consent for assignment of lease

Assignment and Assumption of Lease and Landlord Consent

You can use a Lease Assignment to outline the terms for assigning the responsibilities of a lease to someone else. You need to make sure that the landlord has given his or her consent for the Lease Assignment to go into effect. The terms of assignment, consent of the lessor, and acceptance by the assignee are covered in this Lease Assignment, including the length of the assignment, consent of the person taking over the lease, and acceptance by you, the current lease holder. A Lease Assignment transfers the rights and obligations of an existing lease from one tenant to another.

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ASSIGNMENT AND ASSUMPTION OF LEASE AND LANDLORD CONSENT

THIS ASSIGNMENT AND ASSUMPTION OF LEASE AND LANDLORD CONSENT (" Agreement ") is effective as of _________________ (the “ Effective Date ”), between  _____________  a ________________ corporation (" Assignor "), and ________________   a ________________ corporation (" Assignee ") who agree as follows:

A.              Lease .  ________________ a Delaware corporation (“ Landlord ”), and Assignor, as tenant, are parties to that certain Master Lease dated as of ________________  (the “ Master   Lease ”), pursuant to which Assignor leased from Landlord, and Landlord leased to Assignor, certain premises consisting of approximately ________________ rentable square feet located ________________ (the “ Leased Premises ”) in the building with a street address of ________________________________  (the “ Building ”).  A true, correct and complete copy of the Lease is attached hereto as  Exhibit “A”  and is by this reference incorporated herein and made a part hereof.  The Lease is scheduled to expire on ________________. 

B.         Assignor desires to transfer and assign all of its right, title and interest, as subtenant, in, to, and under the Lease to Assignee, and Assignee wishes to assume all of Assignor's duties, liabilities, and obligations thereunder.

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties mutually covenant and agree as follows:

1.               Assignment .  Assignor, for and in consideration of the payment of rent and the performance of all of the Lease covenants by Assignee as successor subtenant under the Lease, does hereby grant, assign, and convey to Assignee all of Assignor’s right, title, and interest in and to the Lease, for the residue of the term of the Lease, at the rent and other charges set forth in the Lease and subject to the conditions contained in the Lease and henceforth to be performed and observed by Assignee.    

2.               Performance of Lease Covenants and Conditions; Assumption . For the benefit of Assignor and Landlord and Landlord, Assignee hereby assumes all rights, duties, and obligations of the subtenant under the Lease and Assignee hereby covenants and agrees to perform all of the duties and obligations of the subtenant pursuant to the Lease from and after the Effective Date as if Assignee were the original subtenant thereunder. Assignee shall make all payments of rent, additional rent, and other sums due under the Lease from the subtenant thereunder, for the period from and after the Effective Date, when due and payable strictly in accordance with the terms, covenants, and conditions of the Lease.

3.               Letter of Credit .  Within three (3) business days following the full execution of this Agreement by the parties hereto, Landlord’s execution of its consent and Landlord’s execution of the Landlord’s Consent, each as set forth below, Assignee shall deliver to Landlord a letter of credit which satisfies the requirements of Section 21 of the Lease.  Within three (3) business days following Landlord’s receipt of such Letter of Credit from Assignee, Landlord shall return the original Letter of Credit to Assignor and thereafter such original Letter of Credit shall be void and of no further force or effect. 

4.               Possession . Assignor hereby tenders, and Assignee hereby accepts, possession of the Premises in its “AS IS,” “WHERE IS,” AND “WITH ALL FAULTS” condition. Assignor makes no representations or warranties with respect to the physical condition of the Premises or the suitability thereof for Assignee’s use.

5.               Assignment and Subleasing . Subject to the provisions of the Lease, Assignee may assign the Lease, or sub-lease all or any portion of the Premises, but Assignee must also obtain Assignor’s prior written consent, which consent shall not be unreasonably withheld or delayed. As a condition of granting such consent to an assignment, Assignor may require that the new assignee assume the obligations of the subtenant under the Lease and take subject to all of the terms and conditions contained both in the Lease and this Agreement and as a condition of consenting to any lease, Assignor may require that each sublessee agree, by an express provision in its lease, to be bound by all of the terms and provisions of the Lease and this Agreement.  If Assignee assigns the Lease or leases the Premises, in whole or in part, Assignee shall nevertheless remain liable to Assignor for the full performance of Assignee’s obligations under the Lease and this Agreement.

6.               Entry . Assignee agrees that Assignor may at any time during the regular business hours enter upon the Premises for purpose of inspecting the same.

7.               Insurance . Assignee agrees to maintain in effect all of the insurance coverages required to be maintained by the subtenant under the Lease and to provide evidence of such insurance to Assignor from time to time. Assignee agrees to name Assignor as an additional insured under the general liability insurance carried by Assignee with respect to the Premises.

8.               Lease Amendments or Modifications . Assignee shall not enter into any lease amendments or modifications of the Lease with Landlord without the prior written consent of Assignor, which consent shall not be unreasonably withheld or delayed.

9.               Broker Commissions; Fees .  Assignee acknowledges and agrees that Assignee shall be solely responsible for the payment of all broker commissions in connection with this Agreement.  Each of Assignee and Assignor represents and warrants to the other that it has taken no act nor permitted any act to be taken pursuant to which it or the other party hereto might incur any claim for brokerage commissions or finder’s fees in connection with the execution of this Agreement other than Jones Lang LaSalle representing Assignee and CBRE representing Assignor.  Each party agrees to indemnify, defend and hold the other harmless against all liabilities and costs arising from a breach of such representation and warranty, including, without limitation, for attorneys’ fees and costs in connection therewith.  In addition, Assignee shall pay any fees charged by Landlord and Landlord in connection with obtaining the consent of each of them.

10.            Indemnification.    Assignee hereby indemnifies and holds Assignor and its officers, directors, shareholders, members, affiliates, representatives, agents, employees, successors and assigns harmless from and against all claims, damages, demands, losses, expenses and costs incurred, arising out of, or in connection with Assignee’s failure, from and after the Effective Date, to observe, perform and discharge any and all of the subtenant’s covenants, obligations and liabilities in connection with the Lease.  Assignor hereby indemnifies and holds Assignee and its officers, directors, shareholders, members, affiliates, representatives, agents, employees, successors and assigns harmless from and against all claims, damages, demands, losses, expenses and costs incurred, arising out of, or in connection with Assignor’s failure to the extent accruing prior to the Effective Date, to observe, perform and discharge any and all of the subtenant’s covenants, obligations and liabilities in connection with the Lease.

11.            Defaults under Lease . Within two (2) days after receiving any notice from Landlord relating to the performance of the obligations of the subtenant under the Lease, Assignee shall send a copy of such notice to Assignor. Within two (2) days after receiving any notice from Landlord relating to the performance of any obligations of the subtenant under the Lease, Assignor shall send a copy of such notice to Assignee. If Assignee is in default under the provisions of the Lease or this Agreement, and if Assignee fails to cure such default within fifteen (15) days after receipt of notice from Landlord or Assignor specifying the nature of such default with respect to non-monetary defaults and two (2) business days with respect to monetary defaults, then Assignor may reenter the Premises, with or without process of law, and cure such default, in which event Assignee shall promptly reimburse Assignor for all costs and expenses with regard thereto, or, at Assignor’s option, Assignor may repossess and enjoy the Premises as of Assignor’s first and former estate and either declare this Agreement to be terminated at no further force or effect or, without terminating the same, Assignor may reassign the Lease to itself or others or sublet the Premises to itself or others, in whole or in part, for the account of Assignee, in which event Assignee shall promptly reimburse Assignor for any rent deficiencies and other charges, costs, reasonable attorneys’ fees, or expenses so incurred by Assignor with respect thereto.

12.            Attorneys’ Fees .  In any action between the parties to enforce any of the terms or provisions of this Agreement, the prevailing party in the action shall be entitled to recover from the non-prevailing party, in addition to damages, injunctive relief or other relief, its reasonable costs and expenses, including, without limitation, costs and reasonable attorneys’ fees, as the court shall determine.  Any such attorneys’ fees and other expenses incurred by either party in enforcing a judgment in its favor under this Agreement shall be recoverable separately from and in addition to any other amount included in such judgment, and such attorneys’ fees obligation is intended to be severable from the other provisions of this Agreement and to survive and not be merged into any such judgment.

13.            Successors and Assigns .  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.

14.            Severability .  If any provision of this Agreement shall be held invalid or unenforceable for any reason and to any extent, the remainder of this Agreement shall not be affected, but shall be enforced to the greatest extent permitted by law.

15.            Governing Law .  This Agreement shall be governed by and construed in accordance with the laws of the State of California.

16.            Counterparts .  This Agreement may be executed in one or more counterparts.  All such counterparts, when taken together, shall comprise the fully executed Agreement.  Signatures of the parties transmitted by facsimile or electronic mail in PDF format shall be deemed to constitute originals and may be relied upon, for all purposes, as binding the transmitting party hereto.  The parties intend to be bound by the signatures transmitted by facsimile or electronic mail in PDF format, are aware that the other party will rely on such signature, and hereby waive any defenses to the enforcement of the terms of this Agreement based on the form of the signature.

17.            Notices .  For purposes of this Agreement, the notice addresses for Assignee and Assignor shall be as follows:

_____________________

Attn: ________________

18.            Warranty and Authority .  Each party represents that this Agreement has been executed by its duly authorized representative.

