Assignment Of The Lease

Assignment Of The Lease-31
If you have questions, comments, or concerns, please contact us at [email protected]If you're renting, there are many reasons why you might need to leave the property before the end of the lease.However, if personal guarantees have been provided, the landlord’s consent will be required if it is intended to replace those guarantees.

If you have questions, comments, or concerns, please contact us at [email protected]If you're renting, there are many reasons why you might need to leave the property before the end of the lease.However, if personal guarantees have been provided, the landlord’s consent will be required if it is intended to replace those guarantees.

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Normally, if you assign a lease, the new tenant takes over your obligations under the lease from the date of the assignment, but you are not released from your obligations under the lease unless you are able to persuade your landlord to release you.

Although releases are not normally provided, there is no reason why you should not request a release.

Normally, the landlord cannot unreasonably withhold consent to an assignment, provided that the proposed new tenant is of sound financial standing and is willing to provide personal guarantees and/or a bank guarantee at least equivalent to any guarantees that you may have provided to your landlord.

With an assignment, the landlord will normally require you and the new tenant to enter into a deed with the landlord under which the new tenant agrees to take over your obligations under the lease, and you acknowledge that despite the assignment, you are not released from obligations under the lease.

Georgia law, however, distinguishes between these two types of leases.

The assignment of a Georgia usufruct lease, but not an estate-for-years lease, releases the assignor-tenant from liability to pay rent owed by the defaulting assignee-tenant unless the landlord expressly reserves the right to proceed against the assignor-tenant.Even so, it is helpful to understand the law behind assignment provisions and to be aware of the most common legal issues landlords sometimes face despite those protective provisions.The law of most states does not distinguish between usufruct leases, which confer mere use rights (usually shorter term leases) from estate-for years leases, which grant an interest in land (, a 99-year ground lease).An estate-for-years lease is less likely to include a provision allowing the landlord to reject a proposed assignment.Legal issues may arise because a tenant simply ignores (or cleverly avoids) the assignment language.The tenant holding only a usufruct interest (use right) under its lease has no such right of assignment absent language in its lease or an assignment document expressly allowing assignments.Almost always, the landlord who gives the usufruct tenant an assignment right reserves the landlord’s right to give its consent to any proposed assignment of a usufruct lease.Some leases contain provisions which require the landlord’s consent for a transfer of all or a majority of shares in the tenant company, as if the transfer was an assignment of the lease.If your lease does not contain these provisions, the consent of the landlord will not be required.Occasionally, a tenant holding only a use right under its lease will transfer possession of its leased premises to a successor tenant without seeking permission of the landlord required under the assignment provision in the lease.An unauthorized assignment may also occur where the tenant changes the legal entity under which it operates its business in the leased premises, which can take place through merger or stock transfer.

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