Also known as: restraint upon alienation · restraints on alienation · restraint on alienation · rule against restraints on alienation
Written by attorneys · grounded in primary & secondary sources — see below
A restriction imposed by conveyance or contract that limits the ability of a property owner to transfer an interest in land or other property. Such a restraint is valid only when it is reasonable after weighing its utility against the harm it causes to alienability.
Rina Rahman leased commercial space to Roland Rhodes under a lease requiring her consent before she could sell her interest. When Rina found a buyer and sought Roland's approval, he demanded higher rent as a condition. The court evaluated whether Roland could withhold consent under the lease terms and held the restraint valid only if consent could not be withheld unreasonably.
Raphael Rivera purchased land subject to a recorded servitude limiting future sales to buyers who would continue operating a historic mill. When Raphael sought to sell to a residential developer, the neighboring owners invoked the servitude. The court weighed the servitude's utility in preserving the mill against its impact on marketability and invalidated the restraint as unreasonable.
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Ruby Rivera subleased her storefront to Ryan Roberts with a clause requiring the landlord's consent to any further assignment. Ryan located a qualified assignee but the landlord refused without explanation. The court examined whether the landlord's refusal was reasonable under the lease and enforced the restraint only to the extent consent could not be withheld arbitrarily.
Rising Sun Electronics held a long-term lease and attempted to assign it to a new operator. The landlord refused consent and demanded increased rent and stricter terms. The assignee sued for declaratory relief claiming the refusal constituted an unlawful restraint. The court applied the rule that leasehold interests are freely alienable absent a valid consent requirement.
Radiant Technologies acquired property subject to a long-term purchase option that effectively blocked any sale for decades. When the company sought financing and a buyer, the option holder asserted rights under the recorded instrument. The court assessed whether the option created an unreasonable restraint on alienation under state perpetuities and restraint doctrines.
Raymond Ramos retained an attorney to draft a will containing a gift over that inadvertently created a restraint on future sales of devised real estate. After the testator's death the devisees discovered the restriction prevented ready transfer. The court considered whether the drafting error exposed the attorney to liability for creating an invalid restraint.
A landlord may withhold consent only when the lease grants an absolute right or when the proposed assignee fails to meet objective commercial standards such as financial responsibility. The restraint remains valid provided the landlord's decision is not arbitrary.
A court weighs the utility of the restraint in preserving a legitimate purpose against the injurious effect on the property's marketability and alienability. If the harm to transferability outweighs the benefit, the restraint is invalid.
An absolute bar preventing any transfer for the entire term is generally invalid because it eliminates alienability without a reasonable justification tied to the parties' negotiated bargain.
A tenant or assignee may obtain declaratory or injunctive relief declaring the restraint unenforceable and may recover damages if the withholding of consent caused quantifiable loss.
…(1980) § 8:15, at pp. 578-579. See also 2 Powell on Real Property, ¶ 246[1], at p. 372.97.) The common law's hostility toward restraints on alienation has caused such restraints on leasehold interests to be strictly construed against the lessor. (See Schoshinski, supra , § 8.16, at pp. 583-588; 2 Powell, supra , ¶ 246[1], at pp. 372.97,…