19.            Condition Precedent .  This Agreement is not and shall not be effective unless and until each of Landlord and Landlord provides its consent to this Agreement.  If either Landlord or Landlord fails to consent to this Agreement with thirty (30) days after delivery of this Agreement to Landlord and Landlord then either Assignor or Assignee may terminate this Agreement by written notice thereof to the other party at any time prior to receipt of Landlord’s and Landlord’s consent and in such event neither Assignor nor Assignee shall have any obligations to the other party under this Agreement.  Assignee shall reasonably cooperate with Assignor to obtain Landlord’s and Landlord’s consent, including providing Landlord and Landlord with financial information and other information requested by Landlord and Landlord

IN WITNESS WHEREOF, this Agreement has been executed as of the Effective Date set forth above.

LANDLORD’S CONSENT

By its execution below, Landlord consents to this assignment of the Lease to Assignee and acknowledges the continuance of the Lease by and between Assignee and Landlord.  Landlord is not a party to the assignment and executes this document for the limited purpose of granting its consent.  The consent to this assignment shall not act as or be deemed as a waiver of Landlord’s right to consent to any subsequent assignment or lease in accordance with the terms of the Lease.  Notwithstanding the foregoing, so long as Assignee delivers to Landlord a letter of credit which satisfies the requirements of Section 21 of the Lease then within three (3) business days following Landlord’s receipt of such Letter of Credit from Assignee, Landlord shall return the original Letter of Credit to Assignor and thereafter such original Letter of Credit shall be void and of no further force or effect.

Landlord, Inc.

By:                                                      

Its:                                                       

LANDLORD CONSENT TO ASSIGNMENT OF LEASE

By its execution below,  Landlord consents to this assignment of the Lease to Assignee and acknowledges the continuance of the Lease by and between Assignee and Landlord.  Landlord is not a party to the assignment and executes this document for the limited purpose of granting its consent.  Landlord’s consent shall not relieve or discharge Landlord from any of its obligations under the Master Lease, whether or not such Default should occur by fault of the Assignee.  The consent to this assignment shall not act as or be deemed as a waiver of Landlord’s right to consent to any subsequent assignment or lease in accordance with the terms of the Master Lease.

Landlord’s consent is conditioned upon payment by Landlord of all Rent and any other charges due under the Master Lease at the time of the assignment (notwithstanding that such charges may be billed following the date of the assignment).

a ________________ corporation

By:                                               

Its:                                               

(see attached)

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Lease Assignment Agreement

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A Lease Assignment Agreement is a short document that allows for the transfer of interest in a residential or commercial lease from one tenant to another. In other words, a Lease Assignment Agreement is used when the original tenant wants to get out of a lease and has someone lined up to take their place.

Within a Lease Assignment Agreement, there is not that much information included, except the basics: names and identifying information of the parties, assignment start date, name of landlord, etc. The reason these documents are not more robust is because the original lease is incorporated by reference , all the time. What this means is that all of the terms in the original lease are deemed to be included in the Lease Assignment Agreement.

A Lease Assignment Agreement is different than a Sublease Agreement because the entirety of the lease interest is being transferred in an assignment. With a sublease, the original tenant is still liable for everything, and the sublease may be made for less than the entire property interest. A Lease Assignment transfers the whole interest and puts the new tenant in place of the old one.

The one major thing to be aware of with a Lease Assignment Agreement is that in most situations, the lease will require a landlord's explicit consent for an assignment. The parties should, therefore, be sure the landlord agrees to an assignment before filling out this document.

How to use this document

This Lease Assignment Agreement will help set forth all the required facts and obligations for a valid lease assignment . This essentially means one party (called the Assignor ) will be transferring their rights and obligations as a tenant (including paying rent and living in the space) to another party (called the Assignee ).

In this document, basic information is listed , such as old and new tenant names, the landlord's name, the address of the property, the dates of the lease, and the date of the assignment.

Information about whether or not the Assignor will still be liable in case the Assignee doesn't fulfill the required obligations is also included.

Applicable law

Lease Agreements in the United States are generally subject to the laws of the individual state and therefore, so are Lease Assignment Agreements.

The Environmental Protection Agency governs the disclosure of lead-based paint warnings in all rentals in the States. If a lead-based paint disclosure has not been included in the lease, it must be included in the assignment. Distinct from that, however, required disclosures and lease terms will be based on the laws of the state, and sometimes county, where the property is located.

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A guide to help you: Tenants and Subtenants Obligations under a Sublease Agreement

Other names for the document:

Assignment Agreement for Commercial Lease, Assignment of Commercial Lease, Assignment of Lease, Assignment of Residential Lease, Assignment Agreement for Lease

Country: United States

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MAKE YOUR FREE Lease Assignment

What is a Lease Assignment?

A Lease Assignment is a legally binding agreement that allows a tenant to transfer their lease obligations to another tenant. Lease Assignments can be useful when the original tenant needs to move and wants someone else to take over the lease. A Lease Assignments can be used to transfer either a residential or commercial lease agreement, and they typically cover the terms of assignment, the consent of the landlord, and the acceptance by the assignee. It's important to note that the original tenant must obtain the landlord's consent before transferring the lease. If the landlord's consent is required in the original lease and not obtained prior to making the assignment, the Lease Assignment will be void, and the original tenant will remain liable under the original lease agreement. If you need to transfer your lease to someone else, use a Lease Assignment to legally transfer your lease obligations. This can help ensure a smooth transition of responsibility and protect you from liability. You can use this Lease Assignment, which includes a landlord consent form for your convenience, to help simplify the process.

When to use a Lease Assignment:

• You want to transfer your lease to someone else.
• You'd like to take over someone's lease agreement.
• You're a landlord and want to facilitate the transfer of your tenant’s lease to someone else.

Sample Lease Assignment

The terms in your document will update based on the information you provide.

Lease Assignment

This Assignment is made on by , , , (Assignor), to , , , (Assignee).

For value received, Assignor assigns and transfers to Assignee that Lease, dated , executed by Assignor as Lessee and by , , , regarding the property located at , , , hereinafter referred to as the Lease together with all his right, title, and interest in and to the lease and premises, subject to all the conditions and terms contained in the Lease, to have and to hold from , until the present term of the Lease expires on .

A copy of the Lease is attached hereto and made a part hereof by reference.

Assignor covenants that Assignor is the lawful and sole owner of the interest assigned hereunder; that this interest is free from all encumbrances; and that Assignor has performed all duties and obligations and made all payments required under the terms and conditions of the Lease.

Assignee agrees to pay all rent due after the effective date of this assignment, and to assume and perform all duties and obligations required by the terms of the Lease.

CONSENT OF LESSOR

I, , Lessor named in the above assignment of lease, on , consents to that assignment of the Lease executed by me on . I also consent to the agreement by Assignee to assume after , the payment of rent and performance of all duties and obligations as set forth in the Lease, and release , Lessee and Assignor, from all duties and obligations under the Lease, including the payment of rent, after , and accept Assignee as Lessee in the place of , Lessee and Assignor.

Executed on the date first written above with intent to be legally bound.

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Lease Assignment checklist

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Review your Assignment Agreement

Look over the Lease Assignment to ensure it matches your intentions.  You may also want to review the agreement with any other parties to avoid delays at signing. Remember that if you have any questions you can easily Ask a Lawyer .

Make sure all attachments have been included

A copy of the original Lease should be attached. You should scan and upload a copy of any attachments to your Rocket Lawyer account to ensure you have a complete record of all documents involved in this transaction.

Sign this document

• The original tenant (the “assignor”)
• The new tenant taking responsibility for the lease (the “assignee”)
• The landlord or property manager (“lessor”)

Each Party should receive an original signed copy of the Assignment. Your copy should be kept in a safe place. If you sign this Lease online a copy will be securely stored in your account. You can share your document from your account.

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Landlord Consent to Assignment of Lease | Practical Law

Landlord Consent to Assignment of Lease

Practical law standard document 6-518-9258  (approx. 15 pages).

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

Do you have any questions about a lease assignment and want to speak to an expert? Post a project today on ContractsCounsel and receive bids from real estate lawyers who specialize in lease assignment.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

Meet some of our Assignment of Lease Lawyers

I have had the opportunity to experience the legal industry in a private setting and public sector, representing individuals, companies of all sizes, as well as the Government. As a strong leader, I take pride in continuously tackling new challenges and learning as much as possible, always finding answers and delivering results to my clients. I received my JD from Ave Maria School of Law in Naples, Florida and went on to pass the Uniform Bar Exam. I am currently licensed in Minnesota and North Carolina. I have experience in real estate law, estate planning, contract law, family law, criminal law, and more.

General practice attorney with experience in civil litigation, family law, criminal law, estate planning, business formation, real estate and business transactions.

I am an attorney licensed in Indiana. I currently work primarily on civil litigation, landlord/tenant matters, and adoption cases. I have over 10 years of labor relations experience, including negotiations, labor contract enforcement, and arbitration experience. I also work with several non-profit groups representing LGBTQ+ groups and indigent clients in housing matters.

July 29, 2023 My name is Diamond Simpson Roberts, ESQ, MSPH and I am convinced that I can be a value added asset to most any company. As the first in my family to graduate a four-year university, I graduated from Wayne State University Law School in 2000 but could not afford a bar prep course upon completion. After over 20 years, I sat for the July 2022 UBE, successfully passed and am currently licensed in three states! This is an example of my self-motivation, internal drive and passion. I offer over 28 years of diverse experience in healthcare, strategy, sales/marketing, legal/policy and business savvy. I have many years building, leveraging, and sustaining long term relations to drive revenue as an entrepreneur and for corporations. My analytical strengths provide me with an innate ability to think through tough situations/topics while viewing both vantage points (which is excellent for law and life). I have been appointed to serve on numerous committees due to my heightened ability to identify client issues and priorities and provide solutions based upon relevant products, services and needs. I have led teams with and without authority; specifically, I have managed teams for an Adult Foster Care Facility called Etonne Cares, during my post-graduate fellowship with the largest Catholic Healthcare System in the U.S. and during my two-year executive order appointment with the Federal Government (Presidential Management Fellowship). Most importantly, I am a collaborative team player who knows how to improvise, overcome and adapt! I offer numerous years of being a pharmaceutical trainer and being an adjunct using the online platform. I welcome the opportunity to continue in the interview so that I may further highlight the skills I can (and will) contribute to my success in the role. Respectfully, Diamond Simpson Roberts, ESQ, MSPH [email protected] M: 313-942-6747

I worked at immigration law firms before and recently started my own law firm. My experience includes investor visas, family immigration (spouse, parents, children), change of status, and citizenship applications.

