ANNAPOLIS, JUNE 29 -- Landlords may no longer "arbitrarily" refuse to allow tenants to sublet their apartments or stores unless the lease prohibits the practice, Maryland's highest court ruled yesterday.
The Court of Appeals unanimously held that if a lease requires a tenant to have the landlord's written consent before subletting, the landlord must have a reasonable cause for withholding consent.
The court's ruling reverses its 1961 decision. Under the earlier ruling, landlords with "silent consent" clauses in their leases could withhold permission on a potential sublet for any reason.
However, Judge Howard Chasanow said, "Public policy requires that when a lease gives the landlord the right to withhold consent to a sublease or assignment, the landlord should act reasonably."
The opinion involved the case of two men operating a tavern in Baltimore who were renting a restaurant with an upstairs apartment. When the business owners, Douglas Julian and William J. Gilleland III, tried to sublet the apartment to a woman with two children, their landlord said they would have to pay $150 more in rent. After Julian and Gilleland allowed the woman to move in anyway, the landlord, Guy D. Christopher, went to court to break their lease.
Chasanow said it was unreasonable for Christopher to refuse to agree to the subletting simply to get a rent increase.
However, the judge indicated that landlords concerned about a subletting tenant's ability to pay the rent or intentions for the property could be seen to be acting fairly.
Except for the specific lease involved in the ruling, the decision will not affect leases signed before yesterday.
Experts in landlord-tenant law said it is unclear how far-reaching the court's decision will be, even though clauses requiring a landlord's permission before a property is transferred to a third party are standard on most leases.
In Montgomery County, for instance, an 18-year-old county law prohibits unreasonable denials of subleases on residential properties. Attorneys Steven Silverman and Gary Mininsohn said their landlord clients already often state on leases for commercial spaces that sublets cannot be denied without cause.
Christopher's attorney, Charles E. Yankovich of Towson, Md., said the court's ruling could prompt some landlords to insist on leases that bar subletting.
"Landlords and tenants better start looking at their leases very carefully," he said.