Transfers of Leaseholds and Landlord's Tort Liability

Question 1

Assignment v. Sublease

Answer 1

Assignment - meaning a transfer of the entire remaining term of a lease

Sublease - the T has retained some part of the remaining term, other than a right to reenter upon breach.

Question 2

Transfer of Leasehold

Answer 2

In the lease, a LL can prohibit a T from assigning or subletting without the LL’s prior written approval.

However, once the LL consents to one transfer by a T, the LL waives the right to object to future transfers by that T, unless the LL expressly reserves the right.

Question 3

The Assignment - HIGHLY TESTED

Answer 3

Assignee T in privity of estate with L - each is liable to the other on all covenants in the lease that “run with the land.”

After assignment, the original T is no longer in privity of estate with the LL, but their lease contract remains in effect and enforceable.

In other words, the original T remains liable on the original contractual obligations, such as to pay rent (privity of contract)

Question 4

Covenants that Run with the Land

Answer 4

Covenants run with the land if the original parties to the lease so intend and if the covenant “touches and concerns” the land.

Question 5

Rent Covenants

Answer 5

Because a covenant to pay rent runs with the land, the assignee owes rent directly to the LL.

If a T’s assignee fails to pay rent, the LL can sue the assignee because of privity of estate and, if the assignee cannot pay, can also sue the original T because of privity of contract.

Question 6

The Sublease

Answer 6

A sublease arises when T1, the original T, transfers less than her entire interest to T2.

The result of a sublease is that the landlord and sublessee are in neither privity of estate nor contract.

Instead, T2 is responsible to T1 and vice versa.

Thus, a subleasee is not personally liable to the LL for rent or for the performance of any of the covenants in the main lease unless the sublessee expressly assumes the covenants

Question 7

Sublease - LL’s Remedies

Answer 7

LL may terminate the main lease for nonpayment of rent or breach of other covenants if the lease so states or the power is given by statute.

The sublease automatically terminates with the main lease.

Question 8

Sublease - Rights of Sublessee

Answer 8

A sublessee cannot enforce any covenants made by the LL in the main lease, except a residential sublessee may be able to enforce the implied warranty of habitability against the LL.

Question 9

Covenants Against Assignment or Sublease

Answer 9

LL can prohibit a T from assigning or subletting without hte LL’s prior written approval.

A valid covenant against assignment is considered waived if the Ll was aware of the assignment and did not object.

Once a LL consents to one transfer by a tenant, the LL waives the right to object to future transfers by that T, unless the LL expressly reserves the right.

Lease covenants restricting assignment and sublease are strictly construed against the LL.

Question 10

Assignments by LL

Answer 10

LL may assign the rents and reversion interest they own. This is usually done by deed when the LL coneys a building to a new owner. The T’s consent is not required.

Question 11

Rights of Assignee Against T - Attornment

Answer 11

Once T’s are given reasonable notice of the assignment, they must recognize and pay rent to the new owner as their landlord.

The benefit of all T covenants that touch and concern the land runs with the LL’s estate to the new owner.

Question 12

Liabilities of Assignee to Tenants

Answer 12

The burden of the LL’s covenants that touch and concern the land runs with the LL’s estate tothe assignee; thus, the assignee is liable for the performance of those covenants.

The original LL also remains liable on all of the covenants they made in the lease.

Question 13

LL’s Tort Liability - Common Law of Caveat Lessee

Answer 13

The CL norm is: Let the tenant beware. In tort, LL was under no duty to amke the premises safe.

5 Exceptions - CLAPS

Common Areas
Latent Defects - L must warn
Assumption of Repairs - L liable if negligent
Public Use Rule - short lease, significant defect
Short-term lease of furnished dwelling.

Question 14

Common Areas

Answer 14

LL has a duty of reasonable care in maintaining all common areas (hallways, stairwells, elevators, etc.)

Question 15

Latent Defects Rule

Answer 15

L must warn T of hidden defects of which the LL has knowledge or reason to know.

NOTE - the LL’s obligation in tort is a duty to warn, and not a duty to repair.

Question 16

Assumption of Repairs

Answer 16

While in tort a LL is under no dut yto make repairs, once repairs are undertaken, the LL must complete them with reasonable care.

Question 17

Public Use Rule

Answer 17

A LL who leases public space, and who should know, because of the significant nature of the defect and the short length of lease, that a tenant will not repair, is liable for any defects on the premises that cause injury to members of the public.

Question 18

Short-Term Lease or Furnished Dwelling

Answer 18

a LL who rents a fully furnished premise for a short period is under a stricter duty.

Such LL’s are responsible for any defective condition which proximately injures a tenant.

Question 19

Modern Trend - General Duty of Reasonable Care

Answer 19

LL owes a general duty of reasonable care toward residential T’s, and will be held liable for injuries in tort resulting from ordinary negligence if the LL had notice of a defect and an opportunity to repair it.

Question 20

Fixtures

Answer 20

chattel that has been so affixed to land that it has ceased being personal property and has become part of the realty.

Fixture passes with ownership of the land and must stay put.