Assigning a commercial lease is a common business practice, especially if a business merges with another or relocates – unfortunately, that means getting stuck in an existing lease. This causes a business to assign and sublet commercial leases. 

Assignment of a lease means that one party will transfer all interest and obligation of that lease to a third party. In commercial settings, a tenant may assign their interest in the lease to another commercial tenant. Landlords may have the right to assign an interest in the lease to another landlord. 

However, these leases often come with many restrictions that do not allow companies to assign leases. Reviewing your lease before signing with a corporate law firm in Miami or making any moves to assign is important to help ensure you remain in legal compliance. 

Commercial subleases are when a company transfers part of its lease rights to a third party temporarily. A company may sublet a potion while remaining there or sublet the entire office until the end of the lease. This is common with seasonal companies such as holiday stores. 

When subletting, the sublessor remains obligated to the landlord for any terms associated with the lease, meaning the sublessor keeps privity of estate and privity of contract. The sublessee may only be liable to the original tenant and not the landlord. The original lease between the tenant and landlord stays throughout the sublease period. The original tenant will be responsible for the sublessee, where the sublessee would pay the original tenant’s an agreed-upon rent, and the original tenant would then pay the landlord. 

There are many reasons companies would consider assigning a commercial lease or subletting. If you have questions about your particular lease, contact an M&A attorney in Miami.