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To begin his legal career, Ben was a legal fellow with Georgia Lawyers for the Arts. Ben also assisted Michigan State University in protecting its registered intellectual property as lead intellectual property (IP) intern for Michigan State University's Center for Anti-Counterfeiting and Product Protection (A-CAPP Center). During this time, Ben organized and moderated a panel discussion with U.S. Customs and Border Patrol agents for A-CAPP's annual Brand Protection Strategy Summit. Ben was selected to join a team of law student interns in Lovran, Primorje-Gorski Kotar, Croatia, to handle matters involving cybercrime, international copyright, the Uniform Domain-Name Dispute-Resolution Policy and the General Data Protection Regulation. Before studying law, Ben worked for Core Security and Meridian Link as a software QA engineer. As a member of Million Dollar Minds Entertainment (Est. 2006) Ben produced countless commercial music recordings, engineered hundreds of songs, and served as executive producer seven studio albums. Ben enjoys spending time with his wife and two daughters. He is an alumnus of The South Carolina State University and Michigan State University College of Law.

Attorney Skelly is a midwestern transplant from Iowa. She has been in Florida for the past 11 years. She went to undergrad at Buena Vista University, which is a small liberal arts college in Storm Lake, Iowa. After graduating with her Bachelor's degree in criminal justice, she went on to obtain her Master's degree in criminal justice from Kaplan university, which is now Purdue Global. While attending school full time for her Master’s degree, Attorney Skelly worked full time in social services helping children and their families who were involved in the dependency system. Attorney Skelly has a professional background in child welfare and social services having worked for 18 years in the field. Attorney Skelly always had a lifelong dream of becoming a lawyer and decided to fulfill her goal in May of 2019 by starting law school at Western Michigan University Thomas M. Cooley Law School at their Riverview campus. She did their accelerated program and completed law school in just over two years and graduated magna cum laude with honors. Attorney Skelly also received certificate of merit awards, which means attaining the highest grade in the class in secured transactions, research and writing, and family violence practice. While in law school Attorney Skelly was a teaching assistant to two tenured professors as well as a note taker for those students who had accommodations. She was also awarded the Alumni Association’s Distinguished Student Award. In her legal career, Attorney Skelly started out at the State Attorney’s Office in Fort Myers, FL. She helped prosecute several cases and personally worked as second chair on 9 jury trials and one bench trial. Once Attorney Skelly passed the bar, she worked for a family law firm under a board certified marital and family law practitioner where she gained tremendous knowledge in the area of family law which includes divorce, paternity, child custody/parenting plans, alimony and child support as well as domestic relations issues such as domestic violence injunctions. Attorney Skelly is also certified as a Guardian ad Litem and can serve as a Guardian ad Litem in family court cases. Attorney Skelly is a proud member of the Florida Bar, the Lee County Bar Association, and the American Bar Association.

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Contract to lease land from a church.

I’m planning on leasing land from a church. Putting a gym on the property. And leasing it back to the school.

Ok; first step is that you will need a leasing contract with the church. Ask them to prepare one for you so you would just need an attorney to review the agreement and that should cost less than if you had to be the party to pay a lawyer to draft it from scratch. You need to ensure that the purpose of the lease is clearly stated - that you plan to put a gym on the land so that there are no issues if the church leadership changes. Step 2 - you will need a lease agreement with the school that your leasing it do (hopefully one that is similar to the original one your received from the church). Again, please ensure that all the terms that you discuss and agree to are in the document; including length of time, price and how to resolve disputes if you have one. I hope this is helpful. If you would like me to assist you further, you can contact me on Contracts Counsel and we can discuss a fee for my services. Regards, Donya Ramsay (Gordon)

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Free Lease Assignment Agreement

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Your Lease Assignment Agreement

ASSIGNMENT OF LEASE WITH CONSENT OF LANDLORD

THIS ASSIGNMENT OF LEASE dated this ________ day of ________________, ________

_________________________

(the "Assignor")

OF THE FIRST PART

_______________________

(the "Assignee")

OF THE SECOND PART

• This is an agreement (the "Assignment") to assign a residential lease in real property according to the terms specified below.
• The Assignor wishes to assign and transfer to the Assignee that lease (the "Lease") dated May 12, 2024, and executed by the Assignor as tenant and by _________________________ as landlord (the "Landlord").

IN CONSIDERATION OF the Assignor agreeing to assign and the Assignee agreeing to assume the Lease for the Premises, and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, both parties agree to keep, perform and fulfill the promises, conditions and agreements below:

• The Lease governs the rental of the following described premises (the "Premises") to the Assignor: ______________________________________________
• Assigned Lease
• The Assignor assigns and transfers to the Assignee all of the Assignor's right, title, and interest in and to the Lease and the Premises, subject to all the conditions and terms contained in the Lease.
• Effective Date
• This Assignment takes effect on May 14, 2024 (the "Effective Date"), and continues until the present term of the Lease expires on May 14, 2024.
• Assignor's Interest
• the Assignor is the lawful and sole owner of the interest assigned under this Assignment;
• this interest is free from all encumbrances; and
• the Assignor has performed all duties and obligations and made all payments required under the terms and conditions of the Lease.
• Breach of Lease by Assignee
• In the event of a breach by the Assignee, the Landlord will provide the Assignor with written notice of this breach and the Assignor will have full rights to commence all actions to recover possession of the Premises (in the name of the Landlord, if necessary) and retain all rights for the duration of the Lease provided the Assignor will pay all accrued rents and cure any other default.
• Governing Law
• It is the intention of the parties that this Assignment, and all suits and special proceedings under this Assignment, be construed in accordance with and governed, to the exclusion of the law of any other forum, by the laws of the State of California, without regard to the jurisdiction in which any action or special proceeding may be instituted.
• Miscellaneous Provisions
• This Assignment incorporates and is subject to the Lease, a copy of which is attached hereto, and which is hereby referred to and incorporated as if it were set out here at length. The Assignee agrees to assume all of the obligations and responsibilities of the Assignor under the Lease.
• This Assignment will be binding upon and inure to the benefit of the parties, their successors, assigns, personal representatives, beneficiaries, executors, administrators, and heirs, as the case may be.
• All rents and other charges accrued under the Lease prior to the Effective Date will be fully paid by the Assignor, and by the Assignee after the Effective Date. The Assignee will also be responsible for assuming and performing all other duties and obligations required under the terms and conditions of the Lease after the Effective Date.
• There will be no further assignment of the Lease without the prior written consent of the Landlord.

IN WITNESS WHEREOF the Assignor and Assignee have duly affixed their signatures under hand and seal on this ________ day of ________________, ________.

CONSENT OF LANDLORD

The Landlord in the above Assignment of Lease executed on the ________ day of ________________, ________, consents to that Assignment. The Landlord also agrees to the Assignee assuming after May 14, 2024, the payment of rent and performance of all duties and obligations as provided in the Lease.

Last Updated October 16, 2023

Lease Assignment Information

Alternate names:.

A Lease Assignment is also called a/an:

• Assignment Agreement
• Lease Assignment Form
• Lease Transfer

A Lease Assignment can also be called a Commercial Lease Assignment or a Residential Lease Assignment depending on the type of property it is being used for. LawDepot's Lease Assignment can be used for residential or commercial properties.

What is a Lease Assignment?

A Lease Assignment transfers the rights and obligations of an existing lease from one tenant to another.

Who are the parties in a Lease Assignment?

Generally, there are two parties involved in a Lease Assignment:

• The Assignor: this is the tenant(s) listed on the property's current lease (the master lease) who, using the Lease Assignment Form, is transferring their rights and obligations from themselves to another tenant
• The Assignee: this is the tenant who is taking over the original tenant's (the assignor's) rights and obligations

Typically, a landlord does not sign the Lease Assignment itself, but their information may be included in the document and they may need to sign a consent allowing the assignor to assign the lease.

Why do I need a Lease Assignment?

A Lease Assignment is typically used when a tenant wishes to vacate a property before their lease expires . There are many reasons why tenants would need to use a Lease Assignment, for example:

• If a tenant was renting residential property, they may wish to transfer their lease because they need to relocate for work or personal reasons, reduce living costs, increase their living space, or purchase a home.
• If a tenant was renting commercial property, they may want to assign their lease because of company relocation, expansion, downsizing, or seasonal closure.

What is included in a Lease Assignment?

Typically, a Lease Assignment will contain information regarding:

• The type of lease (residential or commercial)
• The property's location
• Details about the assignor, assignee, and landlord
• The original lease term (start and end dates)
• The start date of the lease transfer
• Details about the assignor's continuing liability (i.e. whether the assignor will continue to be liable to the landlord after the lease is assigned to the assignee)
• Lead paint disclosure for residential rentals, if required

A Lease Assignment should also include a copy of the master lease (the original lease for the property, signed by the landlord and assignor) or a copy should be provided to the assignee for the assignee's records.

Is a landlord's consent required for a Lease Assignment?

You should have the consent of your landlord when you assign a lease.

The master lease may state whether a tenant is permitted to assign their lease and if consent is needed. However, if it does not, it is a good idea to speak with your landlord and create a Landlord's Consent to Lease Assignment before transfering the lease to a new tenant.

