When Silence Is Not Golden

While reasonable consent clauses are common, leases do not always define, or provide examples of, circumstances where it will be “reasonable” for the landlord to withhold consent to a proposed assignment or sublease. As a result, the landlord may be more vulnerable to judicial challenge by the tenant if it withholds consent to a particular assignment or sublease. In the event of such judicial challenge, it is likely that the court's definition of “reasonable” will be significantly narrower than the landlord's. Where the landlord withholds consent for reason(s) not recognized as “reasonable” by the court, depending on the circumstances, the tenant may have the right to terminate the lease, to force the landlord's consent pursuant to a declaratory action, to realize other equitable relief and/or to recover damages. This article: 1) sets forth the general legal principles applicable to anti-assignment clauses; 2) describes the factors typically recognized by courts as reasonable grounds for the landlord's withholding of consent; 3) gives examples of cases where the landlord was found to have unreasonably withheld consent; and 4) taking into account the factors that are actually considered by landlords, provides some guidance on how to minimize the landlord's exposure to judicial challenge of its withholding of consent where a reasonable consent clause is included in a lease.