Jay Gitles Published in REBusinessOnline.com
“Consent to an Assignment and Assumption of Lease—The Landlord's Perspective"

Jay Gitles’ article, “Consent to an Assignment and Assumption of Lease—The Landlord's Perspective," was published in the June 9, 2010 issue of REBusinessOnline.com. In his article, Jay discusses what commercial real estate landlords should do if their tenant sells its business to a third party, has assigned the lease to them, and then requests to countersign and return a letter acknowledging consent of the assignment of the lease to a third party.

As the first step, he suggests, “Evaluate the lease to determine the landlord’s and tenant’s rights and obligations concerning an assignment of the lease by the tenant.” Jay then notes that the landlord should verify whether any third parties have rights with respect to consenting to a prospective assignment of a lease and make sure to comply with such requirements, if any. He points out that, “Occasionally, mortgage loan-related documents or certain easements, covenants, conditions or development agreements burdening the subject property will limit rights to assign leases and/or provide to the mortgage holder consent to assignment rights in certain circumstances.” He concludes, “Assuming the landlord has reviewed and approved the financial reports and other relevant information concerning the proposed assignee and is not planning to exercise any termination or recapture right, under most circumstances, the landlord will be well served to modify the assignor’s/assignee’s form of Assignment and Assumption of Lease.”

He concludes, “Assuming the landlord has reviewed and approved the financial reports and other relevant information concerning the proposed assignee and is not planning to exercise any termination or recapture right, under most circumstances, the landlord will be well served to modify the assignor’s/assignee’s form of Assignment and Assumption of Lease.”