Also known as: freedom to alienate · alienability · restraint on alienation
Written by attorneys · grounded in primary & secondary sources — see below
A legal policy favoring the free transferability of property interests. Courts invoke the policy to invalidate unreasonable restraints that would prevent an owner from conveying title or an interest in land or personal property.
Felicity French leased commercial space to Falcon Dynamics under a lease requiring tenant consent before the landlord could assign its interest. When Felicity attempted to sell the building to a new owner without consent, Falcon Dynamics withheld approval to extract better lease terms. The court applied the consent standard and required Falcon Dynamics to show a commercially reasonable basis for refusal.
Faye Fuller purchased land subject to a recorded servitude limiting resale to buyers approved by the original developer. When Faye contracted to sell to an unapproved purchaser, the developer invoked the servitude to block the transfer. The court weighed the servitude's utility in preserving neighborhood character against the harm to marketability and held the restraint invalid.
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Flora Ford's will left controlling shares in Fisher Foods to her son with an absolute bar on any sale or encumbrance. After the company needed outside capital, the son sought to sell shares to raise funds. The court examined the restraint's purpose, nature, and unlimited duration and concluded that the policy favoring alienation rendered the restriction unenforceable.
Floyd Franklin sublet his leased warehouse to Fidelity Trust without first obtaining landlord consent as required by the lease. The landlord refused consent unless Floyd agreed to a substantial rent increase. The court required the landlord to demonstrate a reasonable basis tied to the proposed assignee's qualifications rather than an arbitrary demand for higher rent.
Felix Franco held a commercial lease and sought to assign it to a financially sound buyer. The landlord demanded increased rent and additional security as conditions of consent. The court examined whether the landlord's conditions were commercially reasonable under the lease terms and the surrounding circumstances.
Francesca Fowler and her co-tenant executed a lease of their jointly owned parcel to a third party. Upon the co-tenant's death, the surviving joint tenant claimed the lease had severed the joint tenancy and destroyed the right of survivorship. The court assessed whether the partial alienation through the lease operated to sever the unities required for continued joint tenancy.
A consent requirement is unreasonable when the landlord or tenant withholds approval without a commercially reasonable basis related to the proposed transferee's qualifications or the transaction. Absolute or arbitrary refusals violate the policy favoring free alienability unless the lease expressly grants an absolute right to withhold consent.
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Courts weigh the utility of the restraint against the injurious consequences of enforcing it. A direct restraint is invalid if the harm to alienability outweighs any legitimate purpose served by the restriction.
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A disabling restraint in a donative transfer is enforceable only when the purpose, nature, and duration of the restraint make the policy favoring alienation inapplicable under all the circumstances. Perpetual or total restraints are typically invalid when they interfere with necessary financing or marketability.
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A lease by one joint tenant may sever the joint tenancy by destroying a required unity such as possession or interest, depending on the jurisdiction's treatment of the lease as a temporary alienation. The surviving tenant's right of survivorship is then defeated as to the leased portion.
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…(calling the actual public use standard the "majority view" and citing other cases). [^maj-3]: Some States also promoted the alienability of property by abolishing the feudal "quit rent" system, i. e. , long-term leases under which the proprietor reserved to himself the right to perpetual payment of rents from his tenant.…