[WSBARP] WA "Anti-SubLease Clause" - Does it "VOID" the Lease K?

Wed Jan 28 16:33:36 PST 2015

ok. sounds good. Thanks, Eric. Vr

On Wed, Jan 28, 2015 at 1:58 PM, Eric Nelsen <Eric at sayrelawoffices.com>
wrote:

>  Victor--I agree this is essentially straight contract law, valid in most
> circumstances but subject to the public policy against restraint on
> alienation.
>
>
>
> I'm not sure I am following your summary, but I think you're asking if a
> Sublessor can sublease and include a covenant to absolutely prohibit any
> sub-sublease by the Subtenant? I think a Sublessor can do that, but
> (because the clause will be strictly construed) needs to be really specific
> in the covenant to prohibit any assignment or sub-subletting of the
> sublease. Assignment and subletting is always allowed unless there is a
> covenant prohibiting it, the if there is such a covenant, it will be
> strictly construed.
>
>
>
> Sincerely,
>
>
>
> Eric
>
>
>
> Eric C. Nelsen
>
> SAYRE LAW OFFICES, PLLC
>
> 1320 University St
>
> Seattle WA  98101-2837
>
> phone 206-625-0092
>
> fax 206-625-9040
>
>
>
>
>
>
>
>
>
> *From:* wsbarp-bounces at lists.wsbarppt.com [mailto:
> wsbarp-bounces at lists.wsbarppt.com] *On Behalf Of *Victor R
> *Sent:* Wednesday, January 28, 2015 11:54 AM
> *To:* WSBA Real Property Listserv
> *Subject:* Re: [WSBARP] WA "Anti-SubLease Clause" - Does it "VOID" the
> Lease K?
>
>
>
> Eric - Thank you for your response.  Good stuff.
>
>
>
> So it appears like it's general contract law.
>
>
>
> Public Policy may trump the contract .. assuming litigation ensues in
> court... HOWEVER, textual interpretation of the K will probably rule if it
> came to it.  Then again, who knows:  "PUBLIC POLICY" vs. "THE WRITTEN
> AGREEMENT" == who wins?  I see an argument for both.
>
>
>
> Restraints against Alienation seems to be a big deal.
>
>
>
> So the bottom line I take it from your very helpful reply:  UNLESS THE
> SUB-LESSOR WRITES IN THE CONTRACT WITH PARTICULARITY AND SPECIFICITY, IT IS
> AGAINST PUBLIC POLICY AND GENERAL REAL PROPERTY/CONTRACT PRINCIPLES
> THAT ONE MAY NOT RESTRAIN ANOTHER FROM SUB=LEASING TO SUBSEQUENT
> LESSEES.... . unless of course, you can Written Consent from the Master
> Owner/Lessor and so long as it is "Reasonable".
>
>
>
> Eric, et. al. , does that sound whittled down?  I hope so!
>
> Thanks.
>
> Victor
>
>
>
>
>
>
>
>
>
>
>
> On Wednesday, January 28, 2015, Eric Nelsen <Eric at sayrelawoffices.com>
> wrote:
>
> Victor--Covenant prohibiting subleasing is probably enforceable, but is
> strictly construed. A sublease made in violation of the master lease is
> voidable by the master landlord. Other remedies may be available depending
> on what the lease says.
>
>
>
>
>
> From the WSBA Real Property Deskbook Vol. 1 Ch. 17.11(1)(b) (4th ed. 2009):
>
>
>
> (b)  Tenant's covenants against transfer
>
>
>
> Covenants restricting or prohibiting assignment or subleasing are direct
> restraints on alienation, but generally have been upheld. 1 AMERICAN LAW OF
> PROPERTY §3.58 (A. James Casner ed., 1952). Though covenants restricting
> tenants' transfers may be valid, they still are strictly construed, because
> they offend the policy against restraints on alienation. On this ground, it
> has been held in Washington that a covenant not to "assign" does not
> restrict subletting, and a covenant prohibiting a "sublease" does not
> inhibit assignment. Burns v. Dufresne, 67 Wash. 158, 121 P. 46 (1912)
> ("assign"); Willenbrock v. Latulippe, 125 Wash. 168, 215 P. 330 (1923)
