Module 6 - Transfers of Leaseholds and Landlord’s Tort Liability

What is an assignment in the context of a lease transfer?

An assignment occurs when a tenant transfers their entire remaining interest in the lease to another person.

What is a sublease in the context of a lease transfer?

A sublease happens when a tenant transfers only part of their remaining lease term to another person, retaining some interest, like the right to reenter upon breach.

Can a landlord prohibit a tenant from assigning or subletting their lease?

Yes, a landlord can prohibit a tenant from assigning or subletting without prior written approval in the lease.

What happens if a landlord consents to one lease transfer by a tenant?

The landlord waives the right to object to future transfers by that tenant, unless the right is expressly reserved.

What is "privity of estate"?

Privity of estate is the direct relationship between the landlord and the assignee, making both liable for lease covenants that "run with the land."

After an assignment, does the original tenant remain liable under the lease?

Yes, the original tenant remains liable under the lease contract (privity of contract), even though they are no longer in privity of estate.

What is an example of a covenant that runs with the land?

Examples include the covenant to pay rent, to make repairs, to pay taxes, or to paint the premises.

Why are L (landlord) and T2 (assignee) not in privity of contract?

L and T2 never exchanged the original contractual promises that created the lease, so there is no privity of contract.

Can a landlord sue the original tenant (T1) if the assignee (T2) fails to pay rent?

Yes, because L and T1 remain in privity of contract, L can sue T1 if T2 cannot pay.

In Hypo 6B, can L sue T3 for damages to the premises?

Yes, because L and T3 are in privity of estate, L can sue T3, the direct wrongdoer.

In Hypo 6B, can L sue T1, the original tenant?

Yes, L can sue T1 because they are still in privity of contract.

What is the effect of privity of estate ending after a leasehold reassignment?

Once the assignee reassigns their leasehold interest, privity of estate with the landlord ends, and the assignee is no longer liable for rent or breaches by the new tenant.

What is a sublessee's relationship to the original tenant and the landlord?

A sublessee is the tenant of the original lessee and usually pays rent to the original lessee, not directly to the landlord.

What happens when a tenant (T1) transfers less than their entire interest to another (T2)?

A sublease arises, and T1 retains some interest. The landlord and T2 are in neither privity of estate nor privity of contract.

Who is liable for rent and lease performance in a sublease?

The sublessee (T2) is responsible to the original tenant (T1) and vice versa. The sublessee is not liable to the landlord unless they expressly assume the covenants.

Can a landlord terminate a sublease?

Yes, the landlord can terminate the main lease for nonpayment of rent or other breaches, which would automatically terminate the sublease.

Can a sublessee enforce covenants made by the landlord in the main lease?

No, except a residential sublessee may be able to enforce the implied warranty of habitability against the landlord.

What is a covenant against assignment or sublease?

It is a clause in the lease where a landlord can prohibit a tenant from assigning or subletting without prior written approval.

What happens if a landlord consents to one transfer by a tenant?

The landlord waives the right to object to future transfers by that tenant unless the right is expressly reserved (Rule in Dumpor's Case).

How are lease covenants restricting assignment or sublease construed?

They are strictly construed against the landlord. A covenant prohibiting assignment does not prohibit subleasing and vice versa.

What are the consequences if a tenant assigns or sublets in violation of the lease?

The landlord may terminate the lease or sue for damages, but the transfer is not void

Can a landlord assign their interest in rents and reversion?

Yes, a landlord may assign the rents and reversion interest they own, usually by deed when conveying the building to a new owner.

Is tenants' consent required when a landlord assigns their interest?

No, tenants' consent is not required for the landlord to assign their interest.

What is the concept of attornment in landlord assignments?

Once tenants are given reasonable notice of the assignment, they must recognize and pay rent to the new owner as their landlord.

What happens to the landlord's covenants after an assignment to a new owner?

The burden of the landlord's covenants that touch and concern the land runs with the estate to the assignee, making them liable for performance.

Does the original landlord remain liable after assigning their interest?

Yes, the original landlord remains liable for all covenants they made in the lease.

