[RPPTL LandTen] Assignment, Subletting and Exclusive Use Provision Question
Anthony J. Horky
ahorky at mbhlawyer.com
Tue Aug 3 16:23:28 PDT 2010
I agree that, generally, it would be hard for a court to find that the
landlord unreasonably withhold consent under lease #1 where to allow the
assignment would result in a default under the exclusive of lease #2.
However, there is a temporal issue here. The operative term is that
landlord is "negotiating" lease #2. If the landlord is aware that
tenant under lease #1 can sublet and the use under lease # 1 is broad
enough that it may overlap with the exclusive in lease #2, the landlord
is exposing itself to future liability. Since landlord is in the best
position to know the terms of lease # 1 and to negotiate the terms of
lease #2, and, therefore, in the best position to avoid the future
liability, the doctrine of avoidable consequences can result in landlord
being found liable. I would agree with Rick that the landlord needs to
negotiate the exclusive in lease #2 with an exception for lease #1 use
clause.
Regards,
Anthony J. Horky, Esq.
Mombach, Boyle & Hardin, P.A.
500 East Broward Boulevard
Suite 1950 Broward Financial Centre
Ft. Lauderdale, Florida 33394
Telephone: 954.467.2200 ext. 225
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E-Mail: ahorky at mbhlawyer.com
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From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Arthur J.
Menor
Sent: Tuesday, August 03, 2010 5:18 PM
To: 'RPPTL Landlord Tenant Committee'
Subject: Re: [RPPTL LandTen] Assignment, Subletting and Exclusive Use
Provision Question
I agree with David Weisman. I think it would be hard for a court to say
that a landlord unreasonably withheld consent where to have granted
consent would have put him in default under Tenant #2's Lease.
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Arthur J. Menor
Partner
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From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of David
Weisman
Sent: Tuesday, August 03, 2010 11:09 AM
To: RPPTL Landlord Tenant Committee
Subject: Re: [RPPTL LandTen] Assignment, Subletting and
Exclusive Use Provision Question
George:
I think that when an assignment request is made, it has to be
reviewed with regard to exclusives in place at the time just as a
proposal for a new tenant. If Landlord approved the assignment, it would
violate the exclusive and it would be unreasonable to expect a Landlord
to breach another contract in order to approve a proposed assignment.
The contrary answer would allow a competitor to circumvent the
exclusive simply by acquiring an existing lease.
David Weisman
Board Certified Real Estate Lawyer
Greenspoon Marder, P.A.
Trade Center South, Suite 700
100 West Cypress Creek Road
Ft. Lauderdale, FL 33309
Phone 954-491-1120
Toll Free 888-491-1120
Direct Phone 954-343-6941
Direct Fax 954-343-6942
From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of George
Pincus
Sent: Tuesday, August 03, 2010 10:42 AM
To: 'RPPTL Landlord Tenant Committee'
Subject: [RPPTL LandTen] Assignment, Subletting and Exclusive
Use Provision Question
Here are my facts:
* Landlord enters into a lease with Tenant #1. The
Assignment/Subletting clause says the typical "which consent shall not
be unreasonably withheld" when the Landlord is asked by the Tenant to
approve an assignment or sublease. There are no criteria or conditions
specified as to what qualifies as Landlord being reasonable when it says
"no" to a proposed assignment or sublease.
* Three (3) years later and Landlord is now negotiating
a lease with Tenant #2, who is asking that Landlord not lease other
space in the building to Tenant #2's competitors, which will be listed
on a schedule to the Lease.
* Question: is it reasonable for Landlord to say "no"
to Tenant #1 when Tenant #1 shows up with a request to sublet to one of
Tenant #2's competitors on the list?
Obviously, the definitive answer is to go back to Tenant #1 and
try and amend Tenant #1's Lease to preemptively provide that it is not
unreasonable for Landlord to withhold consent to a proposed assignment
or sublease to one of the listed competitors, but that is not going to
happen.
I can't find any case law on this point (but at my advanced age,
I suck at research). Does anyone have any relevant experience with
this issue?
I appreciate your thoughts on this issue.
Thanks very much.
George A. Pincus, Esq.
Shareholder
Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A.
New River Center, Suite 2100
200 East Las Olas Boulevard
Ft. Lauderdale, FL 33301
Telephone: 954-766-9705
Facsimile: 954-766-9719
E-mail: gpincus at stearnsweaver.com <mailto:gpincus at swmwas.com>
www.stearnsweaver.com
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taxpayer, then the advice should be considered to have
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person other than the sender or this firm of that
transaction or matter, and such taxpayer should seek
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