Who is liable in an assigned lease?

Your Rental Agreement may contain a clause about assignment and continuing liability. If it does not, the landlord usually decides whether the assignor will be responsible for damages or other breaches of the lease caused by the assignee (or the assignee's guests, clients, or customers).

The Lease Assignment should note whether the assignor is liable for the assignee's conduct (for instance, paying for property damages, missed rent payments, fines from not complying to noise ordinances, etc.). If the assignor has been released from liability, the landlord can only seek compensation for property damage or other lease breaches from the assignee.

In contrast, if the assignor remains liable under the original lease, then the landlord can seek recourse from both the assignee and assignor.

If the assignee is liable but the landlord tries to collect payment from the assignor, the Assignment Agreement will help protect the assignor by stipulating that the assignor can seek recourse from the assignee.

What is the difference between assigning and subletting a lease?

Both assignment and subletting involve finding a new tenant, but there are some key differences.

An assignment is when the tenant transfers their lease interest to a new tenant using a Lease Assignment. The assignee takes the assignor's place in the landlord-tenant relationship, although the assignor may remain liable for damages, missed rent payments, and other lease violations.

A sublease is when the tenant temporarily hands over the rights and obligations of a lease to a third party by using a Sublease Agreement. Although the landlord typically isn't a party to the agreement, they can still hold the tenant responsible for the terms of the original lease.

Before deciding to assign or sublet your rental property, it's important to review your Lease Agreement (the master lease) for any rules and discuss your options with your landlord.

Related Documents:

• Landlord's Consent to Lease Assignment : this consent is used when tenants need to obtain written approval from their landlord before they assign their lease to a new tenant
• Commercial Sublease Agreement : this agreement is used by commercial property tenants and allows them to rent out all or a portion of their rented property to another tenant
• Residential Sublease Agreement : this agreement allows a residential tenant to rent all or a portion of a leased property to another tenant
• Landlord's Consent to Sublease : this consent is used when tenants need to obtain written approval from their landlord before creating a Sublease Agreement

Frequently Asked Questions:

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©2002-2024 LawDepot® (Sequiter Inc.). All Rights Reserved. LawDepot® is not a law firm and cannot provide legal advice.

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Landlord's Consent to Lease Assignment

• Is used to authorize the assignment of a lease to a new tenant.
• Acknowledges the new tenant's obligations to the Landlord for the remainder of the lease term.
• States whether the original tenant is still liable if the new tenant does not meet its obligations under the lease.

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Assignment and Consent Standards in Commercial Leases

Mar 6, 2020

Assignment provisions in commercial leases are heavily negotiated and very important to both landlords and tenants. This article presents a brief overview of the assignment provision in commercial leases, both office and retail.

Assignment provisions in commercial leases are heavily negotiated and very important to both landlords and tenants. When a tenant’s interest in a lease is assigned, the tenant is transferring its entire leasehold interest and 100% of the leased premises to a third party for the entire remaining term of the lease. For the tenant, the assignment provision represents a potential exit strategy, dependent of course on the local market, and increased flexibility for future needs. For the landlord, the assignment offers greater security for its revenue stream and hopefully the avoidance of a tenant bankruptcy or default while keeping its building occupied. The tenant’s desire for flexibility and the landlord’s need for control is where the negotiations are focused. This article presents a brief overview of the assignment provision in commercial leases, both office and retail, with particular attention on the laws of Maryland, Virginia and the District of Columbia. The landlord’s standard for providing consent to a request to an assignment will be reviewed, and we will conclude by offering suggested language.

What If The Lease Does Not Contain An Assignment Provision?

The law traditionally favors the free alienation of property. Therefore, under the laws of almost every state, if the lease is silent on whether the landlord’s consent to an assignment is required, then the commercial tenant has the right to assign its interest. This is true in Maryland, Virginia and the District of Columbia. Given this baseline, almost every lease form will have a detailed provision setting forth the assignment process. Note also, however, that in most states it is also enforceable for a commercial lease to have an outright prohibition against assignments. Such a provision would likely be a non-starting deal point for most sophisticated tenants.

What Does Reasonable Mean?

If a lease simply provides that the tenant requires landlord’s consent to an assignment, but does not include the standard for giving or withholding that consent, then in many states the implied standard is that the landlord’s consent may not be unreasonably withheld. Historically this was the minority view, with the historical rule allowing the landlord to withhold consent for any reason. The implied duty of reasonableness is now more the norm as more states adopt this position when presented with the issue. There is express case law establishing this rule in Maryland, and most courts in Virginia and Washington, DC will imply such a covenant of good faith and fair dealing. Most states, though, do allow a landlord the sole right to grant or withhold its consent if the lease clearly expressly provides, and in Maryland the lease must specifically state that the landlord’s consent may be granted or withheld in the sole and absolute subjective discretion of the landlord. Again though, a sophisticated tenant with any leverage should never agree to such a provision.

Most negotiated leases will instead contain a provision requiring that landlord’s consent to an assignment is required, but such consent will not be unreasonably withheld. The tenant will likely also try to include landlord’s obligation to not unreasonably delay or condition its consent. A short clause without further defining what constitutes “reasonableness” generally favors the tenant, and landlords typically prefer including specific standards as to the criteria it can consider when reasonably deciding whether or not to consent to an assignment. Without such specificity, defining “reasonable” is difficult as the landlord and tenant clearly will have differing viewpoints and it may be left as a factual question to be decided in litigation. The typical definition (set forth in the Restatement (Second) of Property) would be that of a reasonably prudent person in the landlord’s position exercising reasonable commercial responsibility.

Absent a detailed provision listing the criteria a landlord can consider when reasonably reviewing a request to assign, a landlord is typically found to be considered reasonable if it considers certain general broad factors. First, the landlord reviews the assignee’s proposed use. In a retail setting, the landlord will be concerned whether the proposed use fits with the existing center and/or violates any existing exclusives or insurance requirements. In an office setting, the landlord might review the expected traffic and wear and tear on the building. Second, the landlord will consider the creditworthiness of the assignee. The landlord (and the assignor) will want to be confident that the assignee is capable of performing tenant’s obligations under the lease and a large creditworthy tenant increases the value of the asset. The assignor might argue that a strict financial test (such as a minimum net worth, for example) is unfair since the assignor is likely not being released upon the assignment and the landlord can still pursue the assignor in the event of a default. Third, the landlord will review the experience and history of the assignor. As mentioned above, landlords instead prefer a detailed list setting forth the many factors that they can include as part of reasonably reviewing a request for a lease assignment.

Without further establishing the criteria, the landlord puts itself at risk of a challenge by the tenant that a denial of a consent is unreasonable.

In defining “reasonable,” courts typically do not allow a landlord to deny or condition consent to an assignment based purely on economic reasons where the landlord results in substantially increasing what it was entitled to under the lease. In Washington, DC, there is well established case law holding that it is unreasonable for a landlord to withhold consent solely to extract an economic concession or improve its economic position. For example, a court would not consider it reasonable for a landlord to condition its consent on the assignee paying a greatly increased rent. Instead, as discussed below, landlords should look to protect their interests in a market of increasing rents by providing for either the sharing of excess rentals or a right to recapture.

What Are Typical Provisions In an Assignment Clause?

As discussed above, tenants generally prefer a short assignment provision simply requiring the landlord to not unreasonably withhold, condition or delay its consent to an assignment. But most leases are drafted by landlords, and over the years the assignment provisions have evolved to contain many typical provisions in addition to further defining “reasonableness,” including the following below.

• Sharing of Excess Rents. Since many states do not permit a landlord to condition its consent on improving its economic position (e. g. , by increasing the rent), most leases instead contain a provision where the landlord is entitled to all or a portion of the profits. The profits may mean increased rent, or it may even be construed more broadly to consider the value of the location in a sale of the tenant’s business. The landlord’s argument is that it doesn’t want the tenants competing in the real estate market. The tenant should push back here, and certainly try to lower the percentage shared, carve out any consideration received in the sale of tenant’s business, and only share profits after all of the tenant’s reasonable costs incurred in connection with the assignment were first deducted.
• Corporate Transfers. Since a purchase of the entity constituting tenant is likely not deemed an assignment under the law, most leases make clear that any such corporate sale, including the sale of either a controlling interest in the stock or substantially all of the assets of the tenant, is deemed an assignment for purposes of the lease. The tenant should carve out permitted transfers for typical mergers and acquisitions under certain conditions, and also carve out routine transfers of stock (or other ownership interests) between existing partners or for estate planning purposes. The landlord will likely accept a permitted transfer concept provided they receive adequate notice and the successor entity succeeds to all of the assets of the original tenant with an acceptable net worth.
• Assignment Review Fee. Most landlords include in their form lease the requirement that the tenant reimburse them for legal and administrative expenses incurred in reviewing the request for consent and preparing the assignment. The tenant clearly wants to keep these fees reasonable and in keeping with the local market.
• Recapture Rights. Landlords like to include the express right to recapture the premises in the event the tenant comes to it to request a consent for an assignment. A recapture clause allows the landlord to terminate the lease if market rents have increased or if it needs the space for another use. Sophisticated tenants should push back here as much as leverage allows, try to limit the time periods, and if nothing else try for the right to nullify the recapture by rescinding its request for the consent.
• Tenant’s Remedy. To protect themselves from claims for damages from the tenant if the landlord withholds its consent to a requested assignment, landlords often include a provision where the tenant waives its rights to monetary damages in such a situation and can only seek injunctive relief. The tenant should try to delete this provision, or at least, if leverage permits, provide for the right to seek damages if the landlord is subsequently found to have acted in bad faith.

