Commercial leases usually last for multiple years. Businesses can change in scope and function before the lease ends. In some cases, the company may fail or the owner may want to retire despite still having years of lease payments due.
In those cases, the future lease payments can quickly become a complicating factor when trying to wind down operations, relocate or sell the company. For some commercial tenants, the best solution might be to find another business that wants to take over the lease and use the space currently rented by the company.
Can commercial tenants make arrangements for an outside party to assume the remainder of their lease as a way of avoiding debt and possible collection efforts by a commercial landlord?
Leases often address assignment
Landlords frequently include clauses restricting or outright prohibiting lease assignment. There may be concerns about direct competition with other tenants or worries that the new tenant may not have the credit or history of successful operations necessary to qualify for the lease.
Tenants hoping to minimize expenses associated with early lease termination may need to review an existing lease with an attorney. Validating that the lease allows outside assignment before scheduling tours with potential new tenants can help business owners pursue the best solutions possible.
An attorney can help business owners determine whether lease assignment is an option for them and what, if any, other solutions could help them mitigate the cost of the outstanding lease payments still owed. Having experienced legal guidance in evaluating the details included in a commercial lease can help plan reasonable strategies for handling any remaining rent payments when ending a lease agreement early.