Legalese Explained: Obligations Of A Lease Assignment And “Covenants Running With The Land"

If you are a tenant and you assign your house lease to somebody else (a “third party”), your assignment of your lease contract does not relieve you of your obligations to the original landlord. If, for example, you assign your lease to Ralph and Ralph doesn’t pay the rent, the landlord can come after you for the money even though you don’t live there anymore. Whether she can come after Ralph or not (she may want to if Ralph has more money than you do) depends on the nature of the obligation. In the case of rent payment, she probably cannot come after Ralph for the money, but if she hits you up for the rent, then you can turn around and sue Ralph for it.

But let’s say you have an obligation to keep the house in good repair, and the landlord stops by and sees that the place is falling down because Ralph is a Rastifarian and does nothing but party 24 hours a day. The landlord can then sue either one or both of you for the cost of repairs, because in most states the obligation to repair is considered a “covenant running with the land”, which means that Ralph doesn’t have to have a lease contract directly with the landlord in order to have an obligation to repair the house. By the way, you can come after Ralph the Assignee for any of the lease contract obligations that you assigned to him, even if the landlord can’t. So if he doesn’t pay the rent, then sue the sucker.

Which covenants (promises) do and do not “run with the land” (as opposed to running with the lease contract only) varies from state to state, but they are reasonably consistent with each other. For example, a promise to insure the house does not run with the land in most states and thus cannot by enforced by a landlord against an assignee. Keep in mind, though, that if in the assignment agreement with the original tenant Ralph “assumes” the obligations of the tenant’s lease contract with the landlord, then Ralph will be obligated to the original landlord for all of the tenant’s obligations, including insurance. So if you were Ralph, you’d want to be very careful about the presence of the word “assume” in your assignment agreement with the original tenant. Don’t just “assume” that it means the same thing in Legalese as it does in English (ha ha!).

But let’s suppose that it is the landlord who has promised in the lease contract with the original tenant to insure the property against fire, the tenant assigns the lease contract to Ralph the Rastifarian, and the landlord lets the insurance lapse. Even though the landlord couldn’t force Ralph to insure even if insurance had been the tenant’s obligation in the original lease, if insurance is the landlord’s duty then Ralph CAN force the landlord to insure the house, even though the landlord has never signed a contract with Ralph and may not even know who he is. That is precisely why most landlords write their lease contracts to expressly forbid assignments by the tenant to a third party, especially a partyin’ third party like Ralph.

DISCLAIMER: The following is intended for reference only and does not constitute legal advice.

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