Assignment provisions are heavily negotiated and both the commercial landlord and tenant need to be advised to the applicable local law and know the market for a comparable transaction. ( Note: The author represents office and retail landlords and tenants throughout Virginia, Maryland and the District of Columbia.) Sample reasonableness provisions for both office and retail uses are copied below for reference.

Retail Lease

Landlord and Tenant agree, by way of example and without limitation, that it shall be reasonable for Landlord to withhold its consent if any of the following situations exist or may exist: (i) In Landlord’s reasonable business judgment, the proposed assignee lacks sufficient business experience to operate a business of the type permitted under this Lease and to a quality required under this Lease; (ii) The present net worth of the proposed assignee is lower than that of Tenant’s as of either the date of the proposed assignment or the date of this Lease; (iii) The proposed assignment would require alterations to the Premises affecting the Building’s systems or structure; (iv) The proposed assignment would require modification to the terms of this Lease, or would breach any covenant of Landlord in any other lease, insurance policy, financing agreement or other agreement relating to the Shopping Center, including, without limitation, covenants respecting radius, location, use and/or exclusivity; (v) The proposed assignment would conflict with the primary use of any existing tenant in the Shopping Center or any recorded instrument to which the Shopping Center is bound; and/or (vi) The proposed assignment or subletting would result in a reduction in the Rent collected by Landlord during any portion of the term of this Lease.

Office Lease

Without limitation as to other reasonable grounds for withholding consent, the parties hereby agree that it shall be reasonable under this Lease and under any applicable law for Landlord to withhold consent to any proposed Transfer where one or more of the following apply: (i) The Transferee is of a character or reputation or engaged in a business which is not consistent with the quality of the Building; (ii) The Transferee intends to use the Premises for purposes which are not permitted under this Lease; (iii) The Transferee is a governmental agency; (iv) The Transfer occurs prior to the first anniversary of the Lease Commencement Date; (v) The Transferee has a net worth of less than $10,000,000.00; (vi) The proposed Transfer would cause a violation or trigger a termination right of another lease for space in the Building; or (vii) Either the proposed Transferee, or any person or entity which directly or indirectly, controls, is controlled by, or is under common control with, the proposed Transferee, (i) occupies space in the Building at the time of the request for consent, or (ii) is negotiating with Landlord to lease space in the Building at such time, or (iii) has negotiated with Landlord during the six (6)-month period immediately preceding the Transfer Notice.

Reprinted with permission from the March edition of the Commercial Leasing Law & Strategy© 2020 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or [email protected] .

• John G. Kelly

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Free Landlord's Consent to Lease Assignment

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Landlord's Consent to Lease Assignment

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When the Tenant rents the property to someone else, it's known as subletting. Use a  Consent to Sublease to obtain the Landlord's consent to sublet the property.

Your Landlord's Consent to Lease Assignment

LANDLORD'S CONSENT TO LEASE ASSIGNMENT

THIS CONSENT TO LEASE ASSIGNMENT (the "Consent") dated this ________ day of ________________, ________ BETWEEN:

_________________________ (the "Landlord") AND _________________________ (the "Assignor") AND _________________________ (the "Assignee")

• The Assignor entered into a lease (the "Lease") with the Landlord on May 14, 2024 with respect to the following premises (the "Premises"): __________.
• The Assignor has assigned or will be assigning (the "Assignment") all of its rights and obligations under the Lease to the Assignee starting from May 14, 2024 until the end of the term of the Lease.

IN CONSIDERATION OF the Landlord consenting to the Assignment, the Assignor transferring all of the Assignor's rights and obligations under the Lease, and the Assignee agreeing to assume the Lease and all of the obligations of the Assignor under the Lease, the parties agree to keep, perform and fulfill the promises, conditions and agreements below:

• CONSENT TO ASSIGNMENT
• The Landlord consents to the Assignment and the transactions contemplated by that Assignment.
• The Landlord's consent to the Assignment will not be deemed to be a consent to (i) the terms of the Assignment, (ii) any further assignment of the Premises, (iii) any assignment of any other portion of the Premises, or (iv) the assignment of any portion of the Premises to any other assignor or on any other or different terms than those stated in the Assignment. The Assignor will provide the Landlord with a fully executed copy of the Assignment promptly after execution.
• LIABILITY OF ASSIGNOR
• The Assignor acknowledges that the Landlord's consent to the Assignment will discharge the Assignor of its obligations under the Lease in the event of a breach by the Assignee.
• ASSUMPTION BY ASSIGNEE
• The Assignee acknowledges that it has agreed or will agree to assume all of the applicable obligations and responsibilities of the Tenant under the Lease starting from May 14, 2024 until the end of the Term of the Lease.
• BINDING EFFECT
• This Consent will be binding on and will inure to the benefit of the Landlord, the Assignor, the Assignee and their respective heirs, executors, administrators and successors in interest and assigns.
• ASSIGNMENT AND SUBLETTING
• The Assignee will not sublet, transfer, or further assign the Premises or any part of the Premises without the prior written consent of the Landlord.
• GENERAL PROVISIONS
• In the event of any legal action concerning this Consent, the losing party will pay to the prevailing party reasonable attorney's fees and court costs to be fixed by the court and such judgment will be entered.
• This Consent will not be valid and binding on the Landlord, Assignor and Assignee unless and until it has been completely executed by all of the parties.

IN WITNESS WHEREOF the Assignor, the Assignee and the Landlord have duly affixed their signatures under hand and seal on this ________ day of ________________, ________.

Last Updated February 2, 2024

Landlord's Consent to Lease Assignment Information

What is a landlord's consent to lease assignment.

Landlords may use a Consent to Lease Assignment to give formal approval to a tenant who wishes to assign their interest in a lease agreement to someone new.

Some tenants need to exit their lease before their rental term is complete (e.g. they may have to relocate for work, or perhaps they've chosen to pursue a new opportunity elsewhere). With their landlord's approval, tenants can transfer their rental rights and responsibilities to a new renter without breaking the original contract.

Why do I need the landlord's consent to assign my lease?

Without a Landlord's Consent to Lease Assignment, a tenant risks being held responsible for a breach of contract. Lease Agreements specify who exactly is allowed to live in a rental unit (i.e. the tenants and occupants on the lease). If a landlord discovers that there is an unauthorized occupant, they often have the option to:

• Evict or remove the occupant
• Terminate the original lease agreement
• Hold the original tenant liable for any damages

With a Landlord's Consent to Lease Assignment, tenants can ensure they are released of all liabilities while landlords can continue to operate their rental unit without hiccups.

Can a landlord refuse to assign a lease?

Although it's within a landlord's right to refuse a lease assignment request, they cannot do so unreasonably or arbitrarily. If a landlord refuses to consent, the tenant may wish to evaluate the landlord's reasoning to decide whether or not they should legally challenge the decision.

Be sure to consult your local landlord and tenant authority for more specific information about assigning a lease in your jurisdiction.

How does a lease assignment work?

With LawDepot's Lease Assignment Agreement , a tenant can transfer their rights and interest in a lease to an assignee. The assignee agrees to assume all of the obligations and responsibilities of the original tenant under the lease. Depending on the agreement with the landlord, the original tenant may or may not be held responsible for any breaches of the Lease Agreement.

Before preparing a lease assignment, tenants should first check the original lease agreement for any clauses that specify how an assignment can take place. It's also important to research how local landlord and tenant laws may affect the enforceability of a Lease Assignment Agreement. Finally, tenants should be sure to obtain their landlord's written consent.

Tenants can use LawDepot's Consent to Lease Assignment template as a request letter to their landlord, or landlords can fill out the form in response to a tenant request. Our template prompts you to include all of the necessary information for transferring interest in a lease, including:

• Information about the original lease
• The name of the new tenant
• The date the assignee takes over the lease
• Whether or not the original tenant is released of all liabilities

Once the landlord signs the consent form, the tenant can proceed with drafting or executing a Lease Assignment Agreement.

Who prepares the Lease Assignment Agreement?

The original tenant should prepare the Lease Assignment Agreement because the contract is between the assignor and the assignee. The landlord is not a party to this agreement. However, the original tenant should attach both the Landlord's Consent to Lease Assignment and a copy of the original lease to the Lease Assignment Agreement.

What is the difference between subletting and assigning a lease?

The main difference between subletting and assignment is, when subletting, the original tenant remains attached to the property—they're still the landlord's tenant and the landlord can pursue them if there are any issues. In assignment, a tenant severs their link to the property and transfers the original lease to a new tenant.

Related Documents:

• Lease Assignment Agreement : transfers a tenant’s entire interest in and obligations under a lease to a third party, who then assumes the rights and responsibilities of the original agreement
• Commercial Sublease Agreement : allows a tenant to transfer their remaining rights and obligations under a commercial lease to a subtenant without breaking the original lease
• Residential Sublease Agreement : allows a tenant to transfer property rights and obligations to a subtenant for some of their residential lease term without breaking the original agreement

Frequently Asked Questions:

Landlord's Consent to Lease Assignment

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Unreasonably withholding consent to assign a lease

How unreasonable does a landlord have to be?

Leases will usually require a landlord’s consent before a tenant can assign, sublet, or otherwise part with possession of premises. This is understandable as a landlord needs the ability to protect their interest in their premises. In the current market however, a tenant’s need for premises can change quickly and often, particularly in retail units where customer preferences and footfall are vital.

Section 19(1) of the Landlord and Tenant Act 1927 says that for all leases where there is a requirement on a tenant to obtain a landlord’s consent before assigning, underletting or in any way changing possession of all or part of the premises, consent is not to be unreasonably withheld. As a result, a landlord must always act reasonably – although reasonable doesn’t necessarily mean correctly or justifiably – just what a reasonable person would do in those circumstances. The decision must be based on the relationship of the landlord and tenant and a landlord cannot look to better their position by refusing consent.

When can a landlord refuse consent?

