Commercial Lease Assignment

Purpose of This Template

A Commercial Lease Assignment transfers all of a tenant's rights and obligations under a lease to a new tenant (assignee). This is commonly used when:

• Selling a Business - Buyer needs to take over the lease
• Business Closure - Exiting tenant finds replacement
• Restructuring - Transferring lease to related entity
• Change of Ownership - New ownership requires lease in their name

Assignment vs. Sublease: Key Differences

Pre-Assignment Checklist

Review Original Lease

☐ Locate original lease agreement and all amendments
☐ Review assignment clause provisions
☐ Identify consent requirements
☐ Check for assignment fees
☐ Review change of control provisions (if entity tenant)
☐ Note any recapture rights of Landlord
☐ Confirm remaining lease term
☐ Review renewal options (do they transfer?)
☐ Check for restrictions on assignee type

Understand Landlord's Rights

Consent Requirements:
☐ No restriction - Assignment allowed without consent (rare)
☐ Consent required, reasonable standard - Landlord may not unreasonably withhold
☐ Consent required, sole discretion - Landlord has broad refusal rights
☐ Consent required, no standard stated - Varies by state law

Recapture Rights:
☐ Landlord has recapture right: ☐ Yes ☐ No
☐ If yes, Landlord may terminate lease instead of consenting
☐ Tenant's right to rescind assignment request if Landlord recaptures: ☐ Yes ☐ No

Evaluate Proposed Assignee

☐ Financial statements reviewed
☐ Credit check completed
☐ Business references verified
☐ Prior landlord references checked
☐ Business plan reviewed
☐ Proposed use complies with lease
☐ Proposed use complies with zoning
☐ Insurance capability confirmed

Assignment and Assumption of Lease

Parties

ASSIGNOR (Current Tenant):
| Field | Information |
|-------|-------------|
| Legal Name | |
| Entity Type | ☐ Corporation ☐ LLC ☐ Partnership ☐ Individual |
| Address | |
| Phone | |
| Email | |

ASSIGNEE (New Tenant):
| Field | Information |
|-------|-------------|
| Legal Name | |
| Entity Type | ☐ Corporation ☐ LLC ☐ Partnership ☐ Individual |
| Address | |
| Phone | |
| Email | |
| Primary Contact | |

LANDLORD:
| Field | Information |
|-------|-------------|
| Legal Name | |
| Address | |
| Phone | |
| Contact Person | |

Article I: Lease Information

Section 1.1 - Original Lease

Section 1.2 - Lease Amendments

Section 1.3 - Current Lease Terms

Article II: Assignment

Section 2.1 - Assignment of Lease

Assignor hereby assigns, transfers, sets over, and conveys to Assignee all of Assignor's right, title, and interest in and to the Lease, including:

☐ All rights to occupy and use the Premises
☐ All rights under any renewal options
☐ All rights under any expansion options
☐ All rights to signage
☐ All rights under any exclusivity provisions
☐ All rights to parking
☐ All rights to common areas
☐ Security deposit: ☐ Transferred to Assignee ☐ Refunded to Assignor
☐ Prepaid rent: ☐ Prorated ☐ Credited to Assignee

Section 2.2 - Effective Date

Assignment effective as of: ___________________________________

Section 2.3 - Consideration

In consideration for this assignment:
☐ Assignee pays Assignor: $_____________
☐ No additional consideration beyond assumption of lease obligations
☐ Other consideration: _________________________________

Article III: Assumption of Obligations

Section 3.1 - Assignee's Assumption

Assignee hereby assumes and agrees to perform ALL obligations of "Tenant" under the Lease from and after the Effective Date, including but not limited to:

☐ Payment of base rent
☐ Payment of additional rent (CAM, taxes, insurance)
☐ Maintenance obligations
☐ Insurance requirements
☐ Compliance with rules and regulations
☐ Compliance with permitted use restrictions
☐ All other tenant obligations under the Lease

Section 3.2 - Assignee's Acknowledgments

Assignee acknowledges:
☐ Receipt and review of complete Lease (including amendments)
☐ Inspection of Premises
☐ Acceptance of Premises in current condition
☐ No reliance on Assignor's representations about the Premises
☐ Understanding of all Lease obligations

Article IV: Assignor's Continuing Liability

Section 4.1 - Release of Assignor (If Granted by Landlord)

☐ Assignor IS released from all Lease obligations from and after the Effective Date
☐ Assignor IS NOT released and remains liable as guarantor of Assignee's performance

Section 4.2 - Scope of Continuing Liability (If Not Released)

If Assignor is not released:
☐ Assignor remains liable for all Lease obligations
☐ Landlord may pursue Assignor without first pursuing Assignee
☐ Assignor waives notice of default by Assignee
☐ Assignor waives notice of amendments to Lease
☐ Assignor's liability continues through: ☐ End of term ☐ _____ years ☐ Indefinitely

