ARMENTA-150502-0268Short answer… It might depend on your neighbor’s lease…   I was recently negotiating on behalf of a client to sublease space from another tenant in their existing building. We agreed to terms and the sublessor submitted the sublease for the landlord’s approval.  Even though there was no directly available space in the building, the landlord withheld its consent, infuriating the sublessor, and prospective sublessee, both tenants in the same building.  But the landlord was operating within it’s rights.

leaseThis is not something that is entirely unusual because landlords typically have the right to disapprove of subleases. In this case, the landlord had vacancy in the adjacent building, which was a condition that allowed it to withhold consent pursuant to the sublessee’s lease.  But the expanding tenant would have much preferred to expand in its existing building via sublease.   Even in the event that the expanding tenant had liberal sublease rights, the landlord could hold them both hostage.  I had never seen this situation play out like this before.

Demand-Media-6In the end this situation could have been avoided if both leases had better lease language. The sublessor needed more liberal rights to sublease space to other tenants in the project.  And, more importantly, the expanding tenant needed to have the right to restrict the landlord from enforcing its right to withhold consent on other tenants in the project from whom they might wish to sublease space.  That’s a new one for all  my future RFP’s.

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