(a) Pro Landlord – Landlords may simply want to terminate a lease if a tenant proposes an assignment or sublease. This makes sense to both the landlord and the tenant. The tenant who is already considering a physical handover of the premises may request the functional equivalent of the termination by assigning the lease or subletting the premises. Landlords faced with such a situation may prefer to find their own tenants rather than having to accept a subtenant on the premises. 1.1. In any event, a California tenant who wishes to sublet their unit must seek permission from their landlord (unless their city laws say otherwise). Tenants should always ensure that a landlord accepts a sublease, including the proposed subtenant and the duration of the sublease, to avoid future problems. Although it is not mandatory, it is still a good idea to get this permission in writing so that there is a registration of it. 1.1.
If the landlord`s consent is required to transfer or sublet the premises, identify the tenant`s termination obligations. – If a landlord`s consent is required before the tenant can transfer the tenant`s stake in the lease, an assignment and sublease clause generally requires the tenant to notify the landlord of any proposed transfer. What is sufficient for a correct termination depends on the type of lease and the rented premises. However, almost all termination provisions require the same basic information: when does the transfer take place? Who is the proposed purchaser? What are the material conditions and considerations of the proposed transfer? The landlord will need as much relevant information as possible to make an informed decision about whether or not to authorize the transfer. This makes sense given the ongoing issue contained in the assignment and sublease clauses to protect the landlord`s rental income. The landlord wants to be sure that a transfer does not leave the premises uninhabited or in any way violate the landlord`s interest in the premises. Leases between a landlord and a commercial tenant can also go further. Such leases may expressly prohibit the tenant from transferring the tenant`s interests to certain parties who have been bad tenants in the past (see notes below). While these are the four main functions of an assignment and sublease clause, commercial leases tend to be more complicated, as described below. 1.1. No consent required for subletting to the affiliate – One of the few cases where a landlord`s consent may not be required to transfer an interest in a lease is in the area of commercial leases. When a lease is negotiated between the landlord and a business unit, the tenant may want to avoid unnecessary delays and paperwork when the tenant transfers the lease to a business unit that they fully own.
The landlord doesn`t have to worry as much about receiving payment from the acquirer because the acquirer is (essentially) the original tenant. (a) the proposed tenant`s activity is not consistent with the image and character that the landlord wishes to promote for the immovable; 1.1. Hold the tenant liable under the lease, regardless of any transfer of interest….