Under Florida Law, When Does the Implied Duty of Good Faith Apply to a Landlord's Decision to Consent to a Sublease or an Assignment of a Lease?

Leases often contain a term that the landlord must provide written consent to a sublease or an assignment of a lease. Under Florida law, if a lease does not specifically outline the scope of consent, or standards governing the consent, that the landlord possesses when determining whether to consent to a sublease or an assignment of the lease, the landlord must act reasonably and in good faith when deciding whether to approve a sublease or an assignment of the lease. For example, in Siewart v. Casey, 80 So.3d 1114, 1116 (Fla. 4th DCA 2012), the court held that the implied duty of good faith applied to a lease that required a landlord’s consent to a sublease:

When a lease contains a boilerplate clause requiring the landlord's consent for any proposed sublease—without specific standards governing the landlord's approval—the landlord may not then arbitrarily withhold approval of a sublease. This stems from the implied covenant of good faith which "exists in virtually all contractual relationships." Speedway SuperAmerica, LLC v. Tropic Enters., Inc., 966 So. 2d 1, 3 (Fla. 2d DCA 2007). "The implied obligation of good faith performance has been applied in the context of lease provisions requiring a landlord's consent to a tenant's assignment of a lease." Id. at 4; see also Fernandez v. Vazquez, 397 So. 2d 1171 (Fla. 3d DCA 1981).

In the instant case, the sublease provision in the lease provided no standards which the landlord was to utilize in determining whether to approve or reject a sublease. Therefore, the implied obligation of good faith performance is applicable to the sublease provision at issue in this case.

The sale of a business operated on leased property often requires the landlord’s written consent to a sublease or an assignment of the lease to the buyer. Disputes may arise if the landlord refuses to approve a sublease or an assignment of the lease.

Joel Ewusiak represents parties in disputes over a landlord’s refusal to consent to a sublease or an assignment of a lease. Please contact Joel Ewusiak for legal assistance with your specific matter.