> ("sublease"). Covenants against subletting the "whole of the premises," or
> words to that effect, do not prevent subletting a part of them. Cuschner v.
> Westlake, 43 Wash. 690,286 P. 948 (1906) (alternative ground). A covenant
> against assignment prohibits the tenant's separately assigning a purchase
> option contained in the lease. Behrens v. Cloudy, 50 Wash. 400, 97 P. 450
> (1908). But cf. Oregon-Wash. R.R. & Navigation v. E. Or. Banking Co., 81
> Wash. 617, 143 P. 154 (1914).
>
>
>
> Where assignment or subletting is restricted, the qualification is often
> added, "except with the landlord's prior (written) consent." With such
> language, the landlord may give or withhold consent arbitrarily, without
> offering a reason. Coulos v. Desimone, 34 Wn.2d 87, 208 P.2d 105 (1949).
> Sometimes, however, there is further language, such as "consent shall not
> be unreasonably withheld" or "landlord shall consent" if the assignee meets
> certain standards. In Hedgecock v. Mendel, 146 Wash. 404, 263 P. 593
> (1928), the court held that a phrase such as "landlord shall consent" is a
> covenant by the landlord that is specifically enforceable by the tenant.
> Where the lease says that the landlord's consent "shall not be unreasonably
> withheld," Division I has held that the landlord will be held to a standard
> of a "reasonably prudent person in the landlord's position." Ernst Home
> Ctr., Inc. v. Sato, 80 Wn.App. 473, 486, 910 P.2d 486 (1996). The facts of
> the Ernst case impose a high standard on any landlord that has agreed to a
> standard of reasonableness and then wishes to withhold consent.
>
>
>
> If the tenant purports to make an assignment that is forbidden by the
> lease, the assignment is good as between the assignor and the assignee but
> is voidable by the landlord. OTR v. Flakey Jake's, Inc., 112 Wn.2d 243, 770
> P.2d 629 (1989); see also Morrison v. Nelson, 38 Wn.2d 649, 231 P.2d 335
> (1951). The assignee specifically acquires the duty to pay rent to the
> landlord. Nat'l Bank of Commerce v. Dunn, 194 Wash. 472, 78 P.2d 535
> (1938). If the assignee pays rent and the landlord accepts it knowing of
> the assignment, then the landlord has no legal remedy on account of the
> prohibited assignment. Field v. Copping, Agnew & Scales, 65 Wash. 359, 118
> P. 329 (1911). When a tenant improperly assigned its lease in violation of
> the lease terms, the landlord could declare the assignment void and
> maintain an unlawful detainer action to regain possession of the premises.
> Bellevue Square Managers, Inc. v. GRS Clothing, Inc., 124 Wn.App. 238, 98
> P.3d 498 (2004). If the lease contains a clause allowing the landlord to
> forfeit (terminate) for breach of a nonassignment clause, the landlord may
> terminate the lease because of the tenant's wrongful assignment, assuming,
> of course, the landlord has not accepted the assignee. Boyd v. North, 114
> Wash. 540, 195 P. 1011 (1921).
>
>
>
> Practice Tip:        Although there may be no Washington case that decides
> its effectiveness, it is nonetheless common to provide that any assignment
> or sublease made in violation of a provision of the lease will be void.
>
>
>
> In English common law, when the landlord's consent to assignment is
> required and it gives consent to one assignment, further assignments by the
> assignees may be made without consent. Dumpor's Case, 4 Coke 1196, 76 Eng.
> Rep. 1110 (King's Bench 1603) (one consent destroys the condition, so that
> consent is not thereafter required). Most American cases on the issue say
