Technicality lets tenant assign lease to friend | Bedford Hills NY Real Estate

Q: My tenant assigned his lease to his friend without my consent, and I didn’t realize it until the new “tenant” withheld rent over repairs. I lost — believe it or not, the case turned on the anti-assignment clause and the difference between “cannot” and “may not.” This seems the height of legal nit-picking. Can you explain it? –Jarod H.

A: I’m wading a bit into the unknown to try to answer your question, but I can give it a try. A similar case came up recently in Connecticut, involving a commercial lease.

Anti-assignment and subletting clauses are common in both commercial and residential leases. The purpose is to prevent tenants from turning over leases to people whom the landlord has not screened and approved, i.e., people who may not be suitable as tenants. In a commercial context, even the sale of a business to another business may be considered an assignment, which in practice means that the landlord must agree to the sale if the new owner wants to continue to operate its acquired business at the same location.

Now then, on to semantics. Suppose your anti-assignment clause reads, “Tenant may not assign or sublet the premises without the landlord’s written consent.” Strictly speaking, this limits the tenant’s right to sublet, not its power to do so. In practice, this means that if the tenant disobeys the clause and sublets without consent, the landlord can respond by voiding the lease — by terminating and evicting, if necessary. The clause is known as a “restrictive” clause, voidable by the landlord. Importantly, until the landlord voids the lease, the new “tenant” has stepped into the shoes of the former tenant.

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