Subletting Does Not Release Tenant From Lease: Orchard Shopping Center, Inc. v. Campo, 138 Ill. App. 3d 656

Facts: What Happened in Orchard Shopping Center, Inc. v. Campo?

• Mr. Hillyard and Mr. Campo signed a 5-year lease with Orchard Shopping Center.
• The written lease said that it "contains the entire agreement between the parties and executory agreement made hereafter shall be ineffective to change, modify, or discharge lease in whole or part, unless it is in writing and signed by the parties".
• Mr. Campo signed a sublease agreement with Mr. Rimar for the remainder of the 5-year lease term. Mr. Rimar, who was current on rent, later cancelled the sublease agreement by using the 7-day notice option in the sublease agreement. Mr. Campo did not pay rent after Mr. Rimar left.
• Since Mr. Hillyard passed away, Orchard Shopping Center sued Mr. Campo and Mr. Rimar for unpaid rent.

Issue: What Question Did the Court Need to Answer?

• Was Mr. Campo released from all liability of rent after Mr. Rimar signed the sublease agreement?
• Is Mr. Rimar still responsible for unpaid rent if he had a sublease?

Rule: What Do the Laws Say About This Situation?

• An "assignment" happens when the original tenant transfers all interest in the lease to the transferee. Danaj v. Anest, 77 Ill. App.3d 533 (1979).
• The option to terminate a sublease agreement means that the original tenant still has an interest in the lease. Then, the agreement is a sublease rather than an assignment. Indian Refining Co. v. Roberts, 97 Ind. App. 615, 617 (1932).

Analysis: What Did the Court Decide?

• NO. Mr. Campo was not release from liability. He did not assign (or "switch") full responsibility to Mr. Rimar.
• NO. Because Mr. Rimar used the option to terminate the sublease agreement on a seven-day written notice, the original tenants still kept some interest in the lease. The agreement was a sublease not an assignment.

Conclusion: What Can We Learn From This Case?

In this case, Mr. Campo was held responsible for the unpaid rent. If the other original tenant (Mr. Hillyard) had not passed away, he would also have been held liable for the past-due rent.

If you let someone rent a place you're renting, it doesn't mean you're off the hook for paying the rent. Even if the person you let in (sublease) doesn't pay, you might still have to. Unless the landlord agrees to switch who they deal with from you to the new person, you're still on the hook for the rent if the new person doesn't pay.