Both landlords and tenants have substantial (but often competing) interests in assignment, subleasing, change of control, leasehold mortgaging (“assignment”) provisions in commercial leases. Most commercial leases require the landlord’s consent to an assignment. In the absence of express language to the contrary, the law requires landlords to act reasonably in granting or refusing consent to an assignment. Court decisions have emphasized the business experience, success and character of a proposed assignee as factors to be taken into account. The financial stability of a proposed assignee is an important factor for both landlords and tenants. In most cases, the original tenant’s obligations under the lease do not terminate on an assignment. Landlords generally want new tenants to carry on business in a manner consistent with other tenants of its building (usually in a “first class” manner) and to pay to the landlord all or, at the very least, a portion of any excess rent. There are many other requirements and considerations that will be discussed in future editions of Leasing Times. Your thoughts?
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Letting go – Part 1
- Miller Thomson LLP
- Charles Schwartz
- Canada
- May 5 2009
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Philip I. Weis
Senior Corporate Counsel
Pfizer