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Your guide to landlord-tenant law, landlord-tenant law.
At some point during their lives most people will be involved with the rental of real estate, either as landlord or tenant. Although the problems facing a landlord are just as perplexing at times as those facing the tenant, the problems facing the tenant are the general subject matter of this pamphlet.
Laws that affect landlords and tenants can vary significantly from city to city. This pamphlet provides general information about being a tenant in Illinois, but your municipality may provide you with greater protection under the law.
The relationship between landlord and tenant arises from an agreement called a lease by which one party occupies the real estate of another with the owner's consent.
No particular words are necessary to create a lease, but generally the terms of a lease include a description of the real estate, the duration of the agreement, the rent, and the time of payment. In Illinois, a lease need not be in writing unless it is for a term greater than one year. Although the terms of an oral lease may be difficult to determine, a party may be bound to the terms of an oral agreement just as much as a written one.
The most common form of lease is a written agreement that spells out all of the terms and conditions binding upon both parties. If a lease is not in writing, it will probably be a periodic lease, which is one without a definite term. The period is generally determined by the frequency of the rental payments; for example: week to week, month to month, year to year.
Termination of the lease
If a lease is not for a specific term, it may be terminated by either party with proper notice.
- For year-to-year tenancies, other than a lease of farmland, either party may terminate the lease by giving sixty days' written notice at any time within the four months preceding the last sixty days of the lease.
- A week-to-week tenancy may be terminated by either party by giving seven days' written notice to the other party.
- Farm leases generally run for one year. Customarily, they begin and end in March of each year. Notice to terminate must be given at least four months before the end of the term.
- In all other lease agreements for a period of less than one year, a party must give thirty days' written notice. Any notice given should call for termination on the last day of that rental period.
When a lease is written, the expiration date is usually stated in the document. No termination notice is necessary in such a case. Be aware that your lease may also require notice of termination in a specific form, or greater notice than the minimum required by law.
Termination for breach
The most common breach of a lease is non-payment of rent. In this case the landlord must serve a five-day notice upon the delinquent tenant. Five days after such notice is served, the landlord may commence eviction proceedings against the tenant. If, however, the tenant pays the rent within those five days, the landlord may not proceed with an eviction. The landlord is not required, however, to accept rent that is less than the exact amount due. If the landlord accepts a tender of a lesser amount of rent, it may effect the rights to proceed under the notice.
The notice itself does not end the lease but merely states that at the end of the notice period the landlord can consider the lease ended and bring a suit for possession.
If a landlord wishes to terminate a lease because of a violation of the lease agreement by the tenant, other than for non-payment of rent, he or she must serve ten days' written notice upon the tenant before eviction proceedings can begin. Acceptance of rent after such notice is a waiver by the landlord of the right to terminate the lease unless the breach complained of is a continuing breach.
Service on demand notice
Notice may be served upon tenant by delivering a written or printed copy to the tenant or by leaving the same with some person above the age of thirteen (13) years who lives at the party's residence or by sending a copy of the notice to the party by certified or registered mail with a return receipt from the addressee. If no one is in the actual possession of the premises, then posting notice on the premise is sufficient.
Subletting or assigning the lease
Often, written leases prohibit the tenant from subletting the premises without the written consent of the landlord. Such consent can- not by withheld unreasonably, but the prohibition is enforceable under the law. If there is no such prohibition, then a tenant may sub- lease or assign his lease to another. In such cases, however, the tenant will remain responsible to the landlord unless the landlord releases the original tenant. A breach of the sub-lease will not change the initial relationship between the landlord and tenant.
Remedies of a tenant
If the landlord has breached the lease by failing to meet their duties under the lease, certain remedies arise in favor of the tenant:
- The tenant may sue the landlord for damages sustained as a result of the breach.
- If a landlord fails to maintain a leased residence in a livable condition, the tenant may be able to vacate the premises and terminate the lease under the theory of "constructive eviction."
- The failure of a landlord to comply substantially with local housing codes may be a breach of the landlord's "implied warranty of habitability" (independent of any written lease provisions or oral promises) which the tenant may assert as a defense to an eviction based on the non-payment of rent. However, breach by landlord of local housing codes does not automatically entitle a tenant to with- hold rent. The obligation to pay rent continues as long as the tenant remains in the leased premises and to assert this defense successfully, the tenant will have to show that his damages resulting from landlord's breach of this "implied warranty" equal or exceed the rent claimed due.
A landlord's breach and tenant's damages may be difficult to prove. Because of the limited and technical nature of these rules, ten- ants should be extremely cautious in withholding rent and should probably do so only after consulting an attorney.
Breach by the tenant
If rent is not paid the landlord may (1) sue for the rent due or to become due in the future and (2) terminate the lease and collect any past rent due.
If a tenant fails to vacate the leased premise at the end of the lease term, the tenant may become liable for double rent for the period of holdover if the holdover is deemed to be willful. The tenant can also be evicted.
If the tenant damages the premises, the landlord may sue for the repair of such damages.
Under the federal Fair Housing Act and Illinois law, it is unlawful for a landlord to discriminate in the leasing of a dwelling house, flat, or apartment against prospective tenants who have children under the age of 14 years. It is also unlawful for a landlord to discriminate against a tenant on the basis of race, religion, sex, national origin, or disability.
Provisions in a lease agreement that exempt a landlord from liability for damages to persons or property caused by the negligence of the landlord are viewed as being against public policy and are therefore unenforceable. Under certain circumstances in the event of non-payment of rent the landlord may hold the furniture and personal property of the tenant until past rent is paid by the tenant.
A tenant is usually required to deposit with the landlord a sum of money prior to occupying the property. This is usually referred to as a security deposit. This money is deemed to be security for any damage to the premises or non-payment of rent. The security deposit does not relieve the tenant of the duty to pay the last month's rent. It must be returned to the tenant upon vacating the premises, if no damage has been done beyond normal wear and tear and the rent is fully paid.
