We're discussing landlord-tenant relationships today in Property. One of the problems we tackled yesterday (and are tackling today) has the following fact pattern:
L leases to T for a term of three years at a monthly rent of $1,000; in the lease T covenants to pay the rent in advance on the first of each month and also covenants to keep the leased premises in good repair. Six months later T assigns her entire interest to T1, who agrees in the instrument of assignment to "assume all the covenants in the lease" between L and T; three months later T1 assigns his entire interest to T2, and three months after that T2 assigns his entire interest to T3. T3 defaults on rent payments and fails to keep the premises in good repair.
Our class discussion focused on the concepts of privity of contract and privity of estate. We found that there was a privity of contract between L and T1 because T had assigned not only his possessory interest, but also his covenants, to T1 by contract. The sort of privity of contract between L and T1 arise out of L's status as a third party beneficiary of the contract between T and T1. There is also a privity of estate between L and T3. Thus, T1 and T3 are liable to L.
In further discussion, we drew some diagrams of triangular relationships between a landlord, and tenant, and a tenant's assignee. So I decided to get creative, and substituted a few words in the lyrics to New Order's Bizarre Love Triangle:
Every time I think of you
I feel shot right through with a bolt of blue
It's no problem of mine but it's a problem I find
Having a lease that I can't leave behind
There's no sense in telling me
The wisdom of a fool won't set you free
But that's the way that it goes
And it's what nobody knows
While every day my confusion grows
Every time I see you leasing
I get down on my knees and pray
I'm waiting for that final moment
You'll say the words that I can't say
I feel fine and I feel good
I'm feeling like I never should
Whenever I get estate, I just don't know what to say
Why can't we have a contract like we did yesterday
I'm not sure what this could mean
I don't think it's what it seems
I do admit to myself
That if I sue someone else
Then I'll never see this kind of privity
Every time I see you leasing
I get down on my knees and pray
I'm waiting for that final moment
You'll say the words that I can't say
Happy Friday!
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