It may be reasonable to withhold consent if the assignee does not appear able to make the rental commitments required under the lease. A profit level of ‘three times the annual rent’ is often used as a benchmark to show that a tenant can make the rental payments. That is not a hard and fast rule though and a landlord refusing consent on the basis that a tenant’s profit levels do not meet that criteria will not necessarily be reasonable. It would be reasonable to refuse consent where the proposed assignee would use the premises for a use which would be a breach of the user covenant. Similarly, the landlord can refuse consent if it wants to maintain a good tenant mix, for example in a shopping centre. It is also reasonable for a landlord to refuse to assign a lease to an assignee who would be in direct competition with their business.

However, it is unreasonable for a landlord to refuse consent where they look to obtain a variation to the lease to improve their position as a condition of granting consent or on any grounds which are discriminatory to the proposed assignee or sub-tenant. Also, a landlord cannot reasonably withhold consent to an underletting on the basis that to do so may set a low rent comparable for forthcoming rent reviews.

Less clear cut examples are where a landlord refuses consent to sub-let due to concerns about the long term viability of the sub-tenant. The landlord’s direct covenant with the tenant remains and so the landlord’s ability to collect rent should not be affected. However, it is possible that the market will perceive the sub-letting as a reduction in the value of the property and that could affect the landlord’s reversionary interest. Similarly if the landlord refuses consent to assign or sub-let on the basis of existing breaches of covenant by the tenant, it will depend on the severity of the breaches and the likelihood of the assignee or sub-tenant to remedy them. It would be unreasonable for a landlord to refuse consent to assign on the basis of minor disrepair works, but it may be reasonable to refuse consent to assign where there are substantial dilapidations and the assignee does not appear to have the means to remedy the defects. In cases like this whether or not refusal is unreasonable will depend on all the facts in that particular case.

Timing of applications

The timing of a landlord’s response is also covered by statute. The Landlord and Tenant Act 1988 Section 1(3) states that a landlord owes a duty to a tenant to respond to any application for consent within a reasonable time. What constitutes a reasonable time will depend on each set of circumstances and it would be impossible to set down hard and fast rules. However, case law does give us some indications as to what is and isn’t reasonable. The time period will run from when a landlord receives a complete formal application from the tenant and ends when the landlord’s decision is notified to the tenant. The time period between those two will need to be as short as is sensibly possible It will be weeks and not months, but holiday periods will be taken into account as will the complexities of the deal.

Ultimately it is for the tenant to demonstrate that the landlord is acting unreasonably rather than the landlord to prove its behaviour is reasonable. As such, a tenant making a formal application needs to provide as much information as possible at the time of making the application and provide all relevant details. It will be far easier for a tenant to prove that the landlord is unreasonably withholding consent where the application included complete and comprehensive supporting information, rather than where information has been provided piecemeal and reactively.

Landlords receiving applications need to act promptly as the time limits explained above will apply once the application is made. If you are unsure whether you need to treat the communication from a tenant as a formal application for consent to assign, then ask the question. Correspondence from a tenant saying that you are out of time to withhold consent will put a landlord on the back foot – even if consent would have been granted in any event.

When considering an application to assign, sublet or part with possession, or if you are a landlord you receive one, it is worth taking advice to ensure you are aware of your rights and the likely consequences of consent being refused.

If you require any further information please contact a member of our expert Real Estate Litigation  team.

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Important Considerations in Seeking a landlord’s Consent to Assignment

This article explores the key points which tenants must consider when seeking their landlord’s consent to an assignment of their lease. The topic may conveniently be divided into five sections, as follows:

• has an application for consent was submitted by the tenant? 
• what information can the landlord request in respect of the assignee?
• did the landlord withhold its consent to the assignment?
• was it unreasonable for the landlord to withhold its consent, contrary to s133B of the Conveyancing Act 1919 (NSW) (the Act ) (which provides that, where a lease requires the landlord’s consent to an assignment of the lease, the landlord’s consent must not be unreasonably withheld)?
• will the tenant be released from all future liability under the lease after the assignment?

Has an application for consent been submitted?

The starting point for a tenant is to submit to the landlord (usually) a written request to assign its leasehold interest in accordance with the terms of the lease ( Tenant’s Notice ). The landlord’s obligation to consider the tenant’s request for assignment only arises upon receipt of the Tenant’s Notice. In decision of Tamsco Ltd v Franklins Ltd 1 , the Court emphasised the significance of the tenant actually having to actually request the landlord’s consent. 

This is the case even where ‘the assignee is a person to whom there could be no reasonable objection 2 .  Before the tenant provides information relating to, for example, the assignee’s financial capabilities required for obtaining the landlord’s consent, it must properly communicate its request for consent to the landlord (in compliance with not only the assignment provisions, but also the notice provisions under the lease). 

What information can the landlord request in respect of the assignee?

The starting point here is to consider the terms of the assignment provision of the lease, which should specify the information the tenant must provide to the landlord in respect of the assignee. 

For example, many leases will require the tenant to prove to the landlord that the assignee:

• is a respectable, responsible and solvent person, capable of complying with the terms of the lease; and
• has adequate financial standing not inferior to that of the tenant. 

In this respect, it is common for tenants to provide to the landlord copies of the assignee’s tax returns and balance sheets (to evidence the adequate financial standing and solvency) and references from peers to evidence their responsibility and respectability in operating their business within the relevant industry. 

It should be noted that a landlord may not ‘oppressively demand extensive particulars or insist upon the equivalent of answers to interrogatories’ 3 .  All that is required is fair dealing between the parties to enable the landlord to make a ‘reasonable decision’ 4 .  So, it is important that landlords do not request any information inconsistent with what is permitted by the terms of the lease or which is irrelevant for the landlord making an informed decision in relation to whether its consent should be provided. 

Did the landlord withhold its consent to the assignment? 

The question here is whether after:

• formally requesting the landlord’s consent; and
• submitting to the landlord all information relating to the assignee required by the landlord (as dictated by the assignment provisions in the lease) to assess whether its consent should be provided to the assignment,  the landlord has refused to consent to the proposed assignment. 

In practice, where a landlord refuses to consent to an assignment of the lease, it will serve a notice to that effect on the tenant. However, where landlords are silent on whether they have consented to the assignment, their conduct becomes relevant for consideration. Courts have decided that some landlords, by virtue of their conduct alone, have consented to assignments. This occurred in Chamberlain Group Pty Ltd v Kids for Life Academy Pty Ltd 5 ,  where the landlord, for example:

• had knowledge that the assignee was already occupying the premises and did not object to such occupation; and
• collected rent from the assignee 6 .   

If the landlord did withhold its consent, was it unreasonable for it to do so? 

A landlord will have typically acted unreasonably where it has refused to provide its consent to an assignment for purposes unconnected with the subject matter of the lease 7 . For instance, it is generally unreasonable for a landlord to refuse to provide its consent to obtain a ‘collateral advantage’ which has no relationship with the terms of the lease. 

An example of this may include a landlord making the granting of its consent conditional upon a lump sum cash payment by the tenant to the landlord, an advantage which the landlord would not have otherwise been entitled to under the lease.

Will the tenant be released from all future liability under the lease after the assignment?

For commercial leases, if a lease is silent in relation to whether a tenant is released on assignment, then the tenant will not be released on assignment.  

For example, this will mean that where the assignee fails to pay rent under the lease after the assignment occurs, the landlord may still sue the tenant to recover the unpaid rent. 

If a tenant wants to be released on assignment, it is important for it to include an express release on assignment in the lease agreement or negotiate an express release within the deed of consent to assignment.

What does this mean for tenants?

Tenants must ensure that they have properly communicated to the landlord their request for the landlord’s consent to an assignment of the lease. It is always prudent to prepare the request in writing and serve it on the landlord in accordance with the notice provisions in the lease. 

Where the landlord has considered the request and unreasonably refuses to provide its consent, there are remedies available to tenants. Notably, tenants may seek a declaration by the NSW Supreme Court to the effect that the landlord has unreasonably withheld its consent to the assignment, contrary to section 133B of the Act. 

What does this mean for landlords?

When a tenant makes a formal request for consent to an assignment, landlords must ensure they are not taken to have impliedly (by their conduct) consented to the assignment of the lease. Landlords should:

• promptly acknowledge receipt of the tenant’s request for consent to the assignment; and
• request financial (and other) information relating to the proposed assignee in accordance with the terms of the lease (which, practically speaking, should be done at the same time they acknowledge receipt of the tenant’s request).  

This will equip landlords with all information they require to make a proper and informed decision as to whether they ought to be consenting to the assignment of the lease. However, landlords should note that they should only request information which would have a direct impact on their willingness to provide or withhold their consent. 

Furthermore, landlords must note the importance of ensuring that the tenant is not released on an assignment of the lease. This may also make leased assets more ‘bankable’ and may increase the capital value of landlords’ assets.

Contact us 

If you require any assistance relating to retail and commercial leasing transactions, commercial acquisitions and disposals and other real estate transactions, contact Partner John Frangi on 0417 252 203 or by email . 

1  [2001] NSWSC 1205.  2  Ibid [37].  3  Daventry Holdings Pty Ltd v Bacalakis Hotels Pty Ltd [1986] 1 Qd R 406, 543. 4  Ibid.  5  [2015] NSWCA 241. 6  Ibid [27]–[28].  7  Ashworth Frazer Ltd v Gloucester City Council [2001] UKHL 59 [3].

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• Practical Law

Can a landlord refuse to consent to an assignment because there are rent arrears?

Practical law resource id a-131-5958  (approx. 5 pages).

If you have not already seen it, you may find it useful to look at  Practice note: Landlord's consent for dealings with a lease and the Landlord and Tenant Act 1988 . As the note explains, whether or not a landlord has unreasonably refused consent is a question of fact depending on all the circumstances of the case. We cannot advise you on whether or not a particular landlord can withhold its consent in any particular case. 