If a landlord fails to return the security deposit promptly, the tenant can sue to recover that portion of the security deposit to which the tenant is entitled. In some jurisdictions, when a landlord wrongfully withholds a tenant's security deposit the tenant may be able to recover additional damages.
A landlord leasing residential real estate containing five or more units who receives a security deposit may not withhold any part of that deposit as compensation for property damage unless he furnishes to the tenant, within thirty days of the date the tenant vacates, a statement of damage allegedly caused by the tenant and the estimated or actual cost of repairing or replacing each item on that statement. If no such statement is furnished within 30 days, the landlord must return the security deposit in full within 45 days of the date the tenant vacated.
If a building contains 25 or more residential units, the landlord must also pay interest on the deposit from the date it was paid, if held more than 67 months. (Interest is calculated at the rate paid by the largest bank in Illinois, as determined by total assets, on a passbook security account.)
The above statements regarding security deposits are based on state law. However, some municipalities may impose additional obligations. For example, the city of Chicago required interest to be paid on all security deposits regardless of the number of rental units.
Landlord and tenant matters can become complex. Both landlord and tenant should consult an attorney for assistance with particular problems. For more information about your rights and responsibilities as a tenant, including specific landlord-tenant laws in your municipality, contact your local bar association, or visit the Illinois Tenants Union at www.tenant.org .
Prepared by the Illinois State Bar Association's Real Estate Law Section (2017)
This pamphlet is prepared and published by the Illinois State Bar Association as a public service. Every effort has been made to provide accurate information at the time of publication.
For the most current information, please consult your lawyer. If you need a lawyer and do not have one, call Illinois Lawyer Finder at (800) 922-8757 or online www.IllinoisLawyerFinder.com
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Illinois Assignment of Lease by Landlord
Illinois landlords, assign your tenant's lease to a new owner of the property with this easy-to-use Assignment of Lease by Landlord form.
- The Assignment is between the current landlord, the purchaser of the property (new landlord) and the tenant.
- The current landlord assigns the lease to the new landlord, and the tenant covenants to pay rent to the new owner and continue to perform the tenant's obligations under the lease.
- The current landlord and the purchaser agree to indemnify each other against any claims or actions arising out of any breach of the terms of the assignment.
- This form can be used for either commercial or residential rental properties.
- Available in MS Word format.
- Intended to be used only in the State of Illinois.
Illinois Notice of Sale of Rental Premises
Illinois 10 Day Eviction Notice
Illinois landlords, do you need to evict a tenant for cause serve the tenant with this 10 day eviction notice..
- The Notice informs the tenant of the nature of the lease violation(s), and that the tenancy will be terminated 10 days after the date the Notice is served.
- The form includes an Affidavit and Proof of Service , which must be sworn by the person who served the Notice.
- This is a reusable legal form which can be used as often as you require.
Illinois 30 Day Termination Notice
Il landlords, terminate a tenant's rental agreement with this illinois 30 day termination notice..
- The Notice must be served on the tenant in accordance with State landlord tenant laws.
- The Notice informs the tenant that the tenancy will be terminated on the date specified in the notice, which must be at least 30 days prior to the end of the monthly lease term.
- An Affidavit and Service of Notice is included to record the details of how the Notice was served on the tenant.
- This is a reusable legal form. Buy, download, use as often as you require.
Illinois 5 Day Notice for Unpaid Rent
Illinois Lease Co-Signer Agreement
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Assignment and Assumption of Leases (Commercial Real Estate Purchase and Sale) (IL) | Practical Law
Assignment and Assumption of Leases (Commercial Real Estate Purchase and Sale) (IL)
Practical law standard document w-000-9952 (approx. 16 pages).
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When a new landlord buys a rental property, all existing oral or written leases are still valid. They cannot kick anyone out without proper notice just because they are the new owner. They also cannot force tenants to sign a new lease, pay a different rent, or otherwise change the terms of the lease. The new owner must tell the tenants in writing that they are the new landlord. The old landlord must give the new landlord:
- Copies of all leases
- Security deposits with interest, if interest is required to be given
- Records of rent payments and
- All other documentation about the tenants
Both new and old landlords are responsible for the tenant's security deposit. If a tenant moves out of the unit, the new landlord cannot claim they do not have to pay the deposit. This is true even if the new landlord did not get the tenant’s security deposit from the old landlord. If neither landlord pays the security deposit when due, the tenant has the option of suing either landlord or both but can only recover the deposit from one of them.
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Assignment of Lease
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What is an Assignment of Lease?
The assignment of lease is a title document that transfers all rights possessed by a lessee or tenant to a property to another party. The assignee takes the assignor’s place in the landlord-tenant relationship.
You can view an example of a lease assignment here .
How Lease Assignment Works
In cases where a tenant wants to or needs to get out of their lease before it expires, lease assignment provides a legal option to assign or transfer rights of the lease to someone else. For instance, if in a commercial lease a business leases a place for 12 months but the business moves or shuts down after 10 months, the person can transfer the lease to someone else through an assignment of the lease. In this case, they will not have to pay rent for the last two months as the new assigned tenant will be responsible for that.
However, before the original tenant can be released of any responsibilities associated with the lease, other requirements need to be satisfied. The landlord needs to consent to the lease transfer through a “License to Assign” document. It is crucial to complete this document before moving on to the assignment of lease as the landlord may refuse to approve the assignment.
Difference Between Assignment of Lease and Subletting
A transfer of the remaining interest in a lease, also known as assignment, is possible when implied rights to assign exist. Some leases do not allow assignment or sharing of possessions or property under a lease. An assignment ensures the complete transfer of the rights to the property from one tenant to another.
The assignor is no longer responsible for rent or utilities and other costs that they might have had under the lease. Here, the assignee becomes the tenant and takes over all responsibilities such as rent. However, unless the assignee is released of all liabilities by the landlord, they remain responsible if the new tenant defaults.
A sublease is a new lease agreement between the tenant (or the sublessor) and a third-party (or the sublessee) for a portion of the lease. The original lease agreement between the landlord and the sublessor (or original tenant) still remains in place. The original tenant still remains responsible for all duties set under the lease.
