Also known as:lessees interest · lessee interest · tenant's interest
Written by attorneys · grounded in primary & secondary sources — see below
An interest in leased property held by the tenant under a lease agreement. It encompasses the right to possession and use for the lease term. The interest is typically valued as the property's market value minus the lessor's interest and is subject to assignment or sale.
Sources & Authorities
How it applies
Common Examples
4
Landlord Withholds Consent to Assignment
Lillian Locke leased a retail space from Linden Bank under a lease requiring the bank's consent for any assignment of her interest. When Lillian sought to assign the lease to Lattice Systems, the bank refused without stating a reason tied to the assignee's fitness. Lillian sued, arguing the refusal was unreasonable under the applicable restraint rule. The court evaluated whether the bank's consent was withheld arbitrarily, determining that the lessee's interest could be assigned if the landlord lacked a commercially reasonable basis for objection.
Commercial Lease Assignment Dispute
Lucas Lee held a commercial lease from Lexicon Media and attempted to assign his lessee's interest to Lunar Dynamics. Lexicon Media withheld consent citing only a general policy against transfers. Lucas sued to compel the assignment. The court assessed whether the landlord's refusal was reasonable given the proposed assignee's financial stability and business compatibility, allowing the transfer when no legitimate objection was shown.
Select any source to read its text and confirm it supports the definition.
Uniform Acts
Restatements
Dictionaries
Kendall v. Ernest Pestana, Inc.40 Cal. 3d 488, 709 P.2d 837
Co-Tenant Objection to Lease Transfer
Landon Long and Latoya Lane held joint interests in leased premises. Landon sought to assign his lessee's interest to a third party over Latoya's objection. Police later entered based on Latoya's consent alone. The dispute centered on whether one co-tenant's objection could block the assignment of the lessee's interest or authorize entry affecting the shared possession rights.
Georgia v. Randolph547 U.S. 103 (2006)
Physical Installation Affecting Leasehold
Lorenzo Lugo leased a building and held the lessee's interest when a cable company installed equipment on the roof without consent. The installation occupied a small portion of the space. Lorenzo claimed the permanent physical occupation diminished the value and usability of his lessee's interest. The court examined whether the installation constituted a compensable interference with the leasehold rights.
Loretto v. Teleprompter Manhattan CATV Corp.458 U.S. 419, 427 (1982)
Common questions
Frequently Asked
3
How is the lessee's interest valued for assignment purposes?+
The value is the appraised worth of the leased property from the lessee's perspective. It is usually calculated as the property's market value minus the lessor's interest.
Supporting sources
When is a landlord's consent to assignment of the lessee's interest required?+
A restraint on alienation of the tenant's interest without the landlord's consent is valid. The landlord cannot withhold consent unreasonably unless the lease grants an absolute right to refuse.
Supporting sources
Does a lease by one joint tenant survive the lessor's death?+
Under the modern approach a lease by one joint tenant does not sever the joint tenancy. The lessee acquires only the rights the leasing tenant possessed during life. Upon the leasing tenant's death the interest extinguishes and the lease ends.
Supporting sources
458 U.S. 419 (1982)Property
…upon the landlord's interest, which "consists entirely of insisting that some negligible unoccupied space remain unoccupied. The tenant's interest clearly is more substantial, consisting of a right to receive (and perhaps send) communications from and to the outside world. In the electronic age, the landlord should not be able to…