Assignment And Subletting

11/1/2016 | Articles & Alerts Over the past several years as businesses struggle to ride out the tough economic times, they have had no choice but to downsize.Tied to commercial leases for more office or retail space than they need, an assignment of the lease or the subletting of the extra space seems like an attractive way of saving on expenses.

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If an assignment or subletting comes with potential profit, the landlord typically expects to share in that profit.

Often, the split is 50-50, but make sure to recoup any expenses you incur in getting an assignee or subtenant before a profit split.

Be particularly leery of a clause that says a change in more than 50 percent of the company’s stock ownership will be deemed an assignment that is prohibited without the landlord’s approval.

A prohibited assignment can result in the landlord terminating a favorable lease.

The assignment and subletting clause of an office lease can prove to be a very important provision.

Typically, the landlord’s lease form states that the tenant may not assign or sublet the lease without the landlord’s prior consent, with such consent to be granted or withheld at the sole discretion of the landlord.As with an assignment, the tenant remains liable to the landlord on the original commercial lease.With a sublet, the landlord does not have a legal right to enforce the terms of the original lease or sublease against the subtenant in the event of breach.With an assignment, if the assignee breaches, the landlord has the right to enforce the terms of the lease against the assigning tenant or the assignee tenant. A sublease is a separate contract between the transferring tenant and the subtenant.The sublease may transfer all or a part of the leased premises, for all or a part of the lease term, and under terms that are similar or materially different from the lease.An assignment of a lease is the transfer by the tenant of all of the tenant’s rights and interest in the lease.In an assignment, although the assignee tenant effectively steps into the shoes of the assigning tenant, the assigning tenant continues to remain liable to the landlord on the lease.While we make no promises, should our leasing agent be successful in finding a suitable assignee(s), 1/2 month’s rent plus HST will apply.In the entire universe of legal and business terms that makes up the modern-day commercial lease, there are very few provisions that can change the world of the landlord or tenant.There are many different practical and legal considerations involved in negotiating and documenting the terms of an assignment or sublease including the legal consequences to the tenant under the assignment or sublease if landlord terminates the lease.Therefore, an experienced real estate attorney should be consulted so that the parties understand the consequences of such transactions and their competing interests are protected.

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Comments Assignment And Subletting

  • Assignment and Subletting Part Two - Ravid Law Group
    Reply

    Assignment and Subletting Part Two. March 2014. In part one of this article discussing the basics of assignment and subletting, we covered issues surrounding a landlord’s consent to or denial of an assignment or sublease and the types of factors a landlord may consider before deciding whether to consent to the transaction.…

  • ASSIGNMENT AND SUBLETTING -
    Reply

    Assignment and subletting A Primer for Commercial Landlords and Tenants When seasoned businesses are faced with what to do with excess rental space or need to cut costs during a financial downturn, they regularly turn to the assignment and subletting provisions of their lease.…

  • Jack Fersko - Outline of Issues Concerning Assignment and Subletting.
    Reply

    Assignment vs. Sublease - Generally a Assignment - a transfer of the entire leasehold space for remainder of the term. i Note Assignment pro tanto - an assignment of all rights under a lease for less than the full space. b Sublease - a transfer of less than the entire leasehold space or a transfer of less than the full term.…

  • LeaseMatrix Subletting vs. Assigning a Commercial Lease What You.
    Reply

    Depending upon the landlord’s requirements and the tenant’s situation, either a sublease or an assignment of the lease can be the way to go. The first thing guiding the choice should be the terms of the original lease. It may include provisions for subleasing or assignment.…

  • Assignment, Subletting and Termination Connecticut Law Tribune
    Reply

    Assignment, Subletting and Termination. The assignment and subletting clause is also the repository of landlord controls that permits landlords to participate in the upside of improving market.…

  • How To Circumvent A Lease’s Assignment And Subletting Restrictions.
    Reply

    A prohibition against assignment does not prohibit subletting, and vice versa. In most jurisdictions, merely agreeing that there is to be no subletting of the premises does not prohibit subletting of part of the leased premises. • A bar against assignment in the lease does not bar a subtenant from assigning its sublease.…

  • Sublet and Assignment Clauses in Commercial Leases LandlordTenantLawFirms
    Reply

    Assignment. By contrast, an assignment occurs when you transfer all your space to someone else called an assignee for the entire remaining term of the lease. As with a sublet, you are free to choose your assignee and determine the rent unless your lease says otherwise. In an assignment, the new tenant pays rent directly to the landlord.…

  • No Assignment or Subletting. - RealDealDocs
    Reply

    No Assignment or Subletting. Tenant shall not, without the prior written consent of Landlord, assign or hypothecate this Lease or any interest herein or sublet the Premises or any part thereof, or permit the use of the Premises or any part thereof by any party other than Tenant.…

  • Things to Know About Subletting & Subleasing Tips ForRent
    Reply

    What Is Subletting or Subleasing? Subleasing is when the person whose name is on the lease finds another person to pay the monthly rent. That person is the subtenant. This can happen if you’re not living in your apartment temporarily or if you need to leave your city for some reason and cannot break your lease.…

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