Transfers of Leaseholds/Landlord's Tort Liability

Question 1

Tenant’s ability to transfer leasehold interest

Answer 1

In the absence of some prohibition in the lease, Tenant is permitted to transfer her leasehold interest in whole or in part.

Question 2

Assignment

Answer 2

When T transfers her entire leasehold interest to T2. T2 is the assignee.

e.g. T1 transfers all of the remaining 10 months on her term of years lease to T2.

Question 3

Sublease

Answer 3

When T transfers less than her entire leasehold interest. T2 is sublessee

Question 4

Landlord’s relationship to T2

Answer 4

• If the transfer is an assignment, L and T2 come into privity of estate.
• This means that L and T2 are liable to each other for all covenants or promises in the original lease that “run with the land”.
  
  • Most, if not all, promises in the original lease run with the land, meaning that they pertain to the leased premises. Common examples incl. promise to pay rent, paint, and insure, etc…
• L and T2 are not in privity of contract, unless T2 has expressly assumed the performance of all promises contained in the original lease.

Question 5

L’s relationship to T1 after assignment

Answer 5

L and T1 are no longer in privity of estate. But, they remain in privity of contract because they exchanged those original promissory words. So, L and T1 will be secondarily liable ot each other.

Question 6

Privity example

Answer 6

• L leases to T1. T1 assigns to T2. T2 assigns to T3, who engages in flagrant abuse to the premises.
• Landlord can sue T1, because they have privity of contract. T1 will also be liable if T3 flees.
• L can sue T3, because they have privity of estate
• L cannot sue T2, because no privity of contract or estate.

Question 7

Privity if the transfer is a sublease

Answer 7

• Relationship between L and T1 remains fully intact.
• L and T2 don’t share privity of estate or contract.
• T2 is responsible to T1, and vice versa. T2 must pay rent to T1 who pays L. T1 must enlist L to remediate any problems on the premises.

Question 8

Common Law of Caveat Lessee

Answer 8

Let the tenant beware. L was under no duty in tort to make the premises safe.

Question 9

Caveat Lessee exceptions

Answer 9

CLAPS

1. Common areas
2. Latent Defects
3. Assumption of Repairs
4. Public Use Rule
5. Short term lease of furnished dwelling

Question 10

Caveat Lessee Exception- Common areas

Answer 10

L has duty to keep common areas safe

Question 11

Caveat lessee exception- latent defects

Answer 11

L has duty to warn T of hidden defects of which L has knowledge or reason to know. (no duty to repair)

Question 12

Caveat Lessee exception- assumption of repairs

Answer 12

Once undertaken, L must complete repairs with reasonable care. If repairs are negligent, L is liable for injury

Question 13

Caveat Lessee Exception- Public Use Rule

Answer 13

L who:

• leases public space, and
• should know that T will not repair,
• due to the significant nature of the defect and short length of the lease,
• is liable for any defects on the premises.

Question 14

Caveat Lessee exception- Short Term Lease of Furnished Dwelling

Answer 14

L who leases out for short terms (ie. hotels) is liable for guests’ injuries if :

• they come as a result of the negligence of the owner in allowing the dwelling to degenerate into a state of disrepair, or
• if the owner’s negligence results in a dangerous condition that causes an injury to a guest.