Assignment of Lease and Commercial Property Leases
Are you renting a property for commercial use? Do you want to move, but have a contract with your landlord preventing you from doing so? Feeling stuck?
How to Get Out of a Commercial Lease
An assignment of lease may be the answer if you’re unhappy about your current commercial lease situation. If you know of someone, or can find someone who would be willing to take over as tenant of the property, you can apply to your landlord for an assignment of lease. If everyone agrees, the lease can be handed over to the new tenant, freeing you from many of your obligations. However, it is worth noting that many leases state that the tenant who is selling has to guarantee the performance of the new occupants. Sometimes it may be possible to negotiate your way out of this, so it’s a good idea to get early advice about this.
Sometimes, an assignment of lease is not permitted. If you are not sure about your current lease then you can talk to us to find out what your options are.
In some cases, a landlord can refuse to give an assignment of lease. For example, if you were renting a warehouse and using it for your bookbinding business, but the new tenant intends to use it as a car-repair centre, the landlord could refuse permission because the property would be used for a different use from that in the lease. A landlord can also refuse if the new tenant’s references aren’t good enough, or for financial reasons. If you are unsure talk to one of our experienced solicitors who will be able to tell you what needs to be done.
If the lease allows, and unless your landlord has good reason not to give permission, assignments are often the easiest way of getting out of a commercial lease. The new tenant will be vetted in the same way as you, with financial checks and references, and will have to sign the lease themselves.
Generally an assignment of lease is the easiest and fastest way to hand the lease over to someone else. Your landlord must respond quickly and in writing and, if there is anyone else to ask (i.e. if your landlord has a landlord himself), the permission of everyone must also be sought quickly.
An assignment of lease might be the best thing for your business, but to make sure that you act within the law, and to know where you stand, call us for help in contacting your landlord. We can also help in negotiation, securing the future of your business and ensuring an amicable and efficient solution for all concerned.
Go back to find out more about Commercial Property Law.
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