In a typical sublease, which statement is correct regarding liability to the landlord?

• A. Sublessee is not liable to landlord because there is no privity of estate.
• B. Sublessor remains liable to landlord.
• C. Sublessee becomes liable to landlord due to privity of estate.
• D. Subleshee automatically assumes all covenants of the lease.

Answer: (A)

In a sublease, liability to the landlord hinges on privity of estate. Privity of estate means a direct, ongoing interest in the leased property that lets the landlord enforce covenants against the current holder of the leasehold. The landlord has privity of estate with the person who holds the master lease—the original tenant (the sublessor). The sublessee, however, derives their rights only from the sublessor through a separate sublease; they do not hold a lease directly from the landlord and therefore do not have privity of estate with the landlord.

Because there’s no privity of estate between the landlord and the sublessee, the sublessee isn’t directly liable to the landlord under the master lease. The sublessor remains liable to the landlord for performance of the lease covenants, including rent. If the sublessee breaches, the landlord’s remedy is typically against the sublessor, not the sublessee, unless there’s a separate contract or novation that creates liability to the landlord.

The sublessee’s obligations are to the sublessor under the sublease, not to the landlord, and there’s no automatic transfer of all lease covenants to the sublessee simply because a sublease exists.