Tenant shall not sublet or assign the Lease or Premises, in whole or in part, without Landlord’s prior written consent.
Sometimes, this type of lease clause will drive the point home by adding the phrase “which Landlord may withhold in its sole discretion” to the end of this phrase, although this seems unnecessary.
In Johnson v. Yousoofian, 84 Wash. App. 755, 930 P.2d 921 (1996), rev. denied, 132 Wash.2d 1006, 940 P.2d 656 (1997), the lease at issue contained an unqualified requirement that the tenant obtain the landlord’s consent to an assignment. The Washington Court of Appeals held that the landlord is not required to act reasonably in considering tenant’s request (rejecting the argument that reasonableness is required under the implied contractual obligation of good faith and fair dealing). See also Higgerson v. Pipeline Constr. Ltd., 112 Wash. App. 1023, 2002 WL 1354242 (2002) (unpublished); Alwen v. Tramontin, 131 Wash. 78, 228 P. 851 (1924). So, a lease that requires the tenant to obtain the landlord’s consent before subletting or assigning the lease, without any further qualifications on the landlord’s obligation to consider the request, allows the landlord to choose to withhold its consent arbitrarily, unreasonably and without explanation.
Why might a landlord want to retain such control over a tenant’s ability to sublease or assign? From the Landlord’s perspective, there are many things to be wary of in a sublet or assignment. Consider, for example, the risk to the landlord of:
Uses that don’t fit with a building’s character (e.g., an adult entertainment company in Class A business space - don’t laugh, this happened in Seattle)
Uses that violate exclusive use clauses in existing leases
A financially weak subtenant
Government agencies (e.g., unemployment agencies, law enforcement offices)
A landlord may want complete control over the entity to whom its tenant is entitled to sublease or assign, and may be wary of being second guessed about whether the proposed subtenant/assignee is financially capable, etc.
1.4The Reasonableness Standard. Many tenants are loath to accept a lease under which the landlord may arbitrarily withhold its consent. Business futures are too uncertain, and tenants desire flexibility in their ability to meet future circumstances. Furthermore, even the most trusted, reasonable landlord may later sell the property to an unreasonable party.
Since most tenants are unwilling to accept a sole discretion standard, and most landlords are unwilling to allow tenants the unfettered right to sublet or assign (except in certain circumstances, discussed in the following Section 1.5), compromises have arisen. One of the most commonly requested lease revision made by a tenant is that the landlord its consent to an assignment or sublease. For example: