Commercial Lease Assignment

Real estate lawyers frequently include a clause in their commercial leases dealing with the assignment or subletting of the lease.  Frequently these clauses include language like “This lease may not be assigned or sublet without the written consent of the Landlord, which shall not be unreasonably withheld.”

A recent case from the Alabama Supreme Court underscores the need to carefully draft such provisions.  In a case of first impression, The Pantry, Inc. v. Mosley, No. 1110759 (Ala. May 3, 2013), the Court found that a Landlord withholding of consent to assignment of a commercial lease is unreasonable as a matter of law when motivated solely by a desire to renegotiate rent terms different from those provided for in the lease.

A real estate lawyer experienced in drafting leases can provide several options such as:  a prohibition against assignment or subletting, drafting language that includes a rent escalation clause, and many other variables.  Of course a commercial tenant would want an unrestricted right to assignment or subletting or at least a clause not prohibiting a transfer of the lease.

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