Don't Let Consent to One Assignment Become Carte Blanche for Future Assignments
Boilerplate language requiring tenants to get your consent to assign the lease may not be enough to guarantee your right to consent to future assignments. Thus, in saying yes to a lease assignment, you may be inadvertently consenting to all of the subsequent assignments that the assignee chooses to make. Result: You lose control over which business occupies the premises for the rest of the lease term.
Consent to Assignment Ends Landlord Right to Consent to Reassignments
A New York landlord can attest to how easy it is to lose control over lease assignments. The case involved a restaurant tenant whose lease required the landlord’s consent to any lease assignment. The tenant sold the restaurant and assigned the lease with the landlord’s consent. The assignee then reassigned the space to the original tenant without the landlord’s consent. The landlord was none too pleased and went to court to evict the tenant/reassignee, claiming that the second assignment was invalid.
But the court disagreed. Once the landlord consented to the first assignment, there was no need to get its consent for future assignments, the court reasoned. As a result, the original tenant could occupy the space even though the landlord didn’t consent to the reassignment [Nipet Realty Inc. v. Melvin’s Restaurant & Bar, Inc., 327 N.Y.S. 2d, 67 Misc. 2d 790].
Take 2 Steps to Plug the Loophole
There are two things you can and should do to avoid finding yourself in this predicament.
Add protections to lease. First, add language to the lease assignment and sublease clause spelling out that your consent to one assignment or sublease doesn’t eliminate the requirement that you give consent to a subsequent assignment or sublease.
Model Lease Language
Landlord’s consent to one assignment or sublease shall not waive the requirement of obtaining Landlord’s consent to any subsequent assignment or sublease.
Add protections to the consent. While the added lease language should be enough to protect you, attorneys advise taking the extra precaution of inserting a similar clause in the actual consent form stating that just because you’re consenting to this assignment or sublease doesn’t mean you’re consenting to future assignments or subleases.
Model Consent Language
Landlord’s consent to this [assignment/sublease] does not waive the requirement of obtaining Landlord’s consent to any subsequent assignment or sublease.