Bar Exam — MBE (Multistate Bar Exam)Real PropertyMedium
A tenant rented an apartment under a two-year lease. Six months into the lease, the tenant assigned the lease to a new tenant (assignee) with the landlord's consent. The assignment agreement stated that the assignee would be solely responsible for all future rent payments and lease obligations. Three months later, the assignee defaulted on rent. The landlord sued the original tenant for the unpaid rent. Is the original tenant liable for the unpaid rent?
- ANo, because the landlord consented to the assignment, implying a release of the original tenant.
- BYes, but only if the assignment agreement did not explicitly state the assignee was 'solely responsible.'
- CNo, because the assignment relieved the original tenant of all liability.
- DYes, because the original tenant remains in 'privity of contract' with the landlord, even after assignment, unless there is a novation.
Show answer & explanationAnswer & explanation
Correct answer: D. Yes, because the original tenant remains in 'privity of contract' with the landlord, even after assignment, unless there is a novation.
Upon assignment of a lease, the original tenant remains in privity of contract with the landlord, meaning they are still contractually liable for the rent unless the landlord expressly releases them (a novation). While the assignee is in privity of estate, the original tenant's contractual obligations persist.
Why the other options are wrong
- A. Consent to an assignment does not automatically imply a release of the original tenant's contractual obligations.
- B. Even with such a clause, the original tenant's privity of contract with the landlord generally keeps them liable unless released by novation.
- C. Assignment typically does not relieve the original tenant of all liability without a novation.
Assignment of Lease (Original Tenant Liability)
Upon assignment of a lease, the original tenant generally remains liable to the landlord under 'privity of contract' unless the landlord explicitly agrees to a novation.
- Original tenant retains contractual liability.
- Assignee becomes primarily liable to landlord under 'privity of estate'.
- Novation is required to fully release the original tenant.
Memory trick: Original Tenant = Contract Chain