Here are some key differences between subletting and assigning a lease:
- Under a sublease, the original lease agreement still remains in place.
- The original tenant retains all responsibilities under a sublease agreement.
- A sublease can be for less than all of the property, such as for a room, general area, portion of the leased premises, etc.
- Subleasing can be for a portion of the lease term. For instance, a tenant can sublease the property for a month and then retain it after the third-party completes their month-long sublet.
- Since the sublease agreement is between the tenant and the third-party, rent is often negotiable, based on the term of the sublease and other circumstances.
- The third-party in a sublease agreement does not have a direct relationship with the landlord.
- The subtenant will need to seek consent of both the tenant and the landlord to make any repairs or changes to the property during their sublease.
Here is more on an assignment of lease here .
Parties involved in lease assignment.
There are three parties involved in a lease assignment – the landlord or owner of the property, the assignor and the assignee. The original lease agreement is between the landlord and the tenant, or the assignor. The lease agreement outlines the duties and responsibilities of both parties when it comes to renting the property. Now, when the tenant decides to assign the lease to a third-party, the third-party is known as the assignee. The assignee takes on the responsibilities laid under the original lease agreement between the assignor and the landlord. The landlord must consent to the assignment of the lease prior to the assignment.
For example, Jake is renting a commercial property for his business from Paul for two years beginning January 2013 up until January 2015. In January 2014, Jake suffers a financial crisis and has to close down his business to move to a different city. Jake doesn’t want to continue paying rent on the property as he will not be using it for a year left of the lease. Jake’s friend, John would soon be turning his digital business into a brick-and-mortar store. John has been looking for a space to kick start his venture. Jake can assign his space for the rest of the lease term to John through an assignment of lease. Jake will need to seek the approval of his landlord and then begin the assignment process. Here, Jake will be the assignor who transfers all his lease related duties and responsibilities to John, who will be the assignee.
You can read more on lease agreements here .
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Assignment of Lease From Seller to Buyer
In case of a residential property, a landlord can assign his leases to the new buyer of the building. The landlord will assign the right to collect rent to the buyer. This will allow the buyer to collect any and all rent from existing tenants in that property. This assignment can also include the assignment of security deposits, if the parties agree to it. This type of assignment provides protection to the buyer so they can collect rent on the property.
The assignment of a lease from the seller to a buyer also requires that all tenants are made aware of the sale of the property. The buyer-seller should give proper notice to the tenants along with a notice of assignment of lease signed by both the buyer and the seller. Tenants should also be informed about the contact information of the new landlord and the payment methods to be used to pay rent to the new landlord.
You can read more on buyer-seller lease assignments here .
Get Help with an Assignment of Lease
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Meet some of our Assignment of Lease Lawyers
Ayelet G. Faerman knows what influencers mean to brands today. With experience as legal counsel for a beauty brand for over 5 years, and overseeing multiple collaborations, Ayelet has experienced the rise of influencer marketing. As the founder and managing partner of Faerman Law, PA her practice focuses on influencer relations including a specialization in contract negotiations.
Melissa D. Goolsarran Ramnauth, Esq. is an experienced trial-winning trademark and business attorney. She has represented large businesses in commercial litigation cases. She now represents consumers and small businesses regarding federal trademarks, contracts, and more. Her extensive litigation knowledge allows her to prepare strong trademark applications and contracts to minimize the risk of future lawsuits.
Benjamin is an attorney specializing in Business, Intellectual Property, Employment and Real Estate.
Attorney Gaudet has worked in the healthcare and property management business sectors for many years. As an attorney, contract drafting, review, and negotiation has always been an area of great focus and interest. Attorney Gaudet currently works in Massachusetts real estate law, business and corporate law, and bankruptcy law.
I am a graduate of Cornell University and Rutgers University School of Law—Newark, and have been admitted to the state and federal bars for New Jersey, and have been engaged in the full- or part-time practice of law since my admission to the bar in 1991. My practice centers on civil litigation; wills, trusts, and estates; and ediscovery review and management. I have extensive experience in regulatory compliance in the financial services industry, as well as privacy laws in the U.S. and E.U.
I am a general practice lawyer with 21 years of experience handling a wide variety of cases, both civil and criminal
I help start-ups, small businesses, and people realize their potential by leveraging my legal and technological experience. Legally skilled in employment law, intellectual property, corporate law, and real estate transactions.
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Illinois Lease Agreement Templates (7)
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Updated November 06, 2023
An Illinois lease agreement is a document between a landlord and tenant for the use of residential or commercial property in exchange for the payment of rent. The tenant should first view the space and, if interested, should request to submit their credit and background details through a rental application.
Once the landlord has reviewed their credentials and the tenant is approved, the negotiations will begin for rent, security deposits, and the responsibilities of each party.
Agreement Types (7)
Required disclosures (6).
- Carbon Monoxide Detectors – A landlord must provide a carbon monoxide detector within 15 feet of where the tenant sleeps. Information regarding the detectors must be listed in the lease. 
- Concession Granted – Any concession for rent is required to be mentioned in the lease. When entered into the page, the header with the words “Concession Granted” should be at least one-half (1/2) inches in height on the document. Failure on behalf of the landlord to write this, if there is a concession, is considered a misdemeanor in the State of Illinois. 
- Lead-Based Paint Disclosure – Any residence constructed prior to 1978 is required to have this addendum attached to any agreement to inform the tenant(s) of this hazard.
- Radon Disclosure (conditional) – The landlord is not required to test for radon, but if they do, and the landlord finds out that radon exists on the premises, they must relay the information to the tenant. This does not qualify for residences on the third (3rd) floor or higher in a residential complex. In addition, the IEMA-approved Radon Disclosure Pamphlet should be given to the tenant. 
- Smoke Detectors – It is the responsibility of the landlord to provide smoke detectors throughout the premises. Although, during the lease term, the tenant will be responsible for their maintenance and functionality. Use the Carbon Monoxide and Smoke Detector Agreement to ensure a tenant maintains the detectors throughout the lease term. 
