Jury Must Decide if Owner's Refusal to Consent to Sublet Was Reasonable

A lease required the tenant to get the owner's consent to any sublet, which consent couldn't be unreasonably withheld. The owner consented to the tenant's sublet of part of its space to a bank. When that sublet ended, the tenant asked the owner to consent to another sublet to a different bank. The owner said it would consent to the second sublet only if the tenant agreed to pay it part of the sublet rent to cover percentage rent it would lose from the sublet. The tenant accepted this condition under protest and sued the owner, arguing that it had unreasonably withheld its consent to the sublet.

An Alaska appeals court ruled that a jury must decide if the owner's refusal to consent to the sublet without conditions was reasonable. The court noted that both parties treated the owner's conditional consent as the equivalent of a refusal to consent. The court rejected the tenant's argument that because the owner had previously consented to a sublet to a bank, it was unreasonable for the owner to refuse to do so now. The court explained that the owner's reasons for its refusal to consent—a decrease in percentage rent and its intention to try to lease another space in the owner to a bank—had been found to be reasonable in similar cases. So a jury would have to decide if they were reasonable excuses in this case, the court said [Norville v. Carr-Gottstein Foods Co.].