Foodarama Supermarkets, Inc. v. Rexgene of Sayreville, Inc.

A-7108-97T3 (N.J. Super. App. Div. 2000) (Unpublished)
  • Opinion Date: February 9, 2000

LEASES; CONSENTS—In the absence of a provision prohibiting a landlord from unreasonably withholding its consent, a landlord may withhold its consent without giving any reason and without the need to be reasonable.

A sublease provided that the subtenant could not assign or sublet the premises without its sublandlord’s consent. Although the sublease had originally provided that such consent “shall not be unreasonably withheld,” this clause was “X’d out” on the executed sublease. When the subtenant wanted to assign its sublease to the buyer of its business, the sublandlord informed it that it would not consent to the assignment until the subtenant paid all outstanding rent and legal fees and the assignee provided an appropriate guaranty. The subtenant argued that its sublandlord had no authority to prevent the assignment of the sublease because it, the subtenant, had obtained the master landlord’s consent to the assignment and, under the terms of the sublease, that consent provided sufficient authorization to proceed with the assignment. The provision relied upon by the subtenant said, among other things, that the sublandlord could not withhold or deny any consent or approval unless the master landlord did likewise. The Court, however, pointed out that this provision only applied when “the consent or approval of [the master landlord was] required under the Prime Lease as a condition to the taking of any action by [the sublandlord] thereunder.” Unsuccessful with that argument, the subtenant then argued that “New Jersey should adopt a Rule to require landlords to consent to assignments or subleases requested by tenants when such request is commercially reasonable.” The Court responded as follows: “[i]t has been firmly established in this State for at least eighty years that, in the absence of a provision in a lease prohibiting a commercial landlord from unreasonably withholding consent to an assignment or sublet, the landlord may withhold such consent without giving any reason or being called upon to show a reasonable basis for its action.”