- Shared Meter (conditional) – If a tenant must pay a portion of a master utility, the landlord must share the formula to calculate the tenant’s responsibility. 
Maximum Amount – No maximum.
Collecting Interest – If the landlord owns more than twenty-five (25) rental units, they will be forced to place the security deposit in an interest-bearing account to be at least the interest rate in the State of Illinois on the previous December 31 of the most recent year. 
- Itemized List – If deductions are made to the tenant’s security deposit to cover the costs of necessary cleaning or repairs, the landlord must provide an itemized statement of the damage and the estimated or actual costs of repair within 30 days. 
Returning – The landlord has 30 days to release the security deposit to the tenant. If there are deductions to the deposit, then the landlord must list and send the deductions to the tenant(s) within 30 days and release the remaining security deposit amount within 15 days after that (45 days total). 
When is Rent Due?
Grace Period – There is a 5-day grace period for rent in Illinois. A late fee penalty cannot be issued until the sixth (6th) day. If rent is not paid, the landlord has the option to give a 5-day eviction notice to the tenant. 
Maximum Penalty – $20 or 20% of the rent amount, whichever is greater. 
NSF Fee – $25 
Withholding Rent – There is no state law in Illinois that allows a tenant to withhold rent. Illinois law does allow tenants, under certain circumstances, to pay for the costs of necessary repairs themselves and deduct those costs from their next rent payment. 
Right to Enter (Landlord)
Absence – There is no Illinois state law specifying the number of days that a tenant must be absent for a rental property to be considered abandoned.
Breaking the Lease – If a tenant terminates a lease before the lease end date, the landlord must take reasonable measures to mitigate the damages.  If the landlord is unable to find a new tenant for the property, the tenant may be liable for the remaining rent owed on the lease.
Tenant’s Utility Shutoff – If a lease makes a tenant responsible for paying for utilities, and the tenant fails to pay, the landlord can deliver a 10-day notice to quit. 
Unclaimed Property – There is no Illinois state law dictating the steps a landlord must take if a tenant leaves personal items on the property after the lease ends.
- Public Act 094-0741, Section 10
- 765 ILCS 730/3
- 420 ILCS 46/10
- 425 ILCS 60/3(d)
- 765 ILCS 740/5(a)
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- 765 ILCS 742/5
- 735 ILCS 5/9-213.1
- 735 ILCS 5/9-210
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Commercial Landlord's Reasonable Consent to Sublease or Assign
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What is an Assignment of a Commercial Lease?
A commercial lease assignment occurs when a tenant transfers all of their interest in a leased property to another party prior to the expiration of the original lease. The original tenant can be released from liability in the event that the new tenant breaches the lease.
What Does it Mean to Assign a Commercial Lease?
It is very common when businesses merge or relocate to a new location that they will be stuck with the lease of their original location. In other situations, a company may seek to assign or sublet their commercial lease when they outgrow their commercial location or they cannot make their lease payments in a timely manner.
It is common in all of these situations for the business to attempt to assign or sublet their commercial lease. The assignment of a commercial lease refers to when a party to the lease transfers all of their interests and obligations of that lease to a third party.
Usually, in commercial settings, the commercial tenant will assign their interests in the lease to another commercial tenant. In addition, a landlord may assign their interests in the lease to another landlord.
It is important to note, however, that many commercial leases will include restrictions on the ability to assign. Therefore, it is important for an individual to review their lease to determine if assigning the lease is a possibility.
The lease will outline all of the rights that the commercial tenant maintains over the property. Generally, the majority of consumer protection laws which apply to residential leases do not apply to commercial leases.
Depending on the state laws, however, restrictions on assignments of commercial leases may be valid if those restrictions are considered reasonable.
What Does it Mean to Sublet a Commercial Lease?
Commercial subleases arise when a company transfers a portion of their lease rights to a third party for a temporary time period. A company may either sublet a portion of their office space while they continue to work in that space or they can sublet the entire office location until the end of their lease or for a specific period of time.
For example, suppose a seasonal company, a Halloween store, signed a year-long fixed lease term, they may seek to sublet that property for the 8 months during which their store does not operate in order to generate income to pay the rent. It is important to note that, when subletting, the original tenant, called the sublessor, is still obligated to the landlord for the terms outlined in the lease.
This means that a sublessor maintains privity of estate and privity of contract with the landlord. The sublessee, or the individual or entity that utilizes the lease for a temporary period of time, is only liable to the original tenant for the terms of lease, not the landlord.
In other words, the original lease between the original commercial tenant and the landlord remains effective throughout the sublease period. In addition, the original tenant is responsible for the new tenant.
This means that the sublessee would approach the original tenant with any concerns related to the rental property and would pay rent directly to them. It has become increasingly popular for big box retail stores to sublease corners of their facilities to smaller retail stores.
This is also popular for startups which do not have enough capital to lease an entire unit and, instead, prefer to cut costs by sharing an office space with other businesses. For example, in a grocery store or a shopping center , there may be several other types of businesses subleasing from the main store, including:
- Nail salons;
- Ophthalmology services;
- Cell phone repair shops;
- Food vendors.
Other reasons a business may desire to sublease or to seek out a sublease may include:
- Lower rates: The rate for a commercial sublease, especially a short-term lease, may be lower than lease rates;
- Flat rental payment structure: Commercial leases often have flat rental payment structures that have no unusual surprises;
- Fewer obligations: In commercial subleases, the sublessees typically have limited obligations to repair and maintain common areas;
- Better bargaining position: A sublease may put the sublessee in an advantageous position when it comes to negotiating a new lease with the landlord directly, for example, when the main lease ends;
- Less complex lease: Commercial subleases are usually not as complex as commercial leases; or
- Additional income: One of the most common reasons for subleasing is to gain an additional source of rental income in order to make or lessen lease payments.
There are several advantages for subletting or seeking out a sublease agreement for a company. There are, however, also disadvantages for subletting a lease.