> they follow the rule in Dumpor's Case, but in fact create various
> exceptions to it. See 1 AMERICAN LAW OF PROPERTY §3.58 (A. James Casner
> ed., 1952). In Washington the force of Dumpor's rule is not settled,
> although it was repudiated in the strong dictum in Puget Mill Co. v. Kerry,
> 183 Wash. 542, 49 P.2d 57 (1935). As the court phrased it, the covenant
> restricting assignment should "run with the land" (the leasehold estate),
> so as to bind assignees. In a Washington case on a fact pattern opposite
> that in Dumpor's (several assignments were made without the required
> landlord's consent, then a final assignment was made with his consent), the
> final assignment was held valid. Hartford v. Faw, 166 Wash. 335, 7 P.2d 4
> (1932).
>
>
>
>
>
> Sincerely,
>
>
>
> Eric
>
>
>
> Eric C. Nelsen
>
> SAYRE LAW OFFICES, PLLC
>
> 1320 University St
>
> Seattle WA  98101-2837
>
> phone 206-625-0092
>
> fax 206-625-9040
>
>
>
>
>
>
>
> *From:* wsbarp-owner at lists.wsbarppt.com [mailto:
> wsbarp-owner at lists.wsbarppt.com] *On Behalf Of *Victor R
> *Sent:* Wednesday, January 28, 2015 9:18 AM
> *To:* WSBA RPPT Real Property Discussion Forum
> *Subject:* [WSBARP] WA "Anti-SubLease Clause" - Does it "VOID" the Lease
> K?
>
>
>
> Members:
>
>
>
> Any of you run into this 'problem'?  Where a Lessor writes in a Clause
> that the lease agreement is NOT SUBLEASE-'ABLE' ?
>
>
>
> Another Hypo is:  Owner Rents-Out to Lessee / Lessee Rents-Out to
> Sub-Lessee but says "Sub-Lessee, YOU CANNOT Lease Out That Office I am
> leasing to you!"
>
>
>
> What is the CURRENT case law on this?
>
>
>
> What WAS the current case law on this, and SINCE WHEN?
>
>
>
> I am trying to size up any potential litigation on this matter.
>
>
>
> Thank you, a bunch.
>
>
>
> Kindly,
>
>
>
> --
>
>
>
> Victor Ro, Esq.
> THE RO FIRM, P.S.C.
> A Professional Services Corporation
> 5400 Carillon Point
> Bldg. 5000, 4th Floor
> Kirkland, WA 98033
> Tel:  (206) 319-7072
> Fax: (206) 319-4470
>
> This communication is CONFIDENTIAL - ATTORNEY WORK PRODUCT - PRIVILEGED.
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>
> --
>
>
>
> Victor Ro, Esq.
> THE RO FIRM, P.S.C.
> A Professional Services Corporation
> 5400 Carillon Point
> Bldg. 5000, 4th Floor
> Kirkland, WA 98033
> Tel:  (206) 319-7072
> Fax: (206) 319-4470
>
> This communication is CONFIDENTIAL - ATTORNEY WORK PRODUCT - PRIVILEGED.
> You are responsible for any damages arising in any way from its use.  Do
> not construe this correspondence or contents, thereof, as legal advice or
> as an engagement between an attorney and client.  If you received this
> communication in error, delete it immediately and permanently from all
> existing files.  NOTICE and PROHIBITION:  Do not copy, transmit,
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-- 

Victor Ro, Esq.
THE RO FIRM, P.S.C.
A Professional Services Corporation
5400 Carillon Point
Bldg. 5000, 4th Floor
Kirkland, WA 98033
Tel:  (206) 319-7072
Fax: (206) 319-4470

This communication is CONFIDENTIAL - ATTORNEY WORK PRODUCT - PRIVILEGED.
You are responsible for any damages arising in any way from its use.  Do
not construe this correspondence or contents, thereof, as legal advice or
as an engagement between an attorney and client.  If you received this
communication in error, delete it immediately and permanently from all
existing files.  NOTICE and PROHIBITION:  Do not copy, transmit,
retransmit, distribute, or disclose this information contained, herein.
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