Dayenian v. Am. Nat'l Bank & Tr. Co.

91 Ill. App. 3d 622, 47 Ill. Dec. 83, 414 N.E.2d 1199 (1980)

 

RULE:

An assignment of a lease occurs where the lessee transfers the entire unexpired remainder of the term created by his lease. In other words, in an assignment one transfers his whole estate without reserving a reversionary interest to himself, and a privity of estate is immediately created between his transferee and the original lessor. But if the transferor retains or reserves any reversionary interest, the privity of estate between the transferee and the original lessor is not established and there is no assignment.

FACTS:

After entering into the lease of a unit in an apartment building, the plaintiff lessee assigned her interest in the lease to the assignee. The defendant development company mailed the assignee a notice of intent to convert the apartment building into a condominium, in compliance with § 30 of the Condominium Property Act, Ill. Rev. Stat. ch. 30, para. 330(a) (1979), and Chicago, Ill., Mun. Code § 100.2-6C (1979). Those sections gave a "tenant" the right of first refusal to purchase the apartment. The assignee never responded, and the development company sold the unit to another party. Plaintiff lessee brought an action for specific performance against defendants to compel the conveyance of a condominium unit to her. The trial court granted summary judgment for defendants, and the lessee appealed. The court affirmed.


ISSUE:

Was the transaction between the plaintiff and the assignee a sublease?

ANSWER:

No.

CONCLUSION:

The transaction between the lessee and the assignee was an assignment and not a sublease. The lessee transferred the entire remainder of her estate and did not retain any reversionary interest. Therefore, the lessee was not a tenant at the time notice to convert was given and had no right of first refusal.

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