For example, being responsible for any late or missed payments from the sublessor that may cause the original renter to default on their lease with the landlord. Additionally, as noted above, as the sublessor, the business is responsible for maintaining the location and completing repairs.
If, however, the lease provides that the landlord has a duty to make repairs , then as the sublessor, the original renter will act as the intermediary to ensure that the repairs are done in a timely manner, meaning that, as a sublessee, repairs may be delayed.
What is a Sublease of a Commercial Lease?
A sublease of a commercial lease occurs when a commercial tenant transfers all or part of their interest in the leased property to another party prior to the expiration of the lease. The original tenant will remain liable for any damages in the event the lease is breached.
Can a Commercial Lease be Assigned or Subleased?
The right of a commercial tenant to assign or sublease a commercial lease is determined by the terms provided in the lease. The terms of a lease may expressly prohibit a tenant from assigning or subletting.
The terms of a lease may also allow a tenant to assign or sublease only with the consent of the landlord or if certain conditions are met. Certain jurisdictions also prohibit landlords from unreasonably withholding consent.
If there is not a provision in the lease stating otherwise, commercial leases can generally be assigned or subleased. It is important to note that the tenant’s ability to assign or sublease a commercial lease can be negotiated at the time the lease is signed or renewed.
What is an Approval Clause?
Numerous commercial leases will contain express provisions stating that the landlord is required to consent to the assignment or sublease of the property if it is reasonable, known as an approval clause. The purpose of these clauses is to protect tenants against liability for damages or risk of forfeiture if the landlord’s consent is improperly withheld.
In general, there must be reasonable commercial objections for a landlord to withhold consent.
What are Reasonable Commercial Objections?
Landlords are permitted to withhold consent for an assignment or sublease based on several factors, including:
- The subtenant’s suitability for the particular locale;
- The subtenant’s suitability for the particular building;
- Legality of the proposed use;
- Nature of the occupancy and whether the proposed use is materially different from the use specified in the original lease; and
- The original tenant’s failure to pay rent.
Do I Need a Lawyer if There are Problems with My Commercial Sublease or Assignment?
Commercial real estate can be very complex. In many cases, commercial leases are drafted by attorneys. If you are a landlord or a commercial tenant who has any issues, questions, or concerns related to a commercial sublease or assignment, it may be helpful to consult with a real estate attorney .
Your lawyer will be able to advise you of your rights and obligations under the lease. In addition, your attorney can represent you in court if necessary.
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LegalMatch Legal Writer
Jennifer joined LegalMatch in 2020 as a Legal Writer. She holds a J.D. from Cumberland School of Law and has been a member of the Alabama State Bar since 2012. She is a certified mediator and guardian ad litem. She holds a B.A. in Criminology and Criminal Justice and a B.A. in Spanish, both from Auburn University. Jennifer’s favorite part of legal work is research and writing. Jennifer enjoyed being a Law Clerk for a distinguished Circuit Judge in Alabama. She is a stay-at-home mom and homeschool teacher of three children. She enjoys reading and long evening walks with her husband.
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Infinity Broadcasting Corporation of Illinois, Plaintiff-appellant, v. the Prudential Insurance Company of America, Defendant-appellee, 869 F.2d 1073 (7th Cir. 1989)
Donald C. Clark, Jr., McDermott, Will & Emery, Chicago, Ill., for plaintiff-appellant.
Thomas F. Geselbracht, Rudnick & Wolfe, Chicago, Ill., for defendant-appellee.
Before CUDAHY, EASTERBROOK and MANION, Circuit Judges.
MANION, Circuit Judge.
Infinity Broadcasting Corporation of Illinois (Infinity) sued its landlord, the Prudential Insurance Company of America (Prudential) for declaratory relief. Infinity claimed that Prudential's construction of a 64-story building next to the building in which Infinity was a tenant would distort and destroy a significant amount of Infinity's radio transmissions, and that such action constitutes (1) a breach of the implied covenant of quiet enjoyment, and thus a breach of Infinity's lease and license; (2) constructive eviction; and (3) an anticipatory repudiation of the lease and license. The district court dismissed Infinity's complaint and amended complaint under Fed. R. Civ. P. 12(b) (6) for failure to state a claim upon which relief could be granted. Infinity appeals these dismissals, and we affirm. 1
Prudential owns a 41-story office building named Prudential Plaza. In 1971 Plough Broadcasting Company obtained a lease for space on the fortieth floor of the building, and a license to install and use a broadcast antenna on the tower of the building. In 1981 Plough exercised its right for a ten-year extension, and in 1984 assigned that lease and license to Infinity. The lease extended through May 31, 1991, exclusively for the operation of a radio broadcast station.
Prudential announced in March of 1985 that it would build a 55-story office building, named Two Prudential Plaza, next to the original Prudential Plaza. It later increased Two Prudential Plaza's planned height to 64 stories. Infinity informed Prudential that the building would block its radio frequencies, distorting reception for some listeners and preventing reception for some others. 2 After some delay, Prudential denied any obligation to protect the broadcast signals, but stated a willingness to meet with Infinity to discuss the problem. Although the parties did meet, they were unable to resolve their differences, and Infinity filed this action. 3
On February 5, 1987, Judge Nordberg, in a well-considered opinion, dismissed Infinity's original complaint pursuant to Fed. R. Civ. P. 12(b) (6). On July 16, 1987, Judge Nordberg dismissed Infinity's amended complaint on the same basis. On appeal, Infinity presents the same three claims it raised to the district court: (1) breach of the covenant of quiet enjoyment; (2) constructive eviction; and (3) anticipatory repudiation.