In the case of outstanding rent, the mere fact that a landlord can identify a breach of covenant by the tenant does not mean that refusing consent is reasonable. It is necessary to consider the nature and the degree of arrears, and whether the landlord's position would be prejudiced by the requested licence.

When you say that the rent arrears cannot be "collected due to COVID-19", we assume what you mean is that the landlord has been unable to use the threat of forfeiture to enforce payment and the tenant has otherwise not responded to the landlord's actions in trying to obtain the rent. The various pandemic restrictions do not prevent landlords from taking all enforcement action. A landlord that is owed money can bring a court claim for debt. You might wish to read  Practice note, COVID-19: Coronavirus Act 2020 and the implications for recovering possession: What the CVA 2020 does not restrict commercial landlords from doing ).

The particular problem with an assignment is that the current tenant ceases to be the tenant under the lease, and the landlord therefore loses some of its enforcement powers, even if the contractual debt remains with the outgoing tenant. 

We touch upon this in the drafting notes to Standard document, Licence to assign and change use: new lease with AGA and guarantee . In the note for clause 2 we say, in part:

"Care should be taken with regard to arrears. On an assignment of a new lease, any arrears will remain with the outgoing tenant; the assignee will only become liable for payments under the lease from the date of assignment. The landlord may therefore wish to make settlement of the arrears a condition of the assignment."

We suggest that you read the practice note, and consider all the facts, but it is often difficult to be sure if a landlord can legitimately withhold its consent to a tenant's request. 

A colleague in Practical Law Property Litigation has raised an interesting point. Generally speaking, if a landlord has a right to forfeit a lease, then granting a licence to assign waives the right to forfeit (see Practice note, Forfeiture: a practical overview: Waiver of the right to forfeit ). However, under the Coronavirus Act 2020, section 82(2) provides that no conduct on the part of a landlord is to be regarded as waiving a right to forfeit unless the landlord gives an express waiver in writing. There is currently no guidance or binding authorities on what this means in practice, or what an "express waiver in writing" would need to look like. It will probably need a court case or two before there is any certainty and this could well not happen until 2022. As such, the assignee might also need to know that there is no risk of forfeiture for the assignor's debts. The right to forfeit for the arrears might be (and we are unsure, as we say) preserved until the restrictions expire in March 2022 (in England).

Another tricky and untested point is whether, if the landlord does retain the right to forfeit after permitting an assignment (and if the licence to assign does not itself constitute an express written waiver of the right), this continued right could be relevant to the question of whether a refusal to consent is reasonable. 

It's quite difficult to know if a landlord can withhold consent to an assignment in normal times, but these are added complications. A practical way forward might be to broach the subject of the possible continuation of the right to forfeit and to try to sort out what could realistically happen in terms of the arrears now. 

We are going to publish this Ask, because it's an interesting (and potentially difficult) point. 

Some further thoughts (which may or may not assist!):

It has been held that it is reasonable to withhold consent where granting consent to an assignment would result in a waiver of the landlord's right to forfeit: Yorkshire Metropolitan Properties v Co-operative Retail Services [1997] EGCS 57.

However, where a landlord does not, in fact, have the right to forfeit (for example, where proceedings are, or the service of a s.146 notice in a case not involving rent arrears is, unjustified) that will not be a reasonable reason for refusing consent: Straudley Investments v Mount Eden Land (No. 2) [1997] EGSC 175.

Other cases which deal with this point include Orlando Investments v Grosvenor Estate Begravia [1989] 2 EGLR 74; Sood v Barker [1991] 1 EGLR 87; and Beale v Worth [1993] EGCS 135.

Quite how these arguments would play out in a context of s.82 of the Coronavirus Act 2020 is unclear, as suggested above.

One might argue that the overriding principle is that there has to be a connection between the reason for refusing to grant consent and the assignment. The landlord may be able to demontrate this if by granting consent his ability to enforce the arrears is worsened somehow, not necessarily only by a waiver of the right to forfeit.

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This commercial lease assignment is between , an individual a(n) (the " Original Tenant ") and , an individual a(n) (the " New Tenant ").

On or about , the Original Tenant and (the " Landlord ") entered into a lease agreement (the " Lease ").

The Lease covers the commercial property located at ,    , and more particularly described as follows: (the " Premises "). The Premises contains feet of interior floor space.

Under section of the Lease, the Original Tenant is permitted to assign its interest in the Lease, with the consent of the Landlord.

The Original Tenant wishes to assign to the New Tenant its rights in, and delegate all of its obligations under, the Lease, and the New Tenant wishes to accept this assignment.

The parties therefore agree as follows:

1. ASSIGNMENT.

The Original Tenant assigns to the New Tenant of all its rights in, and delegates to the New Tenant all of its obligations under, the Lease. This transfer will become effective as of (the " Effective Date "), and will continue until the present term of the Lease ends.

2. ASSUMPTION OF RIGHTS AND DUTIES.

After the Effective Date, the New Tenant shall assume all rights and duties under the Lease, including the obligation to pay rent under the Lease when it is due. The Original Tenant will have no further obligations under the Lease The Original Tenant will remain bound to the Landlord under the Lease, notwithstanding the assignment . However, the Original Tenant remains responsible for obligations accruing before the Effective Date.

3. REIMBURSEMENT.

On or before the Effective Date, the New Tenant shall pay $ to the Original Tenant, which is the sum of:

• (a)  The security deposit held by the Landlord under the Lease; and
• (b)  The rent or other deposits paid in advance by the Original Tenant for any period after the effective date of this assignment.

4. INDEMNIFICATION.

• (a)  The Original Tenant shall indemnify the New Tenant against any award, charge, claim, compensatory damages, cost, damages, exemplary damages, diminution in value, expense, fee, fine, interest, judgment, liability, settlement payment, penalty, or other loss (a " Loss ") or any attorney's or other professional's fee and disbursement, court filing fee, court cost, arbitration fee, arbitration cost, witness fee, and each other fee and cost of investigating and defending or asserting a claim for indemnification (a " Litigation Expense ") arising out of the Original Tenant's breach of its obligations under the Lease before the Effective Date.
• (b) The New Tenant shall indemnify the Original Tenant against all Losses or Litigation Expenses relating to the Lease, except if those Losses or Litigation Expenses arise from the Original Tenant's failure to perform its obligations under the Lease before the Effective Date.
• (c)  The New Tenant shall indemnify the Original Tenant against all Losses or Litigation Expenses attributable to the acts or omissions of the New Tenant or its agents, contractors, or employees with respect to the Premises or any activities on the Premises. This indemnification will survive the termination of the Lease and this assignment.

5. CONTINUING EFFECTIVENESS OF LEASE.

This assignment is made on the understanding that all other terms of the Lease remain in full effect, including the prohibition against further assignments and subleases without the Landlord's express written consent.

6. ORIGINAL TENANT'S REPRESENTATIONS.

The Original Tenant represents that it:

• (a) has the power and authority to enter into and carry out this assignment;
• (b)  has not previously assigned its rights under the Lease;
• (c)  is the lawful and sole owner of the interests assigned under this assignment;
• (d)  the interests assigned under this assignment are free from all encumbrances;
• (e)  except for the Landlord and the Original Tenant, there are no parties in possession or occupancy of the Premises or any part of them, and there are no parties with possessory rights on the Premises or any part of them; and
• (f)  has performed all obligations and made all required payments under the Lease.

7. CONDITION OF PREMISES.

The New Tenant has examined and inspected the Premises and accepts them "as is" and in their present condition with all faults. Except as provided in this assignment, the Original Tenant makes no representations, covenants, or guaranties about the status, nature, or condition of the Lease or the Premises.

8. INTERPRETATION.

In interpreting the language of this assignment, the parties shall be treated as having drafted this assignment after meaningful negotiations. The language in this assignment will be construed as to its fair meaning and not strictly for or against either party.

9. GOVERNING LAW.

• (a) Choice of Law.  The laws of the state of govern this assignment (without giving effect to its conflicts of law principles).
• (b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in , .

10. AMENDMENTS .

No amendment to this assignment will be effective unless it is in writing and signed by a party or its authorized representative.

11. COUNTERPARTS; ELECTRONIC SIGNATURES.

• (a) Counterparts.  The parties may execute this agreement in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
• (b) Electronic Signatures.  This agreement, agreements ancillary to this agreement, and related documents entered into in connection with this agreement are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.

12. SEVERABILITY.

If any one or more of the provisions contained in this assignment is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this assignment, but this assignment will be construed as if those invalid, illegal, or unenforceable provisions had never been contained in it, unless the deletion of those provisions would result in such a material change so as to cause completion of the transactions contemplated by this assignment to be unreasonable.

13. NOTICES.

• (a) Writing; Permitted Delivery Methods.  Each party giving or making any notice, request, demand, or other communication required or permitted by this assignment shall give that notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this assignment: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile, or email.
• (b) Addresses. A party shall address notices under this section to a party at the following addresses:
• If to the Original Tenant:
• If to the New Tenant:
• (c) Effectiveness. A notice is effective only if the party giving notice complies with subsections (a) and (b) and if the recipient receives the notice.

14. WAIVER.

No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this assignment will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.

15. ENTIRE AGREEMENT.

This agreement constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement about the subject matter of this agreement. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this agreement are expressly merged into and superseded by this agreement. The provisions of this agreement may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this agreement by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this agreement. Except as set forth expressly in this agreement, there are no conditions precedent to this agreement's effectiveness.

16. HEADINGS.

The descriptive headings of the sections and subsections of this assignment are for convenience only, and do not affect this agreement's construction or interpretation.

