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39. If the court rules that the sublessee is not liable to the landlord for the unpaid rent, what will be the most likely reason?
There is no applicable statute.
Although the sublessee made timely rent payments to the tenant, the tenant did not forward four of those payments to the landlord. The tenant has left the jurisdiction and cannot be found. The landlord has sued the sublessee for the unpaid rent.
A landlord leased a building to a tenant for a 10-year term. Two years after the term began, the tenant subleased the building to a sublessee for a 5-year term. Under the terms of the sublease, the sublessee agreed to make monthly rent payments to the tenant.
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A is incorrect. In a sublease, the tenant transfers a right of possession for a time shorter than the balance of the leasehold. Therefore, the sublessee and the tenant are in privity of estate with each other, but only the tenant remains in privity of estate with the landlord. There also is no privity of contract between the sublessee and the landlord, because the sublessee made no promise, either to the landlord or to the tenant, to pay rent to the landlord. Lacking privity, the sublessee is not liable to the landlord for the rent and also is not a surety for the tenant.
B is incorrect. A novation occurs when a tenant seeks to avoid future liability for rent after an assignment and the landlord agrees to release the tenant from such liability. An assignment occurs when the tenant transfers the entire period of time remaining on the lease agreement. Here, the tenant only transferred a portion of the remaining time on the lease agreement, and the tenant did not seek a release or novation from the landlord.
D is incorrect. The sublessee had no obligation to pay rent to the landlord. In a sublease, the tenant transfers a right of possession for a time shorter than the balance of the leasehold. Therefore, the sublessee and the tenant are in privity of estate with each other, but only the tenant remains in privity of estate with the landlord. There also is no privity of contract between the sublessee and the landlord, because the sublessee made no promise, either to the landlord or to the tenant, to pay rent to the landlord. Lacking privity, a sublessee is not liable to the landlord for the rent. Although privity may not be required under an equitable servitude theory, a finding for the sublessee would mean that the court did not use such a theory.