Prudential initially challenges Infinity's standing to sue. Since Prudential's original contract was with Plough, and since Prudential did not consent to Plough's assignment to Infinity, Prudential alleges that Infinity lacks standing. We disagree. Even though the lease provision required such consent, Infinity still has a basis to file suit. As the district court found, the lease does not absolutely prohibit all assignments, and Prudential did not object to the assignment. Indeed, Prudential has accepted rental payments of at least $24,000 per year from Infinity and treated Infinity as a tenant since that assignment. Prudential therefore cannot now claim Infinity lacks standing to sue under the lease. Woods v. North Pier Terminal Company, 131 Ill.App.3d 21, 86 Ill.Dec. 354, 356, 475 N.E.2d 568, 570 (1st Dist.1985) (if landlord does not treat assigned leasehold as void, restrictions on assignment are deemed waived); Kaybill Corporation, Inc. v. Cherne, 24 Ill.App.3d 309, 320 N.E.2d 598, 607 (1st Dist.1974) (landlord waived his right to prohibit assignment, and gave implied consent, by accepting rent from assignee).
After determining that Infinity had standing, the district court concluded that there was no cause of action under any of Infinity's three theories which would constitute a real controversy warranting declaratory relief, and therefore granted Prudential's motion to dismiss. When reviewing a trial court's dismissal of a claim under Fed. R. Civ. P. 12(b) (6), we assume the well-pleaded allegations of the complaint are true. First Interstate Bank of Nevada v. Chapman & Cutler, 837 F.2d 775, 776 (7th Cir. 1988). A plaintiff fails to state a claim under Rule 12(b) (6) only if he "can prove no set of facts upon which relief may be granted." Id. (citing Conley v. Gibson, 355 U.S. 41 , 45-46, 78 S. Ct. 99, 102, 2 L. Ed. 2d 80 (1957)). All reasonable inferences must be drawn in the light most favorable to the plaintiff. Gomez v. Illinois State Board of Education, 811 F.2d 1030, 1039 (7th Cir. 1987).
Granting a declaratory judgment is within the district court's sound discretion. Cunningham Brothers, Inc. v. Bail, 407 F.2d 1165, 1169 n. 3 (7th Cir.), cert. denied, 395 U.S. 959, 89 S. Ct. 2100, 23 L. Ed. 2d 745 (1969). We may only substitute our own judgment if the exercise of that discretion in denying the declaratory relief was "erroneous." Id. A plaintiff will have raised a cause of action for a declaratory judgment if "the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Preiser v. Newkirk, 422 U.S. 395 , 402, 95 S. Ct. 2330, 2334, 45 L. Ed. 2d 272 (1975) (quoting Maryland Casualty Company v. Pacific Coal and Oil Company, 312 U.S. 270 , 273, 61 S. Ct. 510, 512, 85 L. Ed. 826 (1941)).
The primary issue in this case is whether the interference with Infinity's radio waves from the construction of Two Prudential Plaza constitutes a breach of the covenant of quiet enjoyment. Such a covenant is implied in all leases in Illinois. Blue Cross Association v. 666 North Lake Shore Drive Associates, 100 Ill.App.3d 647, 652, 56 Ill.Dec. 190, 193, 427 N.E.2d 270, 273 (1st Dist.1981). The covenant is breached when the lessor substantially interferes with the lessee's "use and enjoyment of the premises." Id.
Infinity's claim is essentially one for access to the air space surrounding Prudential Plaza. To find that Prudential has interfered with Infinity's right to quiet enjoyment of the premises, we would in effect have to find that Infinity has a right to the use of the air waves extending across the space on which Two Prudential Plaza is being constructed, at least as against use by Prudential. As there is no such easement expressly granted in the lease, we would have to find an implied easement for radio wave transmission with which Prudential could not interfere. The Illinois courts have not directly addressed the issue of easements for radio frequencies, but the Illinois Supreme Court has recognized an analogy between television waves and easements for light and air. People ex rel. Hoogasian v. Sears, Roebuck and Company, 52 Ill. 2d 301 , 287 N.E.2d 677 , 678, cert. denied, 409 U.S. 1001, 93 S. Ct. 323, 34 L. Ed. 2d 262 (1972). We believe such an analogy is equally applicable here. Although the Illinois case law in this area is sparse, it does show that Illinois courts will not imply an easement for light or air in a lease.
The district court's decision relies primarily on Keating v. Springer, 146 Ill. 481, 34 N.E. 805 (1893), and Baird v. Hanna, 328 Ill. 436, 159 N.E. 793 (1927), and we agree that these cases provide the most relevant Illinois precedent. In Keating, the plaintiff-tenant needed strong light for his marble manufacturing and polishing business. The lease contained an express covenant for the unobstructed passage of light, and therefore the Illinois Supreme Court allowed evidence regarding the building by the landlord of a structure which would block light from the tenant's windows. However, the court based its holding on the express covenant, and went on to clarify its decision, stating that an implied easement for air and light is
inapplicable in a county like this, where the use, value, and ownership of land are constantly changing. Air and light are the common property of all.... The prevalent rule in the United States is that an easement in the unobstructed passage of light over an adjoining close cannot be acquired by prescription ... [and will not be implied] from the necessity of such easement to the convenient enjoyment of the property.... It follows that a landlord will not be liable for obstructing his tenant's windows by building on the adjoining close, in the absence of any covenant or agreement in the lease forbidding him to do so.
34 N.E. at 807. 4
In Baird, the owner of two lots sold them to two different people. One lot contained a building and photography business. The other lot's owner then leased the lot, and the lessee began constructing a building. The Illinois Supreme Court held that the buyer of the lot with the photography business could not get an injunction against the tenant of the other premises based on the need for light for his business, reaffirming that "the law of implied grants and implied reservations shall not be applied to easements for light and air." 159 N.E. at 794. The court reasoned that
[t]he simplest rule, and that best suited to a country like the United States, in which changes are continually taking place in the ownership and in the use of lands, is that no easement of light can be acquired without express grant on an interest in, or covenant relating to, the lands over which the right is claimed.
