Opinion ID: 2180190
Heading Depth: 1
Heading Rank: 5

Heading: The Waiver of the Prohibition Against Assignment

Text: Despite the apparent violation of § 12 of the lease agreement, the question remains whether U Street waived the prohibition on assignment set forth in § 12 of the lease agreement. According to POWELL ON PROPERTY, continued acceptance of rent coupled with knowledge of the assignment generally is construed as a waiver, id. at 17-50. As the general partner of U Street, Ms. Myers continued to accept rent payments directly from Mr. Samuel, even after she wrote Mr. Gebremedhin on March 18 that she considered him the tenant under the lease agreement, and even after she received a letter from Mr. Gebremedhin on March 23, 2000, announcing his return of the keys to the property, and thus relinquishing or waiving any control over the leasehold, due to a default in rent payments. Subsequent to Mr. Gebremedhin's action, in April 2000, Mr. Samuel made a rent payment and Ms. Myers gave him a key to gain access to the property. She claimed she did so to permit him to remove his property. Yet, in late May and June, Mr. Samuel and Ms. Touelde gave Ms. Myers rent payments of $10,500 and $2,100. Again, on July 2000, Mr. Samuel made payments of $4,200 and $2,100 to Ms. Myers, and on July 11, 2000, she gave him a new key to the property, although it did not work. When she accepted these rent payments from Mr. Samuel, Ms. Myers knew she had signed the Assignment of Lease on November 24, 1998, assigning the lease to Sarete. Although Ms. Myers claimed she signed the Assignment of Lease as a favor to Mr. Samuel to enable him to obtain a liquor license, nothing but her testimony supports that claim, and nothing in the record shows that Ms. Myers ever repudiated the Assignment of Lease. As indicated, the trial court did not address the waiver issue directly. Rather, in drawing legal conclusions concerning the assignment, the trial court focused on the lack of the landlord's consent to the assignment, despite the landlord's signature affixed to the Assignment of Lease. The trial court also emphasized the appellants' alleged fraudulent misrepresentation regarding a condition precedent to the assignment's effectiveness: On November 24, 1998 an [A]ssignment of Lease was entered into among Ms. Alyson Myers (Landlord), Mr. Gebremedhin (Assignor), and Sarete, Inc. (Assignee). The Assignment of [L]ease agreement acknowledged ... that the Lease requires that the Tenant thereunder obtain Landlord's prior written consent to any assignment of Tenant's interest in the lease. Additionally, section 6 of the Assignment of Lease agreement provides that[:] This Assignment and Assumption of Lease is specifically conditioned upon Assignee's purchase from the Assignor of the assets of Cafe Tango. It is notable that section 6 was included as a condition precedent to the Assignment despite the fact that the transfer of the business had already taken place prior to the execution of the Assignment of Lease agreement, as evidenced by the various documents executing the transfer of control and sale of Sarete, Inc. D/b/a Cafe Tango. Thus, the Plaintiff[ ][s] fraudulently misrepresented a material condition of the Assignment. The transfer had already taken place rendering the assignment void.