Most standard commercial leases contain provisions that allow for the tenant to assign or sublease their leasehold interest provided the landlord consents to the same. Commonly, these leases provide that such landlord consent shall not be unreasonably withheld. (Somewhat) recently, the Iowa Supreme Court in Superior Staffing v Agans Brothers set forth the following balancing factors that will be considered in determining the “reasonableness” of the withheld consent:
- The financial responsibility of the proposed assignees;
- The original tenant’s failure to comply with the lease conditions;
- The original tenant’s failure to indicate a willingness to remain obligated on the lease;
- The legality of the proposed use and need for alteration of the premises; and
- The nature of the existing use and the proposed use by the new tenant.
I am sure you are probably of the opinion that you are a reasonable person, but make sure a court would concur with that opinion in the landlord / tenant relationship. Accordingly, when presented with this situation (as either a landlord or tenant) be aware of the above-referenced balancing factors when attempting to determine whether consent is “reasonably” or “unreasonably” withheld.