Infinity's brief relies heavily upon Bloomington Lodge v. Roland, 217 Ill.App. 435 (3d Dist.1920), for the proposition that an easement for light and air, and thus by analogy an easement for radio waves, can be implied here. In that case, the owner of a building and lot leased the premises to a party who in turn sublet the third-floor. The sublessee then sublet to Bloomington Lodge. The original lessee then assigned the entire lease to Roland, who began to build an addition on the vacant lot adjacent to the building, which would block air and light from the third floor lodge. The court found that the lodge leased the third floor "as it was then constructed, including the right to have light, and air through the windows at the rear of that floor." Id. at 440. It held that because the original lessee of the lot was burdened with that easement, that burden carried over to any assignment of the lot as well.
Bloomington Lodge does not require an implied easement in the present case. Bloomington Lodge primarily stands for the proposition that an assignee's rights are limited to those granted in the assigned lease, and that it therefore cannot change the premises in any way that would be detrimental to a tenant or subtenant. Prudential is the owner of the lot and not the assignee, so it is not relegated to the rights granted in an assignment, and not subject to any rights granted to a pre-existing subtenant. More significantly, even if Bloomington Lodge does suggest the validity of implied easements for light and air, that case was an appellate court decision handed down before the Illinois Supreme Court decided Baird, which clearly rejected implied easements for light and air. Finally, whatever the intent of the parties in Bloomington Lodge, we do not believe Prudential and Infinity could reasonably have expected the property surrounding Prudential Plaza to remain undeveloped. The parties' expectations and intentions are important when interpreting rights and obligations under a lease.
Infinity claims that the lease provision limiting its use of the premises exclusively to radio broadcasting implies an absolute prohibition on action by Prudential which would interfere with that use, and therefore that the parties did intend an implied right of passage for Infinity's radio signals. But we agree with the district court that this lease provision
merely acknowledges the use to which the tenant must put the leased premises, and no provision of the lease states that the tenant shall have an easement for the passage of radio waves over Prudential's adjoining property.... The ownership and development of Chicago skyline property is constantly changing. Plough and Infinity could not have reasonably expected at the time of the lease and assignment, respectively, that the extremely valuable land north of the Prudential Building would remain undeveloped forever, or during the twenty-year term of the lease and its extension.
We believe it is sound policy to put the obligation upon the prospective commercial tenant to ensure protection for the specific needs of his enterprise. Here it was Infinity's duty to bargain for any unique provisions effecting the transmission of radio waves, or to instead bargain for a reduced rent or liquidated damages clause. An easement for unobstructed radio waves is a lease term which should be negotiated into the lease; a court should not have to read in such a provision in hindsight.
Moreover, the district court was justifiably concerned with the consequences such an easement would have on land development. Prohibiting Prudential from interfering with Infinity's radio frequencies would greatly restrict Prudential's ability to construct the equivalent of Two Prudential Plaza anywhere in the city. Setting such a precedent would also inhibit free land development by any lessor having a radio or television company lessee. We conclude that Illinois law requires the parties to negotiate the terms of such restrictions on their own, and incorporate them into the lease. We therefore uphold the determinations of the district court that no easement for the unobstructed passage of radio waves can be implied here, and that Prudential did not breach the covenant of quiet enjoyment.
Infinity's next claim is that Prudential will constructively evict it from its lease space by building Two Prudential Plaza. The district court, based on its examination of the complaint, determined that Infinity could not successfully claim constructive eviction because it had not abandoned the premises. RNR Realty Inc. v. Burlington Coat Factory, 168 Ill.App.3d 210, 119 Ill.Dec. 17, 23, 522 N.E.2d 679, 685 (1st Dist.) ("Constructive eviction cannot exist where the tenant does not surrender the property," at least within a reasonable time), appeal denied, 121 Ill. 2d 586, 122 Ill.Dec. 446, 526 N.E.2d 839 (1988); see also Advertising Checking Bureau, Inc. v. Canal-Randolph Associates, 101 Ill.App.3d 140, 56 Ill.Dec. 634, 639, 427 N.E.2d 1039, 1044 (1st Dist.1981) (tenant must abandon or surrender the premises before claiming constructive eviction). Infinity claims its amended complaint sufficiently alleged abandonment, as it stated that it was moving its facilities to Sears Tower. It also claims that Prudential's actions were "of a grave and permanent character done with the intention of depriving [Infinity] of the full enjoyment of the premises," RNR Realty, 119 Ill.Dec. at 23, 522 N.E.2d at 685. Thus, Infinity argues that it has sufficiently alleged both requirements of constructive eviction. Id.
At the first hearing before the district court, Infinity had not vacated the premises, and Judge Nordberg concluded that Infinity was only seeking an advisory opinion in the event it did vacate. At that point he correctly declined to render an advisory opinion and found that "there is not a substantial controversy over whether Infinity has or will be constructively evicted of sufficient immediacy and reality to warrant such a declaration at this time." In his later oral modification the court recognized that for all premises as it had alleged in the complaint. But the court still found no constructive eviction. Citing City of Chicago v. American National Bank, 86 Ill.App.3d 960, 42 Ill.Dec. 1, 2-3, 408 N.E.2d 379, 380-81 (1st Dist.1980), the judge found that Infinity's claim did not amount to something of a grave and permanent character indicating the landlord's intent to deprive the tenant of beneficial enjoyment. Judge Nordberg had already determined that the claim for breach of quiet enjoyment lacked merit.
We agree. The constructive eviction allegation as structured here is a mere modification of the quiet enjoyment claim. At oral argument counsel confirmed that most of the operation had been moved to Sears Tower, although Infinity continues to use the Prudential office. The move to what is presently the tallest building in the world ensures an unobstructed transmission for the foreseeable future. It was, however, foreseeable when the lease began in 1971, and certainly when Infinity assumed it in 1984, that buildings taller than 41 floors could obstruct radio waves. With no provision in the lease protecting it, Infinity cannot now claim eviction, constructive or otherwise.
We hold that Judge Nordberg's determination that there was no constructive eviction was supported by Illinois law.
