remains intact
Sublease: Who sues who?
If T2 fails to pay rent, L sues T1, T1 then goes after T2.
T2 sues T1, T1 then impleads L.
When can a sublessee enforce a covenant made by the landlord in the main lease?
A sublessee cannot enforce any covenants made by the landlord in the main lease, EXCEPT a residential sublessee may be able to enforce the implied warranty of habitability against L.
Caveat Lessee (Tenant Beware)
CL Rule: Let the tenant beware. In tort, L was under no duty to make the premises safe.
FIVE EXCEPTIONS (CLAPS):
- Common Areas
- Latent Defects
- Assumption of Repairs
- Public Use rule
- Short-term lease of furnished dwelling
L’s duty to maintain common areas
L has a duty of reasonable care in maintaining all common areas (e.g., stairways, elevators)
Latent Defect Rule (exception to Caveat Lessee)
L must warn a tenant of hidden defects that the tenant could not discover by reasonable inspection, that L knew or had reason to know about.
This is an obligation in tort to WARN, not to REPAIR
Assumption of repairs (exception to Caveat Lessee)
If L makes repairs negligently, L is liable
Public Use rule (exception to Caveat Lessee)
If L leases public space, for a short time and with a significant defect, should know that a tenant will not make repairs. L is liable for any defects on the premises that cause injury.
Short-term lease of a furnished dwelling (exception to Caveat Lessee)
If L rents a fully furnished premises for a short period of time, they are responsible for ANY defective condition that proximately injures a tenant.
Modern Trent (moving away from Caveat Lessee)
L owes a general duty of reasonable care toward residential tenants, and will be liable in tort for negligence if L had notice of a defect and an opportunity to repair it.
