Bar Exam (US) Property: Harry is the owner in fee simple of a tract of land on which is situated...

Question

Harry is the owner in fee simple of a tract of land on which is situated a large office building. Harry leases the land and building thereon to Tony for a term of seven years, commencing on August 1, 1994, and terminating at midnight on July 31, 2001. The lease contains the following provisions:

"(1) Tony covenants not to assign the leased premises without the consent of Harry;

(2) Tony covenants to pay the rent of $750 per month on the first day of each month;

(3) Tony covenants to keep the leased premises in repair;

(4) Tony covenants to keep the building on the leased premises insured against fire in the amount of $100,000; and

(5) Harry covenants to utilize any fire insurance proceeds for repair or replacement only."

After three years of the lease had expired, Tony, without the consent of Harry, assigned the entire balance of the lease period to Rick, who took immediate possession of the leased property. Harry accepted rental payments from Rick. Then in 1998, Rick assigned his leasehold interest to Simon. Simon went into possession, but failed to pay any rent for two months. Soon afterwards, a fire spread from an adjoining building to the leased property, completely destroying the building thereon.

It was established that the owner of the premises on which the fire started had failed for several years to comply with the municipal Fire Code measures applicable to his building. While Tony was in possession of the leased property, he carried a fire insurance policy on the premises in the amount of $100,000. However, Tony allowed the policy to lapse after his assignment to Rick. Rick did carry insurance on the leased building, but only in the amount of $50,000. When Simon took possession of the building, he did not obtain any fire insurance.

Assume for the purposes of this question only that Harry, after learning of Rick's assignment to Simon, brings suit against Rick to have the assignment declared void. Harry will most likely

AnswerChoose the correct answer.Choose all that apply. Correct Partially correct Incorrect Don't Know

  1. A
    Correct Answer
    succeed, since the original leasehold agreement prohibited assignments
  2. B
    Correct Answer
    succeed, since the covenant prohibiting assignments did not run with the land
  3. C
    Correct Answer
    not succeed, since in accordance with the Rule in Dumpor's Case, where the landlord consents to one transfer, he waives his right to avoid future transfers
  4. D
    Correct Answer
    not succeed, since the privity of estate between Rick and Harry terminated when he assigned the leasehold to Simon
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