Infinity finally claims that Prudential's refusal to make assurances that Two Prudential Plaza would not interfere with Infinity's radio signals constituted anticipatory repudiation of its lease and license. Absent an express provision in the lease, the doctrine of anticipatory repudiation does not apply to leases under Illinois law. See People ex rel. Nelson v. West Town State Bank, 373 Ill. 106, 111-12, 25 N.E.2d 509, 512 (1940); see also Keep Productions Inc. v. Arlington Park Towers Hotel Corporation, 49 Ill.App.3d 258, 264-65, 7 Ill.Dec. 648, 653, 364 N.E.2d 939, 944 (1st Dist.1977). "An anticipatory breach occurs when a party to an executory contract manifests a definite and unequivocal intent prior to the time fixed in the contract that it will not render its performance under the contract when that time arrives." Farwell Construction Company v. Ticktin, 84 Ill.App.3d 791, 39 Ill.Dec. 916, 925, 405 N.E.2d 1051, 1060 (1st Dist.1980).
The district court found that Prudential's construction of the office tower did not constitute a breach of the lease. There was certainly no provision for anticipatory repudiation in the lease, which was attached as part of the complaint. Apparently because Prudential did not immediately respond to Infinity's letters regarding the potential obstruction by Two Prudential Plaza, Infinity asserts a repudiation. But Prudential cannot repudiate a provision not present in the lease in the first place. Prudential had no obligation to refrain from building Two Prudential Plaza or to avoid interfering with Infinity's radio frequencies, and therefore its refusal to assure Infinity it would not so interfere was not a repudiation of any obligation owed to Infinity.
To protect its radio signals, Infinity, or its predecessor, should have negotiated with Prudential to insert language into the lease that would protect its future broadcasting intentions. This may have cost more and it may have made the lease unacceptable to Prudential. Without that restrictive language, Infinity and its predecessor have been able to operate for most of the period of the extended lease. It is now too late to read into that lease implied language that in hindsight would have been preferable. Infinity has failed to state a claim upon which relief could be granted under any of the above theories. The district court dismissal of Infinity's complaints are therefore
CUDAHY, Circuit Judge, dissenting:
The majority's desire to preclude restraints on land development is the main reason it leaves Infinity uncompensated. By putting the burden of bargaining for specific protections on the prospective tenant, the majority apparently hopes to promote efficient development. But even as a matter of economic efficiency the construction of Two Prudential Plaza imposes costs on Infinity that ought to be recognized. The nature of Infinity's use was carefully defined in the lease and the landlord should not be free to impair that use with impunity. If Prudential modified the existing building in a way that interfered with broadcasting, it would breach the covenant of quiet enjoyment. That Prudential inflicted the same injury by erecting a second building on the same tract is a distinction without a difference. 1
The common sense of the matter is that Prudential bargained to provide Infinity with space for a clearly defined use. Prudential then chose to impair that use to Infinity's damage. Prudential had therefore obtained both the benefit of its bargain in limiting Infinity's use of the space and the benefit of preventing Infinity from using the space in the way specified. I see no merit in ignoring the lease covenants in the name of a wholly unburdened "development." If Prudential can build Two Prudential Plaza without compensating Infinity, its decision to do so will not take account of the full costs of its activity because it will not have to internalize the full costs. The analysis might be different if the rule the majority articulates had been clearly delineated at the time of the bargain, putting Infinity on notice of its need to bargain for specific protections. But Infinity could have quite reasonably relied on the generally understood principle that " [i]n a commercial lease, the covenant [of quiet enjoyment] protects the lessee ... from actions of the lessor that interfere unreasonably with the lessee's ... ability to conduct business." American Dairy Queen v. Brown-Port Co., 621 F.2d 255, 258 (7th Cir. 1980). 2
In any event, it was not necessary to block construction of Two Prudential Plaza--or to impede development--in order to grant Infinity appropriate relief. At the very least, Infinity was entitled to some reduction in rent or damages when its lease and license were rendered completely useless by Prudential's activities.
I therefore respectfully dissent.
The following facts are based on those pleaded in Infinity's complaints and the lease agreement attached as an exhibit, and will be accepted as true for the purpose of evaluating the Rule 12(b) (6) motion to dismiss. Hishon v. King & Spalding, 467 U.S. 69 , 73, 104 S. Ct. 2229, 2232, 81 L. Ed. 2d 59 (1984)
Infinity's radio station, 104.3 FM, WJMK, had an audience of 584,500 listeners per week on April 2, 1986. A study commissioned by Infinity revealed that the building would partially block Infinity's signals for up to .37 square mile
Infinity has also, in the meantime, moved most of its operation to Sears Tower
We disagree with Infinity's assertion that Keating is no longer good law in Illinois, and its claim that the above-quoted passage was unsupported dicta. Keating was followed and quoted in Baird, discussed below. Moreover, both Keating and Baird are Illinois Supreme Court cases, whereas most of the cases Infinity relies on were state appellate court opinions, many of which were decided before Baird
Bloomington Lodge v. Roland, 217 Ill.App. 435 (3d Dist.1920) is almost exactly the same case. That there was an assignee in that case does not distinguish it; the assignee stood in the shoes of the assignor, and both were burdened by an implied easement. While it is true that Baird v. Hanna, 328 Ill. 436, 159 N.E. 793 (1927), was decided subsequently by the Illinois Supreme Court, Baird did not address situations involving a direct contractual relationship. See infra n. 2
The majority and the district court look to Illinois cases in which there was no direct contractual relationship between the parties. People ex rel. Hoogasian v. Sears, Roebuck and Co., 52 Ill. 2d 301 , 287 N.E.2d 677 , cert. denied, 409 U.S. 1001, 93 S. Ct. 323, 34 L. Ed. 2d 262 (1972) (no contractual relationship between parties); Baird v. Hanna, 328 Ill. 436, 159 N.E. 793 (1927) (original owner of two lots sells them to two different people, one of whom objects to other buyer's subsequent use of land). Obviously, in the absence of such a relationship, it is necessary to ask whether an obligation arose in some other way--as, for example, through an implied easement. However, here there is a direct contractual relationship, and there is no question that Infinity's lease with Prudential entitled it to a covenant of quiet enjoyment protecting it, at the very least, against interferences by Prudential
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