It is settled legal principle that the rights of a subtenant under a sublease are directly tied to the rights of a tenant under the applicable master lease, so that if the master lease is terminated for any reason, the subtenant’s rights under the sublease are likewise extinguished. However, Connecticut law provides a slight divergence from this premise. Under a longstanding law, the “voluntary surrender” of a master lease by a tenant (where “voluntary” is defined as any case other than the landlord’s enforcing a right to terminate in accordance with the lease) would not necessarily extinguish the sublease. Rather, the subtenant’s right of occupancy would endure, and it would then become the direct tenant of the master landlord under the same terms of the sublease.

A recent Connecticut Supreme Court decision has now attempted to further clarify the contours of the term “voluntary surrender” under this context. In Getty Props. Corp. v. ATKR, LLC, 2015 Conn. LEXIS 4 (Jan. 27, 2015), a consolidation of multiple eviction cases involving gasoline service stations, which included layers upon layers of subtenants and sub-subtenants as parties, one of the main issues determined by the court was whether the rejection of a master lease by the primary tenant, who is in bankruptcy, should be permitted to terminate the rights of subtenants who were now under eviction proceedings. The court, while noting that ordinarily a tenant’s rejection of a lease constituted a “voluntary surrender,” ruled that in this case no such voluntary surrender was effectuated because the record was replete with evidence regarding the tenant’s monetary default of the master lease, which provided the landlord with the legal basis to terminate the lease and serve the subtenants with notices to quit. Moreover, the court determined that the conduct of the parties “did not evince an intent to treat rejection of the master lease as a voluntary surrender.” The subtenant’s argument that the mere rejection of the lease should have been tantamount to a “voluntary surrender” was rejected by the court.

In disagreeing with the subtenant’s argument, the court elaborated on its previous decisions on this issue (notably, the seminal case of Bargain Mart, Inc. v. Mordechai Lipkis, 1989 Conn. LEXIS 191): it reasoned that because the tenant in Getty had defaulted on its obligations under the lease prior to its rejection of the master lease in bankruptcy (that is, while the tenant was going through bankruptcy), coupled with the fact that no provision of the sublease provided any protection to the subtenant in the event of the termination of the master lease due to the tenant’s default, these factors provided the court with sufficient basis to conclude that the rejection of the master lease in bankruptcy by the tenant cannot possibly be tantamount to a voluntary surrender that would otherwise have afforded the subtenant an opportunity to maintain its sublease unimpaired.

The real purport of Getty is that a tenant’s voluntary rejection or surrender of the master lease – be it in bankruptcy or otherwise – is not sufficient to trigger a claim that the subtenant’s rights under the sublease should be preserved and not extinguished. According to the court, the determination of whether a surrender or rejection of a master lease operates as a voluntary surrender “will be tied to the particular circumstances of each case,” including whether the landlord duly exercised its rights of termination under the master lease.

This decision does not provide any solace whatsoever to subtenants – even model ones that have abided by all obligations under their respective subleases. In order to prevent the forfeiture of its sublease, a subtenant must prove that the voluntary surrender by the sublandlord had not been preempted by a default of the master lease, or that the sublease contains a provision that allows for the sublease to continue unimpaired – even in the event of a default by the sublandlord (the latter necessarily requiring the landlord’s consent). This is difficult for any subtenant to meet. Advantage, landlord.