Technicality lets tenant assign lease to friend

Rent it Right

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Add Comment Add Comment | Comments: 0 | Posted Mar. 28, 2013

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Rent it Right

Janet Portman
Inman News®

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.

Contrast the wording just discussed with this one: "Tenant cannot assign or sublet the premises without the landlord's written consent." To some courts, this is a different animal -- it restricts not the right, but the power of the tenant to act. In other words, when a tenant violates this clause, by subletting without consent, the sublet is void immediately, and the new occupant has no rights under the lease. This tenant could not insist on repairs, or any other right, whereas the former tenant arguably may have tenant rights until the landlord terminates the lease on the grounds of the former tenant's breach. To drive home the point that an assignment made in violation of a "cannot" clause will not take effect, lawyers will often add language like, "Any assignment made contrary to this clause is void ab initio [from the beginning]."

I agree, this may seem like nit-picking in the extreme. And not all judges will adopt this analysis. If you lost your case because your anti-assignment clause restricted only the right, and not the power to assign, this may be the reason.

Q: My landlord is bugging me with suggestive remarks and questions about my social life. I've told him to stop, but he hasn't. He's threatened me, too, warning that if I sue him and lose, I'll have to pay for his attorney and court costs. It seems that I would, since my lease has an "attorney's fees" clause that says that the loser pays the winner's costs and fees. I know lawyers are expensive and lawsuits are not sure winners, and I don't know if I could pay. --Alice E.

A: The clause in your lease is common, but it applies only to lawsuits that concern the meaning and implementation of the lease. For example, if you fail to pay the rent and the landlord has to go to court to evict you, the clause means you'll pay the landlord's attorney's fees and court costs. Or, if the landlord fails to return your security deposit and you successfully sue to get it back, you'll be able to collect your fees and costs from him. In practice, the attorney's fees clause is used mostly in eviction lawsuits, because most other legal spats over the tenancy end up in small claims court. In many states, you can't bring a lawyer to small claims court (though there are modest filing fees).

What you're describing, however, is a problem that, if it goes to court, will not be covered by the attorney fees clause in your lease. That's because behavior like the kind you describe is not governed or contemplated by the lease. This means that the general rule -- each side pays its own fees and costs -- will apply, unless a specific state law directs that in your type of case, the loser pays the winner's fees and costs. You'll need to check with a lawyer in your state familiar with harassment lawsuits to find out.

But first, consider filing a complaint with the Department of Housing and Urban Development (HUD) or your state's agency responsible for enforcing antidiscrimination laws. The behavior you describe is actually a form of discrimination, under both federal and state law. These agencies have lawyers who will evaluate and handle your case, and you will not be asked to front your own fees or costs.

Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of "Every Landlord's Legal Guide" and "Every Tenant's Legal Guide." She can be reached at janet@inman.com.

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