For most businesses, a lease is a significant investment and, like most investments, flexibility or inflexibility in transferring or disposing of a lease can have significant bottom line repercussions. In negotiating a lease or in considering one’s options with respect to an existing lease, one of the most important provisions to consider is the “assignment and subletting provision”. For a tenant, carefully drafted exceptions to landlord imposed restrictions can result in significant future savings of time and money and can smooth the way for numerous corporate and business transactions. For a landlord, a carefully drafted provision can mean the difference between ending up with a tenant whose net worth and reputation are equivalent to what was relied upon when entering into the lease and being stuck with a struggling ne’er do well who requires endless oversight and may end up having to be forced out via a lengthy and expensive forcible detainer proceeding.
This article will first address some basic guidelines to understanding the differences between assignments and subleases and secondly will discuss a landlord’s ability to restrict such transfers