How I Help: Building Flexibility into Your Lease
In a commercial lease, a tenant could make two types of transfers: sublease or assignment. A sublease is a transfer of less than the whole lease, and an assignment is a transfer of the whole lease.
My client Jarod owns a strip mall, and he knows that most small tenants overlook these provisions as boilerplate. They are missing out on having flexibility in the future, especially with longer leases.
But when an anchor tenant asked for the right to sublease and assign, he could not just say no.
We worked together to revise the lease to allow a one-time sublease while protecting Jarod’s interests – among the changes we made was to require his approval of any future occupants to preserve a good tenant mix and ensure their creditworthiness.
When I represent the tenant, I always try to negotiate a right to sublease and/or assign the lease. Having that flexibility in the future may take some additional time and effort up front, but could end up being priceless for the tenant later on.
If you’ve just found a great new office or retail space, take a closer look at the boilerplate.
How sure are you where you will want to be a year from now? That boilerplate just may save you later.