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Can a landlord unreasonably withhold an assignment or transfer of a commercial lease?

Seattle, WA |

Is it possible for a landlord to unreasonably withhold us from assigning or transfering a commercial lease?

I will also add this started as a month to month rental agreement and we updated to add a 2 yr landlord guarantee as well as a
some language that says my company & or assigns.

Attorney Answers 3

Posted

What does your lease say? Most commercial leases have a section on assignment and subletting. Covenants against assignment are enforceable.

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Posted

Its pretty standard language, "lessee may not assign this lease or sublet the premises without prior written consent of lessors, which consent shall not be arbitratily withheld by lessors, provided any such assignment shall not release lessee from liablity from the full performance of the lease according to its terms" But landlord is saying he is not going to allow transfer and either we will continue or he will cancel it. Does the fact it is written as a month to month with a 2 year guarantee change anything?

Nancy L. Lanard

Nancy L. Lanard

Posted

"Arbitrarily withheld" is different than "unreasonably withheld". Arbitrary would indicate that the LL did not consider the request for assignment at all. Unreasonably indicates a certain commercially reasonable standard.

Asker

Posted

When you say did not consider the request, do you mean the LL does not have to allow it or does have to allow it based on not consdering it?

Posted

Your lease will control. Unless it say the landlord cannot unreasonably withold approval to a requested assignment then the landlord my refuse such approval.

This response is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of Washington. Responses are based solely on Washington law unless stated otherwise.

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Posted

Its pretty standard language, "lessee may not assign this lease or sublet the premises without prior written consent of lessors, which consent shall not be arbitratily withheld by lessors, provided any such assignment shall not release lessee from liablity from the full performance of the lease according to its terms" If it says this, doesnt that mean he CANNOT automatically refuse a transfer?

Posted

I agree with my colleagues that your lease will govern your rights to assign or transfer the lease. With that said, the landlord typically has the right to withhold consent if the assignee or transferee is not of sufficient financial strength or for other commercially reasonable reasons. For example, the landlord may not allow assignment or transfer to a type of business that the landlord does not want in the space - either it represents a type of business the LL does not want or it may violate other tenant's exclusive use, etc.

My caution is to be careful what "unreasonably" withholding consent entails. As I stated, what may seem unreasonable to you may not be commercially unreasonable.

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This response does not create an attorney-client relationship and is not intended to provide legal advice for your specific situation.

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