## Facts

- Ursula Dayenian leased an apartment in Chicago from Monticello Realty Corporation under a written two-year lease.
- During the lease term, Dayenian executed a written instrument titled “Assignment” stating that the “Lessee hereby assigns all the Lessee’s right, title and interest in and to the within lease … unto W. Carlton Lambert.”
- Lambert signed an “Acceptance of Assignment.”
- Monticello Realty Corporation provided written consent to the transfer.
- The assignment documents stated that Dayenian was not released from liability under the lease (including obligations such as rent).
- Lambert took possession of the apartment after the transfer.
- A developer, 900/910 Lake Shore Drive Development Company (Lake Shore), planned to convert the building into condominiums.
- Pursuant to an Illinois condominium-conversion law requiring notice and a right of first refusal for the “tenant at the time,” Lake Shore sent Lambert (not Dayenian) a notice of intent to convert that included a right of first refusal to purchase the unit.
- Lambert did not wish to buy the unit and did not exercise the right of first refusal.
- Lake Shore sold the unit to a third party.
- Dayenian claimed she remained the “true tenant” and that her transaction with Lambert should be treated as a sublease rather than an assignment.
- Dayenian sued Lake Shore and its trustee, American National Bank and Trust Company of Chicago, seeking specific performance—an order requiring defendants to sell the condominium unit to her.
- The trial court granted summary judgment to defendants, and Dayenian appealed.

## Issues

1. Whether Dayenian’s transfer to Lambert was an assignment or a sublease for purposes of identifying the “tenant at the time” entitled to the statutory right of first refusal upon condominium conversion.
2. If the transfer was an assignment, whether Dayenian could enforce the statutory right of first refusal through specific performance.

## Decision

- The appellate court affirmed summary judgment for defendants.
- The court held the transaction was an assignment, not a sublease, because the instrument transferred Dayenian’s entire “right, title and interest” in the lease to Lambert and he took possession.
- The court rejected the argument that Dayenian’s continued contractual liability to the landlord prevented the transfer from being an assignment.
- Because Lambert was the tenant in possession when the statutory notice of intent to convert was sent, Lambert—not Dayenian—held the statutory right of first refusal.
- Since Lambert did not exercise the right and the unit was sold to a third party, Dayenian had no enforceable statutory purchase right and could not obtain specific performance.

## Legal Principles

- A tenant’s transfer of the entire remaining leasehold interest is an assignment; a transfer of less than the entire remaining term (retaining a reversion) is a sublease.
- Courts determine whether a transfer is an assignment or sublease by the substance of the interest conveyed and the right to possession and control, not merely by the label used in the document.
- An original tenant may remain liable on the lease contract after an assignment; continued liability does not mean the tenant retained the leasehold estate.
- Statutory condominium-conversion rights granted to the “tenant at the time” of notice run to the tenant who then holds the leasehold interest and is in possession (including an assignee recognized through the transfer and landlord consent).
- Specific performance requires a valid enforceable right; a plaintiff who is not the statutory rights-holder cannot compel a conveyance based on that statute.

## Conclusion

Dayenian’s written transfer to Lambert was an assignment that passed the leasehold to Lambert, and her continued liability did not change that result. Because Lambert was the tenant in possession when the condominium conversion notice was issued, he alone received the statutory right of first refusal; his decision not to exercise it left Dayenian without any statutory purchase right to enforce, so summary judgment for the developer and trustee was properly affirmed.


Dayenian v. American National Bank and Trust Co. of Chicago, 414 N.E.2d 1199 (1980)