Legal speak can sound much like gobbledygook, and many of us simply ignore the terms that are bandied about. What do they even mean? Privity is one such legal term, but if you’re involved in a landlord/tenant relationship, it’s time to take a closer look.
Privity
Privity refers to a direct, close, or successive relationship, which incorporates mutual interests and rights, such as a landlord/tenant relationship. The law that governs landlord/tenant relationships allows both landlords and tenants privity of contract and privity of estate.
Privity of Contract
Privity of contract allows either party in a contract to enforce the promises made by the other party. When you rent from a landlord, for example, you are both in privity of the promises set forth by the contract (or lease). If you’re owed the duty of repairs on the property you rent, you have the right to enforce this repair promise. If your landlord, however, hires a contractor to make the repairs and that contractor fails to comply, you have no privity of contract with the contractor and, thus, have no legal right to seek recovery from the contractor. Both the landlord and the contractor, however, have privity of contract with each other.
Privity of Estate
Privity of estate allows both you and your landlord to enforce those promises that are connected to the substance and the concerns of the premises. These promises must relate directly to the use, occupation, or enjoyment of the premises.
For example, your landlord can sell or pass the property you rent to a successor, and that successor will then have privity of estate with you and will be able to continue to enforce the provisions outlined in your contractual lease – including your obligation to make specified repairs, to pay rent, to purchase insurance, and to pay taxes. As a tenant, on the other hand, you will have the right to enforce the contractual promises of the successor. These include your right to enjoyment of the property, to tenant’s option rights, to rights of exclusivity, and to rights of extension.
Assignment of Lease
If you, as the tenant, go on to assign your lease to someone else, privity can become an important issue. If the assignee doesn’t assume the lease and if your landlord is unaware of this assignment, the landlord and the assignee will have no privity with each other and neither will be able to enforce the contractual promises of the other. Typically, lease contracts include default terms for such occurrences, but that isn’t always the case.
Sublease
If you were to sublease the property you rent – and thus reassign less than the premise’s entirety to an assignee – your landlord and the assignee would have no privity with each other. You and your assignee, however, would have mutual privity, and it would remain your responsibility to enforce any lease provisions against your landlord (and vice versa).
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The legal obligations that govern the landlord/tenant relationship are complicated – seek the experienced professional counsel of a landlord tenant lawyer. At John L. Schettino law, we have the skill, knowledge, and commitment to help you efficiently and favorably resolve your landlord/tenant disputes. Please contact or call me at 201-498-9768 for a free consultation today.