## Facts

- The City of Gainesville leased airport premises to Sopwith Camel, Inc. to provide aircraft-fueling services.
- Sopwith subleased the premises to Dewkat II, Inc., and the City approved the sublease.
- Dewkat borrowed money from Wauchula State Bank and mortgaged its leasehold interest as security; the City approved this mortgage.
- The bank’s mortgage and note were later assigned to Charter Air Center and then to Charter Leasing Corp. without the City’s knowledge or approval.
- Dewkat defaulted on the loan, and Charter Leasing sued to foreclose the leasehold mortgage and sought declaratory relief.
- The City was joined as a defendant and argued the lease was automatically terminated because the unapproved mortgage assignments violated a lease clause requiring City consent for transfers of interests in the lease (with an exception for financing to a bank or lending institution).
- The trial court entered a final judgment of foreclosure for Charter Leasing, ruling the mortgage assignments were not governed by the lease’s assignment/consent provision.

## Issues

1. Whether a lease consent-to-assignment clause covering “any transfer of any interest in the lease” applies to assignments of a mortgage and note secured by the leasehold.
2. If the clause applies, whether unapproved mortgage assignments created a lease default that automatically terminated the lease and defeated foreclosure rights.

## Decision

- The First District Court of Appeal affirmed the foreclosure judgment for Charter Leasing.
- The court held that the assignments at issue transferred only the mortgage and note, not the leasehold estate, and therefore did not require the City’s consent under the lease’s assignment provision.
- Because the consent clause was not triggered, no lease default or automatic termination occurred based on the mortgage assignments, and foreclosure against the leasehold interest was permitted.

## Legal Principles

- An assignment of a mortgage and note secured by a leasehold interest is distinct from an assignment of the leasehold estate.
- A lease restriction requiring landlord consent for assignment of the lease (or transfers of leasehold rights) does not, without clear language, reach downstream assignments of the lender’s mortgage and note.
- Absent a triggering lease default, a valid leasehold mortgage lien remains enforceable through foreclosure against the tenant’s leasehold interest.

## Conclusion

The appellate court upheld foreclosure of a leasehold mortgage, concluding that unapproved assignments of the mortgage and note did not constitute an assignment of the lease requiring the City’s consent and therefore did not terminate the lease or bar enforcement of the mortgage lien.


City of Gainesville v. Charter Leasing Corp., 483 So. 2d 465 (Fla. 1st DCA 1986)