Property II, Pages 417–421

Julian v. Christopher

Court of Appeals of Maryland, 1990

Facts:

Tenants rented a tavern and upstairs from landlord. The lease stated that the premises should not be assigned or sublet without landlord's written consent. Landlord told them that that was just included to prevent them from subletting or assigning to "someone who would tear the apartment up." Tenants requested landlord's permission to sublease, but landlord refused unless tenants paid extra rent. Tenants sublet out the apartment anyway and landlord filed an action for repossession.

Procedural History:

District court and circuit court held strictly to the words of the lease and found for the landlord.

Issue:

For what reason can a landlord prevent a tenant from making a transfer when the lease does not specify?

Reasoning:

  • There is a public policy against restraints on alienation, so when clauses could be interpreted either way, the least restrictive option should be favored.

  • Parties are assumed to act in good faith and fair dealing in every contract.

Rule/Holding:

When a lease gives the landlord the right to withhold consent to a transfer, the landlord must act reasonably.

Note:

Financial irresponsibility of the transferee or unsuitability of the intended use of the property by the transferee would be valid reasons to refuse a transfer.

Securing a rent increase would not.

Judgment:

Reversed and remanded.

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