Section 4.3 - Assignor's Indemnification by Assignee

☐ Assignee shall indemnify Assignor against claims arising from Assignee's use of Premises
☐ Assignee shall indemnify Assignor against claims arising from Lease defaults after Effective Date
☐ If Assignor must pay any amounts under continuing liability, Assignee shall reimburse Assignor

Article V: Security Deposit

Section 5.1 - Existing Security Deposit

Section 5.2 - Security Deposit Transfer

☐ Option A: Transfer to Assignee
- Assignor's right to security deposit transferred to Assignee
- Assignee shall look only to Landlord for return
- Assignee pays Assignor: $_____________ for deposit

☐ Option B: Refund to Assignor
- Landlord refunds security deposit to Assignor
- Assignee provides new security deposit to Landlord: $_____________

☐ Option C: Increased Deposit Required
- Existing deposit: $_____________
- Additional deposit required: $_____________
- Total new deposit: $_____________

Article VI: Prorations and Adjustments

Section 6.1 - Rent Proration

☐ Rent prorated as of Effective Date
☐ Assignor responsible through: _____________
☐ Assignee responsible from: _____________
☐ Proration calculation attached as Exhibit A

Section 6.2 - Operating Expenses / CAM

☐ Current year estimates: $_____________/month
☐ Prior year reconciliation: ☐ Paid by Assignor ☐ Split ☐ Paid by Assignee
☐ Current year reconciliation: ☐ Prorated ☐ Paid by Assignee

Section 6.3 - Prepaid Rent and Expenses

☐ Prepaid rent credited to Assignee: $_____________
☐ Prepaid expenses credited to Assignee: $_____________

Section 6.4 - Utility Transfers

☐ Electric account transferred
☐ Gas account transferred
☐ Water account transferred
☐ Final readings obtained as of: _____________

Article VII: Representations and Warranties

Section 7.1 - Assignor's Representations

Assignor represents and warrants:
☐ Assignor has full authority to assign the Lease
☐ Lease is in full force and effect
☐ No uncured defaults exist under the Lease
☐ No amendments or modifications except those disclosed
☐ No outstanding landlord claims against Assignor
☐ No pending disputes with Landlord
☐ All rent paid through: _____________
☐ Security deposit amount is: $_____________
☐ No setoffs or credits exist except: _____________

Section 7.2 - Assignee's Representations

Assignee represents and warrants:
☐ Assignee has full authority to assume the Lease
☐ Assignee has financial capacity to perform Lease obligations
☐ Assignee's intended use complies with Lease
☐ Assignee has reviewed and understands the Lease
☐ Assignee accepts Premises in current condition

Article VIII: Landlord Consent

Section 8.1 - Consent Required

☐ Landlord consent is required under the Lease
☐ Landlord consent has been obtained (attached as Exhibit B)
☐ Conditions of consent: _________________________________

Section 8.2 - Assignment Fee

☐ No assignment fee required
☐ Assignment fee: $_____________ paid by: ☐ Assignor ☐ Assignee ☐ Split

Section 8.3 - Landlord's Review Costs

☐ Assignor/Assignee shall reimburse Landlord's reasonable costs
☐ Estimated costs: $_____________
☐ Paid by: ☐ Assignor ☐ Assignee ☐ Split

Article IX: Release of Personal Guarantees

Section 9.1 - Existing Personal Guarantees

☐ No personal guarantees exist
☐ Personal guarantees exist from:
| Guarantor Name | Guarantee Date | Status |
|----------------|----------------|--------|
| | | ☐ Released ☐ Continues |
| | | ☐ Released ☐ Continues |

Section 9.2 - New Personal Guarantees

☐ No new personal guarantee required
☐ Personal guarantee required from: _________________________________
☐ Guarantee terms: _________________________________

Article X: Conditions Precedent

Section 10.1 - Conditions to Effectiveness

This Assignment shall not be effective until:
☐ Landlord's written consent obtained
☐ All assignment fees paid
☐ New security deposit (if required) delivered
☐ Insurance certificates delivered
☐ All prorations paid/credited
☐ Keys and access devices transferred
☐ Other: _________________________________

Article XI: Miscellaneous Provisions

Section 11.1 - Governing Law

This Assignment governed by laws of: State of _________________________________

Section 11.2 - Notices

All notices to addresses stated above or as updated in writing.

Section 11.3 - Entire Agreement

This Assignment (including exhibits) constitutes the entire agreement regarding the assignment.

Section 11.4 - Binding Effect

This Assignment binds the parties and their successors and assigns.

Section 11.5 - Counterparts

May be executed in counterparts; electronic signatures accepted.

