1250 Broadway, 27th Floor New York, NY 10001


Absent some prohibition or restriction, most contracts -- including commercial leases -- are freely assignable.*  As a result, lease forms will typically discourage transfers of all or part of a tenant's space to another, without the owner's consent.  In the commercial context, this prohibition tends to be stringently enforced (and, if violated, can result in a tenant's eviction).

Foreseeing problems with such an unconditional restraint, savvy tenant representatives will request (during the initial lease negotiation process) that the form be modified to allow for assignments and subletting of the space subject to the owner's consent, which will "not be unreasonably withheld."  When this latter language exists, the basis upon which a landlord may decline a subleasing or assignment request is circumscribed.

By way of example, in Logan & Logan, Inc. v. Audrey Lane Laufer, LLC., the tenant sued in the Suffolk County Supreme Court to compel its landlord to agree to the assignment of its commercial lease.  Although the Supreme Court granted the tenant's prayer for summary judgment -- a disposition of the case on papers, or motion practice -- the Appellate Division, Second Department, reversed.  In addition to finding "issues of fact," which warranted a formal hearing or trial, the appellate court's decision succinctly outlined the following considerations of pertinence:

When a commercial lease provides that the landlord will not unreasonably withhold consent to its assignment, the landlord may refuse to consent to an assignment based only on "consideration of objective factors, such as the financial responsibility of the [proposed assignee], the [proposed assignee's] suitability for the particular building, the legality of the proposed use and the nature of the occupancy, i.e., office, factory, retail" ... Thus, "subjective concerns and personal desires cannot play a role in a landlord's decision to withhold its consent to an assignment of a lease" ....

Give a little as a landlord, and you may be giving away a lot.  (How's that for subjectivity?)

For a copy of the Appellate Division's decision in Logan & Logan, Inc. v. Audrey Lane Laufer, LLC, please click on the following link: http://www.nycourts.gov/reporter/3dseries/2006/2006_08220.htm


*Exceptions include, but are not limited to, personal-service contracts, options and requirements contracts.