Twelve Oaks Tower I, Ltd. v. Premier Allergy, Inc

In Twelve Oaks Tower I, Ltd. v. Premier Allergy, Inc., 938 S.W.2d 102 (Tex. App.--Houston 14th Dist. 1996, no writ), a doctor entered into a lease for office space in a medical office building. Id. at 106. The building was later foreclosed upon by the FDIC. Subsequently, the doctor entered into an asset purchase agreement, whereby the doctor sold substantially all of his assets to Premier. The agreement also provided that the doctor would assign the lease to Premier. Premier never actually took over the lease, but paid the rent, took possession of the office, and renamed it. The doctor died prior to FDIC's sale of the property to Twelve Oaks in July of 1992. After the sale, Premier made rental payments to Twelve Oaks, but informed Twelve Oaks at the end of August 1992 that it was terminating the lease. Id. at 107. In December, the doctor's estate informed Twelve Oaks that the lease terminated upon the doctor's death. Twelve Oaks brought suit against Premier and the doctor's estate. The jury found that the doctor and Premier agreed to an assignment of the lease and that the lease was terminated in December of 1992. On appeal, Premier argued that there was no assignment of the lease by the doctor as a matter of law, because no landlord ever consented to the assignment. Id. at 110. The Fourteenth Court of Appeals disagreed. The court held that Premier was estopped from claiming that the doctor never assigned the lease, because it availed itself of the benefits of the lease. Id. at 111. As for Premier's argument that the landlord never consented to the assignment, the court noted that the argument was not Premier's to make. The court explained: "It is well established that a provision in a lease prohibiting assignment without the landlord's consent is a provision for the landlord's benefit and may be waived by the landlord. In other words, a tenant's failure to obtain the required consent does not render the assignment void, rather, it is voidable at the option of the lessor. The lease does not terminate unless the landlord undertakes to terminate it or declare a forfeiture or reenter. Id. at 112 . The court noted that "a lessor waives its right to forfeit a lease for a tenant's failure to obtain consent before assigning or subleasing if it accepts rents after the assignment or sublease." Id.