How To Circumvent A Lease’s Assignment And Subletting Restrictions

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Last week, we alluded to a lease transfer situation that had recently come across our desk, and then Ruminations detoured to its usual ranting to start a discussion about why a landlord should have any right to interfere with its tenant assigning the lease or subletting the leased space. Thanks for the comments we got directly to Ruminations by way of comments, by way of comments posted to LinkedIn, and privately.

That discussion is over. The “norm” for leases is that the landlord will have some control over assignments and sublettings. That’s our starting point today.

We promised to use this week’s posting to tell readers about what “triggered” us to get into the topic of lease transfers. So, here it is. [Read more…]

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Vote Here For No Assignment Or Subletting Restrictions In Leases

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A situation came across our desk this week and we thought we’d work it into a piece about circumventing assignment and subletting restrictions. As we started to scribble some notes, we were forced to rethink some of the whys and wherefores of these restrictions in the first place. And, that’s the plan today, leaving “circumvention” for later, probably next week.

As has been said here and elsewhere, a lease is a conveyance, more particularly of a “non-freehold” estate in land. It has a limited duration and isn’t really an ownership interest. What is does do is give the tenant “exclusive possession” of the land. And, by “exclusive,” it means that even the landlord does not have any right to possess or use the land (or premises). [Read more…]

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An assignment is not a subletting, and vice versa.

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Following last week’s posting about what Ruminations would call a misunderstanding regarding the economic theory behind the freedom to assign a lease, we received some calls to discuss how an assignment differs from a sublease. Given the frenetic activities involved in getting ready for this past weekend, Ruminations was happy to comply by taking advantage of what seemed like easy pickings – republishing a snippet from a piece written in 2008.

An assignment is not a subletting, and vice versa. The underlying considerations are not the same. By assignment, the new occupant – the assignee – becomes the tenant itself. Its right to possession of the premises is grounded in real property law—the law of conveyances. [Read more…]

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Assigning a Lease – Does the Landlord Really Own the Property?

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“You can’t freely assign your lease because I own the property. I’m in the real estate business. You aren’t. No one is going to make a profit from the real estate business but me.”

What a refrain. You can’t have been in the lease-making business very long if you haven’t heard this from a landlord or said this to a tenant. The problem is that there is no basis behind such a statement. [Read more…]

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