Real Property – Landlord and Tenant – Need for Lessee Who Transfers Whole Term to Base Right of Re-Entry on Condition of “Substantial Advantage” to Him
Plaintiff lessee transferred his interest in the first floor and basement of certain commercial premises for the full remaining period of his own lease, retaining his interest in the second floor, where he lived. This transfer was in form a sublease, under which plaintiff as sublessor reserved power to cancel the sublease and take possession without notice if the premises were used for any purpose other than an off-sale liquor store. Plaintiff’s transferee later assigned all his interest to defendant corporation, which immediately began converting the premises into an ice cream store. After defendant had spent over $10,000 in remodeling, plaintiff gave notice that he considered the lease violated, and brought an unlawful detainer action to recover possession. The trial court found for plaintiff. On appeal, held, reversed, with direction to enter judgment for defendant. A sublessor who transfers all or part of the premises for the full term may reserve a right of re-entry for failure to perform covenants or conditions in the sublease.1 This rule applies, however, only if such covenants or conditions contain undertakings of substantial advantage to the sublessor. Kostakes v. Daly, (Minn. 1956) 75 N. W. (2d) 191.