Assignments and Subleasing

Question 1

Assignment

Answer 1

An assignment from a tenant (T) to a 3rd party (T1) is an entire transfer of all of T’s interest to T1

Question 2

Sublease

Answer 2

A sublease, instead of a transfer of all of T’s interest entirely, is a whole new legal relationship between T and T1

Question 3

General Rule for Assignment and Subleasing

Answer 3

If a tenant transfer a right to possess the premises to a third party for the entire remaining lease term, that will be considered an assignment. If the tenant only transfers part of the remaining term, then it is a sublease

Question 4

What happens when T assigns his interest to T1 and T or T1 fails to pay rent?

Answer 4

Landlord can recover from either T or T1:

Landlord can recover from T because they still have privity of contract

Landlord can recover from T1 because they are now in privity of estate

But landlord cannot recover from both at the same time - only 1

Question 5

What happens if T subleases to T1 and T or T1 fails to pay rent?

Answer 5

Landlord can recover from T

If T1 fails to pay, and T cannot be found, then the landlord is out of luck because T1’s obligation is to pay T. There is no privity between L and T1.