Hypothetical - This hypothetical assumes that Venable leased a storefront to Schumann for 10 years, reserving a rent of $5,000 per month, which Schumann promised to pay.

Three years later, Schumann sold his store business to Cobbler, assigning the lease to the premises.

(Note: As is the case with most of our hypotheticals regarding Property, the use of visuals greatly enhances the ability to understand the facts and the rules. Please refer to our free Property Advisor course for examples.)

.................................................................................................................
This content is drawn from our Property tutorials on Landlord / Tenant, which contain numerous hypotheticals. If you find this content helpful, you might want to try our free Property Advisor Course. You will need to register for our free account. It's fast, easy and, of course, free.
.................................................................................................................

Question - True or false—Schumann continued to have a duty to pay rent based on privity of contract, but not based on privity of estate.

Answer and Explanation - True. Contract duties cannot be assigned, and when they are delegated, the assignor remains liable.

However, the “privity of estate” basis for owing rent is based on the idea that the tenant, by virtue of possession, receives value (“rent”) rising up out of the land and that part of that value (in this case $5000 per month) has been in part reserved by the landlord.

Since the assignor no longer has the possession, he no longer receives such value. The assignee (transferee) does. Therefore, only the assignee is liable to pay the reserved rent.

The Law School Experience - These and related topics are covered in our tutorials on Property.

To explore some of our free materials, go to The Law School Experience.