17. EFFECTIVENESS.

This assignment will become effective when all parties have signed it.The date this assignment is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this assignment.

18. NECESSARY ACTS; FURTHER ASSURANCES.

Each party shall use all reasonable efforts to take, or cause to be taken, all actions necessary or desirable to consummate and make effective the transactions this assignment contemplates or to evidence or carry out the intent and purposes of this assignment.

[SIGNATURE PAGE FOLLOWS]

Each party is signing this agreement on the date stated opposite that party's signature.

[PAGE BREAK HERE]

LANDLORD'S CONSENT  AND RELEASE

As Landlord under the Lease, I hereby consent to this assignment of the Lease, and to the New Tenant's assumption of the Original Tenant's obligations under the Lease, including the obligation to pay rent when it is due. As of the Effective Date, I release the Original Tenant from all liability for obligations (including rent payments) under the Lease However, the Original Tenant remains primarily obligated as tenant under the Lease and I do not waive or relinquish any rights under the Lease against either the Original Tenant or the New Tenant.

EXHIBIT A Attach copy of Lease

Free Assignment of Commercial Lease Template

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How-to guides, articles, and any other content appearing on this page are for informational purposes only, do not constitute legal advice, and are no substitute for the advice of an attorney.

Assignment of commercial lease: How-to guide

Occasionally, tenants wish to leave a rental property before the end of their lease. Individuals may take new jobs in new cities, and companies may go out of business or sell their enterprises to a third party. 

Whatever the reason, tenants can transfer their original commercial lease to new parties by completing an assignment of the lease.

An assignment transfers one party's interest and obligations under a lease to another party. 

During these tenant transfers, the new tenant takes on the lease responsibilities, including paying rent and property maintenance of the leased premises, and the original tenant is released from most of their duties.

Successful property management begins with good documentation and a properly drafted, executed assignment: 

Ensures that all parties involved understand the obligations being transferred 

Defines the responsibilities that each party will have under the new arrangement 

Lays the foundation for a long-lasting landlord and new tenant relationship 

Important aspects to consider when drafting commercial leases

Laws about the original commercial lease agreement.

State laws governing real estate, renting, leasing, and assignments vary widely and can tremendously affect your arrangement. 

Since the tenant is legally responsible for this document, they must include specific information like financial statements in the commercial lease assignment. Consider your state and local laws for additional information required in your area.

Criteria for commercial landlords in providing consents

A landlord may consider only proper factors when deciding whether or not to consent to an assignment. 

Some criteria will be regarded as impermissible by courts, such as refusal based on race or sex of the proposed new tenant. If your landlord does not consent to your attempted assignment, ensure they give you clear written reasons for the decision. Failure to provide such reasons can itself be deemed unreasonable.

Consequences of not providing consent 

It is essential to seek the landlord’s permission for the proposed transfer of the duties. 

Depending on your jurisdiction or the terms of your original lease, a landlord’s failure to respond to your request for consent to assignment within a specific time may be deemed consent. Sometimes, it may give the assigning tenant grounds to terminate the lease. Review the original lease and your state’s laws for additional details.

Although a landlord is not required to consent to a lease assignment agreement, in some cases, your lease will state that a landlord’s consent will not be “unreasonably” withheld. This is more common in commercial leases than in a residential lease. What is considered unreasonable varies from jurisdiction to jurisdiction, and you should review the laws in your area (and the assignment clause in your original lease agreement) for additional information. On the other hand, if the lease states that the landlord may use their “sole discretion” to evaluate the new tenant, they can veto this assignment without any reason.

Rights of the original tenant

The original tenant cannot assign more rights than the original lease. For example, if the lease term is one year, the assignment term cannot be two years.

Review the lease assignments before signing

Most leases require the landlord’s written consent before an assignment becomes effective. Review the assignment provisions and the original lease agreement for additional information and see if other requirements must be met to make the lease assignment agreement valid.

Get the assignment signed

Sign three copies of the assignment, one for you, the other party, and the landlord. Depending on the nature of its terms, you may decide to have the document witnessed or notarized. This will limit later challenges to the validity of a party’s signature. 

Be sure the assignee gets a copy of the original lease by attaching it to the assignment. Its terms will bind them, and they should know their new obligations and rights.

If your agreement is complicated, contact an attorney to help draft a document that meets your needs. 

Key components of a commercial lease assignment 

The following instructions will help you understand the terms of your assignment. 

Introduction 

In this section, identify the parties and, if applicable, what type of organization(s) they are. Write down how the document identifies each party. For example, the current tenant can be addressed as the “original tenant” or “assignor” as they assign the lease to the new tenant, and the new tenant can be called the “new tenant” or “assignee.”

Furthermore, add the date on which the assignment will become effective – when it is signed. 

The “whereas” clauses, referred to as recitals, define the world of the agreement and offer essential background information about the parties. 

In this assignment, the recitals include a simple statement of the parties’ intent to assign the original tenant’s interest in the lease and the new tenant’s intent to assume it. Provide a brief description of the rented property and the landlord’s name under the lease.

You don't need to include a complete legal description for the property description, but provide enough information to identify it. For individual houses, the address will usually be sufficient. If the property has a specific name (e.g., “Lincoln Towers”), include that as well. If only a section of the premises is assigned, clarify that in this description. 

This section mentions the assignor’s assignment of their right and interest in the lease to the assignee. This assignment clause allows you to determine whether all of the assignor’s interest in the lease is being assigned or only part of it. For example, if interest in only one-half of the premises is being assigned, the document should note this. 

Assumption of rights and duties

This section clarifies the assignor’s responsibilities for the duties listed under the lease (e.g., rent, maintenance of property, etc.). For example, whether:

The assignor is ultimately released from any liability they had under the lease. For example, if the assignee defaults, the landlord cannot seek payment from the assignor.

The assignor will be liable to the landlord if the assignee defaults. 

In any event, the assignor will remain responsible for any obligations that occurred before the assignment. In other words, if the damage happened to the apartment before the transfer or the assignor did not fulfill another obligation under the lease, the assignor remains responsible for the building occupied.

Reimbursement

In many rental relationships, amounts are paid in advance or deposited as security for the landlord. 

At the end of the lease, this security deposit (with deductions subtracted or interest added) is returned to the tenant. If an entire interest is assigned, the lease does not end, and the assigning party cannot get this money back. This paragraph requires the assignee to pay those amounts to the assignor, and any later return of that money by the landlord will be made to the assignee.

Indemnification

In such clauses, the assignee promises to bear the financial cost of any injury the assignor suffers due to its assignment and any lawsuits arising from its activities on the premises. Note that there is an exception for things done by the assignor before the effective date of the assignment — the assignor remains responsible for those actions.

Continuing effectiveness of lease 

Here, emphasize that the original lease terms are still effective to the assignee, except for the assignment.

Assignor’s representations and warranties 

List the assignor’s promises under the assignment. Note that this is not a detailed list of services to be provided. Instead, this is the assignor’s assurance that the lease and the rental interest it’s providing are helpful (i.e., no one else lives or has an interest in the place, the lease is still in effect, the assignor is not behind in rental payments, etc.). If there are additional representations the assignor should be making, feel free to include those here.

Condition of premises

Here, mention that the premises are not warranted to be perfect or valuable in a particular way. Instead, the assignee is taking the rented property for what it is and is accepting it in that state.

Additional terms of assignment

This optional provision allows the assignor and the assignee to include any representations, warranties, or other provisions particular to their situation. 

Interpretation

This section provides information that both parties were on equal footing in negotiating the consent to assignment. In many cases, a contract is interpreted favorably by the individual who did not draft it. This clause clarifies that both parties were involved in the drafting, so the document should not be read in favor of (or against) either.

Here, list the addresses to which all official or legal correspondence should be delivered. This can be the tenant’s business address or the mailing address for both the assignor and the assignee. 

Modification

This section indicates that any changes to the document are only effective if they are made in writing and signed by both parties.

Governing law

This section allows the parties to choose the state laws used to interpret the document. 

Counterparts; electronic signatures

This section explains that even if the parties sign the assignment in different locations or use electronic devices to transmit signatures (e.g., fax machines or computers), the separate pieces will be considered part of the same agreement. In a modern world where signing parties are often not in the same city—much less the same room — this provision ensures that business can be transacted efficiently without sacrificing the validity of the agreement as a whole.

Entire agreement

This clause mentions that the document parties are signing is “the agreement” about the issues involved. Unfortunately, the inclusion of this provision will not prevent a party from arguing that other enforceable promises exist, but it can provide you some protection from these claims.

Landlord’s consent and release 

Review the terms of the original lease agreement to determine whether or not the landlord’s consent is required to make the assignment effective. This is usually the case. If so, have the landlord sign the document. 

Frequently asked questions

What is the purpose of an assignment of lease.

Whether it's because it's time to move to a new space or city, business isn't booming, a company gets sold, or otherwise, sometimes commercial tenants must leave a lease before it ends. And sometimes, they may want to transfer the responsibilities of their lease to someone new. A lease assignment occurs in this case.

Here's the information you'll need to have handy to complete your assignment of commercial lease:

Who the old tenant is : Have their name and contact information ready

Who the new tenant is : Have their information available

What is the difference between an assignment and a sublease?

An assignment transfers one party's interest in an agreement to a third party. In this case, the original tenant gives all their interest to a new tenant. That new tenant steps into the shoes of the old tenant and the old tenant is released from most of their obligations under the lease (although this can be changed by agreement). 

This is not the same as a sublease. Under a sublease , a third party is granted only those specific rights provided in the sublease. The original tenant remains ultimately liable for residual obligations under the lease or any failures of the new tenant to meet their obligations. This means that the original tenant will be responsible (in equal measure with the new tenant) for any skipped rent payments or damage to the property.

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