Owner Unreasonably Withheld Its Consent to Assignment

May 31, 2003

A lease said that the tenant must get the owner's written consent to a lease assignment. The lease also said the owner wouldn't “unreasonably withhold” such consent. The tenant began having financial problems, so it found a proposed assignee. The tenant and the proposed assignee told the owner that they needed to move quickly. The owner said it would prepare the assignment documents. But the owner delayed for almost a year and eventually refused to consent. The tenant sued the owner for violating the lease by unreasonably withholding its consent.

A lease said that the tenant must get the owner's written consent to a lease assignment. The lease also said the owner wouldn't “unreasonably withhold” such consent. The tenant began having financial problems, so it found a proposed assignee. The tenant and the proposed assignee told the owner that they needed to move quickly. The owner said it would prepare the assignment documents. But the owner delayed for almost a year and eventually refused to consent. The tenant sued the owner for violating the lease by unreasonably withholding its consent.

A California appeals court ruled that the owner had unreasonably withheld its consent. The owner had delayed giving its consent to the assignment while it tried to sell the property. Through its “stall tactics,” the owner unreasonably withheld its consent, the court said [USRP (RIBBIT), LLC v. Rowley Petroleum Lakewood, LLC].

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