PROPERTY (Section 1)
Spring Semester 2013

Transfer of the Leasehold Estate
Reading Assignment: Pages 417-431

1. The lease in Julian v. Christopher stated that the premises could not be assigned or sublet "without the prior written consent of the landlord." The tenants did not obtain that consent. Why shouldn't that result in a decision in favor of the landlord? What would be the "legitimate grounds" on which the landlord could withhold consent to an assignment or sublease?

2. Consider this hypothetical: L and T entered into a 10-year lease for office space back in 2008. The premises is located on the 50th floor in a 60-story office tower. The lease provides that T is obligated to pay $20,000/month in rent. Now, in 2013, T's business has now outgrown this space, and T wants to assign its leasehold estate to X for the rest of the lease term. Because the fair rental value of the property is now $25,000/month (market rental values are booming due to local population and economic growth), X has agreed to pay T a lump-sum payment of $150,000 cash for T's leasehold estate, and T will take over making the monthly rental payment due to L. X would make the same type of general office use that T had been making, and X is a Fortune 500 company with a AAA credit rating.

The lease provides that "T may not assign or sublet the premises without the prior written consent of L." When T asks L for consent to the proposed assignment to T, L refuses and says L will not consent unless X agrees to begin paying rent at the rate of $25,000 per month. Is this case identical to Julian v. Christopher? Why or why not? How would you argue the case if you were representing L? T?

3.  Consider the problems in note 3(a) on page 422. Would landlord's refusal to consent be considered "reasonable" under a provision that required that landlord would not unreasonably withhold consent?

4. On January 1, 2011, L leased an apartment to T for a 3-year term, at a rental rate of $500/month. T immediately took possession of the apartment. Six months later, T was transferred to another city. T assigned her leasehold estate to T1, who immediately took possession of the apartment. On January 1, 2011, T1 assigned her leasehold estate to T2. Although T2 took possession of the apartment, neither T2 nor anyone else had paid rent to L since December 1, 2012. There is now $2,000 in rent that has accrued but remains unpaid. L wants your advice. From whom can L recover the $2,000? From T? From T1? From T2? Why?

5. In problem 4, suppose that the transfer from T to T1 was structured so that T transferred to T1 the right to possession until December 30, 2013. How would this change your answer, if at all, to the questions in problem 4?

6. Assume that the lease in problem 4 contained a no-transfer clause. What advice would you give to L when T seeks to assign or sublet the premises to T1?

7. In the Ernst v. Conditt case, the original tenant (Rogers) and the transferee (Conditt) characterized their agreement as a "subletting." Why doesn't the court characterize their agreement as a sublease? Is the intent of Rogers and Conditt relevant or irrelevant? If it is relevant, why not treat the language they use as determinative of their intent? Can you explain why, in this circumstance, the parties might specifically have intended for this arrangement to be only a sublease and not an assignment?