Assigning A Commercial Lease: What Assignors, Assignees And Landlords Should Know

A commercial lease assignment involves a transfer of a commercial tenant's (the "Assignor") rights and obligations to a new tenant (the "Assignee"), where the Assignee agrees to assume the Assignor's rights and obligations under the original lease with the landlord. The parties to an assignment of lease must ensure compliance with the terms in both the assignment of lease agreement and the original lease.

There are many reasons for entering into a lease assignment. Assignors may be selling their business, restructuring or looking to exit their current lease prior to its expiry. Assignees may prefer the particular location and existing lease terms, while landlords may allow an assignment of the lease (provided certain conditions are met) to ensure a steady stream of rent if the current tenant is having financial troubles.