Assignment & Subleasing
The provisions governing whether a tenant may transfer the lease or rent space to someone else.
01
What It Is
An assignment transfers the tenant's entire interest in the lease to another party. A sublease keeps the original tenant on the lease while another occupant uses some or all of the space.
Most commercial leases permit both only with the landlord's consent, and the standard for that consent — reasonable, sole discretion, or subject to stated conditions — is a negotiated point.
02
Why It Matters
These clauses are the tenant's primary exit path. Business plans change, and the ability to transfer a lease can be the difference between an orderly transition and paying rent on space no longer needed.
They also matter when a business is sold. If a buyer cannot take over the lease, the location may not transfer with the business, which affects value.
For owners, consent standards, recapture rights, and profit-sharing on subleases protect control over the tenant mix and the property's income.
03
Common Misconceptions
- "Subleasing releases me from the lease." Generally it does not; the original tenant usually remains liable.
- "Selling my business automatically transfers the lease." Most leases treat a change of control as an assignment requiring consent.
- "The landlord must approve any qualified replacement." Only if the lease sets a reasonableness standard.
04
Questions to Ask
- What standard applies to the landlord's consent, and how long may review take?
- Is a sale of my business or entity treated as an assignment?
- Does the landlord have a recapture right if I request to sublease?
- Will excess rent from a sublease be shared, and in what proportion?
- Am I released from liability after an approved assignment?
05
Related Reading & Resources
The most successful real estate decisions often involve collaboration between several professionals working toward the same goal. Understanding each person's role helps you ask better questions and make more confident decisions.
06
Other Lease Terms
- Gross LeaseA lease where the landlord pays most or all operating expenses and the tenant pays a single, predictable rent.
- Modified Gross LeaseA middle-ground structure where landlord and tenant split operating expenses in a negotiated way.
- Triple Net (NNN) LeaseA structure where the tenant pays base rent plus property taxes, insurance, and maintenance.
- CAM ChargesThe shared costs of operating and maintaining areas all tenants use, billed as a pro-rata share.
- Letter of Intent (LOI)A preliminary document outlining the main business terms before a formal lease is drafted.
- Tenant Improvements (TI)Modifications made to a space so it fits the tenant's use, and the negotiated question of who pays.
Questions About a Commercial Lease?
Whether you're evaluating space for your business or preparing to lease your property, I'd be happy to help you review the terms, understand the economics, and negotiate an agreement that fits your plans.
Schedule a Commercial Leasing Consultation