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by: Zackallen
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Date: Mon, 25 Apr 2011 Time: 11:24 PM

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Sometimes an existing tenant wishes to transfer his lease to a new tenant, usually one who was not selected by the landlord. The subject arises more often for commercial properties because they typically have multi-year leases and because a lease transfer is required when a tenant sells his business to another who wishes to retain the same location of operations. The issue is usually not as significant for a residential lease because, on average, a residential lease will usually have only a few months yet to run when the tenant decides he wishes to terminate his occupancy and the sale of a business is not an issue.

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For a sublease, the existing tenant leases the space to a new tenant, a subtenant. The existing tenant remains the landlord's tenant and becomes the landlord of the new tenant. The existing tenant is responsible to the landlord for actions of the subtenant. In general, the landlord must enforce the lease through the old tenant.

A good lease agreement will require that the landlord approve any potential subleasing or assignment. An inadequate lease might give the landlord absolutely no control or options. Many states will not allow a landlord to outright prohibit either or both methods of lease transfer, but a landlord can almost always have reasonable requirements for approval. For example, the landlord can usually require the new tenant to meet the same qualifications as the old tenant. This might include screening (e.g., ID verification, credit report, criminal checks, etc.) and specific financial requirements. Whether one can force the assignee tenant to accept different terms would depend upon (1) terms of the lease agreement, (2) issues related to the nature of the business, (3) qualifications of the new tenant, and (4) possible other factors. In general, commercial leasing allows the landlord more flexibility and control than does residential leasing.

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