Not to Unreasonably Withhold Consent

There is little case-law about residential/landlord tenant assignments in this state, but Washington’s Courts have outlined the law on assignability of commercial leases; with no extraordinary circumstances, commercial law, and a bargained-for ban on assignability, would be enforceable in a residential lease. As far as counterbalancing forces to such a ban, the Landlord must exercise good faith, and the law favors free transferability of everything, including leasehold interests: there is a “strong policy against restraints on the alienation of property interests.” Robroy Land Co., Inc. v. Prather, 95 Wash.2d 66, 622 P.2d 367 (1980).


If a lease does have a clause that requires for the landlord not to unreasonably withhold consent to assignment or sublet, as most do, then, the tenant’s implementation of an assignment is allowed pending consent; which shall not be unreasonably withheld. If it does not have that language (i.e., the lease/contract is silent on the issue), and a tenant’s desire to sublet were to arise, the tenant could likely – in contravention to the common law – superimpose some of the language and legal authority discussed above and compel authorization. The written agreement at the time of signing the lease is key: even in the residential context, the landlord may include a provision that the “tenant may not assign or sublet the premises unless the landlord consents to the assignment or subletting, which consent may be withheld for any reason.”


Such a clause could be carried over from the commercial context. Ernst Home Center, Inc. v. Sato, 80 Wn.App. 473 (1996) (dealing with enforceability of a stock clause stating that the “landlord may not unreasonably withhold consent.”).


In the Ernst case, the Court debated whether or not Ernst hardware could sublet its space in Bremerton, Washington, to Value Village, the thrift store. Ernst shut down its store there and was guardedly attempting to not breaking its lease; it found Value Village to sublet. The Court reviewed and set up the reasonableness standard through which the landlord’s rejection must be analyzed. What is “unreasonable?” The Court referenced a Texas case, Mitchell’s, Inc. v. Nelms, 454 S.W.2d 809, 814 (1970), which equated unreasonable to “irrational, foolish, unwise, absurd, silly, preposterous, senseless, and stupid, with ‘arbitrary’, defined as despotic, tyrannical, bound by no law, and are performed without regard to principles.”


In Ernst, the Court found that the withholding of consent was not justifiable, articulating the following considerations: “We do not disagree that ‘tone’ and ‘image’ are valid considerations which a landlord may appropriately consider . . . To the contrary, Ernst was able to show conclusively that Value Village co-exists happily side-by-side with stores such as Safeway, Ernst, Payless, Eagle Hardware, Sears and others in strip malls indistinguishable from this one, in the Pacific Northwest and elsewhere in the country . . . The trial court believed that the greater weight of the evidence was that Value Village would fit very nicely into this mall–and would be a far superior choice to leaving more than a third of the space empty, dark, and unproductive for an indefinite period of time. . . ” Ernst, 80 Wn.App. 473, 485.


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