a. Landlord’s ability to limit subsequent conveyance of a leasehold estate
i. 2 Approaches
1. Majority Rule is that a landlord may arbitrarily limit a lessee’s ability to transfer his leasehold interest and that the landlord does not need a commercially reasonable reason to deny assignment or sublease by the tenant
2. Minority Rule from Kendall v. Pestana is that a landlord may not limit a lessee’s ability to transfer his interest unless the contract provides otherwise without a commercially reasonable basis for denying consent.
a. Default position under Pestana is that landlord must have a commercially reasonable basis for denying consent
b. Commercially reasonable only applies to the landlord’s interest in the particular property at issue, not the general economic position of the landlord
c. Landlord only has the right under Pestana to protect his reversionary interest in the property or his right to payment under the contract
d. Courts still agree in free alienation of property, but courts agree that landlord has a right to protect his reversionary interest, and his right to collect rent under the lease from the tenant
e. Unreasonableness is a jury question
f. Five factors for determining commercial reasonableness:
i. Financial responsibility of new tenant
ii. Suitability of property for new use
iii. Legality of proposed use
iv. Need for alterations to premises
v. Nature of occupancy
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