Owner Can't Require Assignee to Abide by Lease Terms

Facts: The owner claimed that the assignee was required to pay its annual rent in quarterly installments of gold coins of a certain weight, as required under the lease. The assignee said it would continue to pay the rent in U.S. currency. The owner sued the assignee for breaching the lease.

Decision: An Ohio federal district court ruled for the assignee without going to trial.

Reasoning: The court ruled that the lease released the assignee from “personal liability” upon assignment. For the assignee to be bound by the lease terms, the owner would have had to agree in writing to the lease assignment. The court said that there was no evidence that the owner had agreed in writing to the assignment. The owner's explicit consent to the assignment would have brought the owner and assignee together under the terms of a contract (the lease), thereby allowing the owner to enforce these terms. Since this never happened, the lease terms apply only to the parties who entered into it originally: the owner and the original tenant.

• 216 Jamaica Ave. LLC v. S & R Playhouse Realty Co., July 2007.

Lesson Learned: An owner that does not expressly consent to the assignment cannot later require the assignee to abide by the terms of the lease agreement.