Also known as: rules against direct restraints on alienation · direct restraint on alienation · direct restraints on alienation · restraint on alienation · rule against restraints on alienation
Written by attorneys · grounded in primary & secondary sources — see below
A doctrine that invalidates attempts in conveyances or contracts to prevent or penalize the transfer of property interests. It renders disabling restraints void and subjects promissory or forfeiture restraints to reasonableness review based on utility versus harm to alienability.
Ricardo Rojas leased commercial space to Ronald Reed under a lease requiring Ricardo's consent for any assignment by Ronald. When Ronald sought to assign to a qualified tenant, Ricardo withheld consent to extract a higher rent from a new direct tenant. The court applied the rule and held that Ricardo could not unreasonably withhold consent absent an absolute negotiated right to do so.
Rosalind Reed conveyed land subject to a servitude barring sale to any buyer outside a designated family line. When she later attempted to sell to an outsider, the burdened estate owner invoked the servitude. The court weighed the restraint's limited utility against its severe impact on marketability and invalidated it as unreasonable.
Select any source to read its text and confirm it supports the definition.
Ryan Roberts devised property to Rita Russell with a clause limiting its use to residential purposes only. Rita sought to sell the land for commercial development. The court held that the use restriction did not qualify as a restraint on alienation under the doctrine.
Regina Robinson leased property from Riverstone Manufacturing with a clause requiring Riverstone's consent for any assignment by Regina. When Regina proposed a solvent assignee, Riverstone withheld consent to renegotiate a higher rent. The court ruled that Riverstone could not unreasonably withhold consent unless the lease granted an absolute right.
Ronald Reed devised property to Regina Robinson subject to a right of first refusal held by a named family member at a price tied to fair market value and exercisable within thirty days. When Regina received a third-party offer, the family member timely matched it. The court held that the reasonable right of first refusal did not constitute a restraint on alienation.
Rising Sun Electronics leased space from Rocky Mountain Mining under a clause requiring landlord consent for subleases. When Rising Sun proposed a creditworthy subtenant, Rocky Mountain Mining withheld consent hoping to lease directly at higher rent. The court applied the reasonableness standard and required consent to be granted.
A lease clause requiring consent for assignment or sublease is valid, but consent cannot be withheld unreasonably unless the lease grants an absolute right to withhold. Courts apply a commercial reasonableness standard to prevent landlords from using the clause for financial gain unrelated to the tenant's suitability.
Supporting sources
A servitude imposing a direct restraint on alienation is invalid if unreasonable. Reasonableness turns on balancing the restraint's utility against the harm it causes to marketability and the owner's ability to transfer the estate.
Supporting sources
No. A restraint on the use that may be made of transferred property is not treated as a restraint on alienation under the doctrine.
Supporting sources
A right of first refusal is not a restraint on alienation if its price and exercise period are reasonable. If the terms are unreasonable, the provision is judged under the rules applicable to disabling, forfeiture, or promissory restraints.
Supporting sources
…v. Darger, supra, 119 Cal. App.3d at p. 682.) Reasonableness is determined by comparing the justification for a particular restraint on alienation with the quantum of restraint actually imposed by it. "[T]he greater the quantum of restraint that results from enforcement of a given clause, the greater must be the justification for that…