B. The Lease is a conveyance (property law applies, i.e. estates) and a contract (K law applies)
1. Privity = relationship – the parties to a lease have privity of estate and privity of contract because they have a relationship in estate and a relationship in contract through the terms of the lease (assuming there is one)
a. Privity of Estate
i. Exists between parties that have separate interests in the same property
ii. If you assign all your interest in a property you are no longer in privity of estate with the other interest holders
iii. Covenants that run with the land run with privity of estate
b. Privity of Contract
i. No contractual relationship = no privity of contract
ii. Duties from a contract are assignable
iii. Obligations under a contract are not assignable
1. When a tenant assigns his entire interest to a third party, the original landlord can collect rent only from the original tenant, b/c privity of contract does not exist between the landlord and the third party tenant.
iv. Obligations under a contract are assumable, but must be expresses assumptions
1. When a tenant assigns his entire interest in the lease, and the third party assumes the obligation, the landlord has privity of contract with both tenants, and only a release of the original tenant by the landlord ends the landlords ability to collect from the original tenant
We have located some similar legal questions and legal question categories. Check out these challenging questions that askquestions about Real Estate Contracts and are similar to How is Lease a Conveyance and a Contract?. Also, we have included a list of some of our more popular legal question categories. These categories are based on what everyone is asking and answering.