Brief Fact Summary. A residential lease prohibited the assignment and sublease of property without the written consent of the landlord. A tenant allowed someone to live on the property without the landlord’s consent.
Synopsis of Rule of Law. In a residential lease, a lease provision requiring the landlord’s consent to an assignment or sublease permits the landlord to refuse arbitrarily or unreasonably.
This rule, however, has been under steady attack in several states in the past twenty years; and this for the reason that, in recent times, the necessity of reasonable alienation of commercial building space has become paramount in our ever-increasing urban society.View Full Point of Law
Issue. In a residential lease, does a tenant’s obligation to obtain the written consent of the landlord before assigning or subletting the lease impose an obligation on the landlord to act reasonably in withholding consent?
A lease provision requiring the landlord’s consent to an assignment or sublease permits the landlord to refuse arbitrarily or unreasonably. Most cases holding otherwise are limited to commercial leases.
In a rent control jurisdiction, like in this case, there is little economic incentive to withhold consent in the residential lease context because a landlord has limited control over the rent that can be discharged. This distinguishes residential leases from commercial leases.
There is not a necessity of reasonable alienation of residential building space that requires the imposition of a reasonableness requirement on residential landlords that they have not agreed to. The legislature is free to address this issue further.
Discussion. In a rent-controlled jurisdiction, there is no economic reason for a residential landlord to withhold consent to an assignment or sublet, so since there will be no unfair financial gain, there is no reason to impose reasonableness requirements on landlords when they create a lease.