In a New York residential building with four or more units, what is true after a sublease?

• A. The landlord remains in privity of K and estate with the subtenant.
• B. The landlord is in privity of K with the subtenant only.
• C. The landlord and the tenant are in privity of K and estate, and the tenant and subtenant are in privity of K and estate; there is no direct relationship between landlord and subtenant.
• D. There is no privity of any kind between any parties after sublease.

Answer: (C)

Privity of contract and privity of estate determine who can sue whom and who owes what after a sublease. In a New York residential building, the landlord and the original tenant are in privity of contract because the lease is a contract between them, and they’re in privity of estate because both have a present interest in the property during the lease term.

When the tenant sublets, a new contract arises between the original tenant (the sublessor) and the subtenant, so they are in privity of contract with each other. The subtenant also holds a leasehold interest created by the sublease, giving them privity of estate with the sublessor. But the landlord does not enter into a direct contract with the subtenant, nor do they have a direct estate-based relationship with the subtenant, unless a separate agreement or novation brings them into privity.

So the landlord remains in privity of contract and estate with the original tenant, and the original tenant and the subtenant are in privity of contract and estate with each other, with no direct privity between the landlord and the subtenant. This is why the correct statement describes a direct landlord–tenant relationship unchanged, a direct tenant–subtenant relationship created by the sublease, and no direct landlord–subtenant relationship.