Signature Page

ASSIGNOR:
| | |
|---|---|
| Entity Name | _________________________________ |
| By (Signature) | _________________________________ |
| Printed Name | _________________________________ |
| Title | _________________________________ |
| Date | _________________________________ |

ASSIGNEE:
| | |
|---|---|
| Entity Name | _________________________________ |
| By (Signature) | _________________________________ |
| Printed Name | _________________________________ |
| Title | _________________________________ |
| Date | _________________________________ |

Landlord Consent to Assignment

Consent Form

The undersigned Landlord hereby:

☐ CONSENTS to the assignment of the Lease from Assignor to Assignee, subject to the following:

Conditions of Consent:
☐ This consent applies only to this specific assignment
☐ No waiver of future assignment consent requirements
☐ Assignee assumes all Lease obligations
☐ Security deposit: ☐ Transfers to Assignee ☐ New deposit of $_____ required

Release of Assignor:
☐ Assignor IS RELEASED from all Lease obligations effective upon the Assignment Effective Date
☐ Assignor IS NOT RELEASED and shall remain liable as follows:
☐ Primary liability (same as Assignee)
☐ Guarantor of Assignee's performance
☐ Limited to: _________________________________

Additional Conditions:
☐ Personal guarantee required from: _________________________________
☐ Insurance updated to name Assignee
☐ Assignment fee of $_____________ received
☐ Other: _________________________________

LANDLORD:
| | |
|---|---|
| Entity Name | _________________________________ |
| By (Signature) | _________________________________ |
| Printed Name | _________________________________ |
| Title | _________________________________ |
| Date | _________________________________ |

Exhibit A: Proration Schedule

Rent and Expense Prorations

Effective Date of Assignment: _________________________________
Days in Month: _______
Assignor's Days: _______
Assignee's Days: _______

Security Deposit:
| | Amount |
|---|---|
| Existing deposit | $ |
| Transferred to Assignee | $ |
| Payment from Assignee to Assignor | $ |
| New deposit from Assignee | $ |

Net Settlement:
| | Amount |
|---|---|
| Prorations owed by Assignor | $ |
| Prorations owed by Assignee | $ |
| Security deposit settlement | $ |
| Net payment from ______ to ______ | $ |

Exhibit B: Landlord Consent Letter

(Attach signed landlord consent or consent form above)

Exhibit C: Original Lease and Amendments

(Attach complete copy of original lease and all amendments)

Assignment Completion Checklist

Pre-Assignment

☐ Original lease reviewed
☐ Landlord consent requirements identified
☐ Assignee due diligence completed
☐ Assignment agreement drafted
☐ Landlord consent requested
☐ Assignment fee paid (if required)

At Assignment

☐ Landlord consent obtained in writing
☐ Assignment agreement signed by all parties
☐ Prorations calculated and paid
☐ Security deposit transferred/adjusted
☐ Insurance certificates updated
☐ Keys and access devices transferred
☐ Utilities transferred

Post-Assignment

☐ Notice to all parties with effective date
☐ Assignor records updated
☐ Assignee records established
☐ Release of Assignor documented (if applicable)
☐ Personal guarantee releases obtained (if applicable)
☐ All documents filed securely

State Law Considerations

Landlord Consent Standards

States with "Reasonable Consent" Implied:
California, Colorado, and others imply a reasonableness standard even when lease is silent. Landlord cannot arbitrarily withhold consent.

States Allowing Arbitrary Refusal:
New York and some others allow arbitrary refusal if lease doesn't specify reasonableness standard.

Reasonable Grounds for Landlord Refusal

• Assignee's financial qualifications inadequate
• Assignee's proposed use incompatible
• Assignee's business reputation concerns
• Assignee lacks business experience
• Assignment would violate exclusive rights of other tenants

Unreasonable Grounds for Refusal

• Desire to charge higher rent
• Personal dislike of Assignee
• Desire to recapture space without valid recapture clause
• Discriminatory reasons

Important Warnings

Assignor's Continuing Liability

Unless specifically released by Landlord, the original tenant (Assignor) typically remains liable for all Lease obligations even after assignment. Obtain a written release.

Get Everything in Writing

Verbal consents and agreements are unenforceable for lease assignments. Ensure all consents and releases are in writing and signed.

Review Assignment Clause Carefully

Some leases have complex assignment provisions including recapture rights, profit-sharing requirements, or automatic rent increases upon assignment. Know what you're agreeing to.

Timing of Landlord Consent

Allow adequate time for landlord review and approval. Some leases specify timeframes; if not, "reasonable time" applies (typically 2-4 weeks).

This template is provided for informational purposes only and does not constitute legal advice. Lease assignments involve complex legal and financial issues. Consult with a qualified real estate attorney before executing any lease assignment documents.