What is the common law norm regarding a landlord's duty to make the premises safe in tort law?

The common law norm is "Let the tenant beware" (caveat lessee). A landlord was under no duty to make the premises safe.

What are the five exceptions to caveat lessee in landlord's tort liability?

CLAPS:

Common areas

Latent defects

Assumption of repairs

Public use rule

Short-term lease of furnished dwelling

What is the landlord's duty regarding common areas under the common law?

A landlord has a duty of reasonable care in maintaining all common areas (e.g., hallways, stairwells, elevators).

What is the Latent Defects Rule in landlord's tort liability?

A landlord must warn tenants of hidden defects that the tenant could not discover by reasonable inspection, and the landlord knows or should know about.

Is a landlord obligated to repair latent defects under the Latent Defects Rule?

No, the landlord's obligation is only to warn of the defect, not to repair it.

What happens if a tenant accepts the premises after being warned about a latent defect?

The tenant assumes the risk, and the landlord is no longer liable in tort for injuries resulting from the condition.

What happens if a landlord undertakes repairs negligently or gives a deceptive appearance of safety?

The landlord is liable for any injuries resulting from negligent repairs or the appearance of safety.

What is the Public Use Rule in landlord's tort liability?

A landlord who leases public space and knows the tenant will not repair defects (due to the nature of the space and short lease) is liable for any defects that cause injury to members of the public.

What is the landlord's duty under a short-term lease of a furnished dwelling?

The landlord is under a stricter duty and is liable for any defective condition that injures a tenant, even if they were unaware of the defect.

What is the modern trend regarding a landlord's duty of care toward residential tenants?

Many courts now hold that a landlord owes a general duty of reasonable care toward residential tenants and can be held liable for ordinary negligence if they had notice of a defect and an opportunity to repair it.

Is a landlord liable for defects arising after a tenant takes possession?

Generally, no, unless the landlord knew or should have known of the defects that arose after the tenant took possession.

Can a landlord be liable for failing to repair when they have a statutory duty to do so?

Yes, if the landlord has a statutory duty to repair (e.g., housing codes), they are liable in tort for injuries resulting from their failure to repair or negligence in making repairs.

When might a landlord be liable for tenant injuries caused by third-party criminal conduct?

Some courts hold landlords liable if they failed to comply with housing code security provisions or failed to maintain ordinary or advertised security measures (e.g., surveillance cameras).

What is the tenant's liability regarding duty of care to third persons?

The duty of care owed by a tenant to third persons is discussed in the Torts outline, and tenants, as occupiers of land, have certain duties to third parties.

What is a fixture?

A fixture is a chattel that has been affixed to land, becoming part of the realty and passing with the ownership of the land. It must stay put.

What are two ways to tell if a chattel is a fixture?

1) If the item is incorporated into the realty, losing its identity (e.g., bricks, concrete), it is a fixture.

2) If its removal would cause considerable damage to the premises (e.g., plumbing, heating ducts, a furnace), it is a fixture.

What is a common ownership case?

A common ownership case occurs when the person who brings the chattel to the land owns both the chattel and the land, such as when a homeowner installs a furnace in their home.

How is it determined if an item in a common ownership case is a fixture?

The intention to make the item part of the realty is determined by the nature of the article, the manner of attachment, the amount of damage removal would cause, and the adaptation of the item to the use of the realty.

What is a divided ownership case?

A divided ownership case involves a chattel that is brought to the realty by someone other than the landowner, like a tenant, licensee, or trespasser.

In a landlord-tenant scenario, how is it decided if an annexed chattel is a fixture?

An agreement between the landlord and tenant controls. Without an agreement, the tenant may remove annexed chattels if removal does not substantially damage the premises and must do so by the end of the lease term.

What are the rules for removing annexations in the life tenant-remainderman context?

The same rules as landlord-tenant apply, but the life tenant's representative may remove annexations within a reasonable time after the life tenant's death.

How are licensees and trespassers treated with respect to fixtures?

Licensees are treated like tenants, while trespassers normally lose their annexations. However, some courts allow a good faith trespasser to recover the value added to the land.