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    5 Replies Latest reply on Mar 6, 2008 7:46 PM by LUCKIEST

    Assignment of business lease

    missionnf Newbie
      I am selling my business. The buyer will be the assignee, so I am "assigning the lease" to the new buyer. The assignment section and rider addendum for assignment in the lease DOES NOT say any where that the landlord can increase the rent, increase the cam or increase % rent increase per year which he is doing. I have lost a buyer and possibly a second. I thought the buyer gets the lease under the same terms. It does not say at the discretion of the landlord. I had that taken out!!! Please help and advise my rights.
      Thanks
        • Re: Assignment of business lease
          LUCKIEST Guide
          Welcome to this web site.
          How long have you been in business??
          Every business person should have an Accountant, A Lawyer and an Insurance Agent.
          Great time to ask your Lawyer.
          LUCKIEST
          • Re: Assignment of business lease
            Lighthouse24 Ranger

            In any lease agreements I've seen, lease assignment is with the consent of the landlord. The seller (you, in this case), is usually responsible for securing that consent, and the landlord (recognizing that he has leverage in the situation) will usually demand something in exchange for consent such as an increase in rent or a cash payment.

            Typically, sellers make their best efforts to obtain consent -- they may bear all of the cost of doing do, or may shift some of the burden to the buyer. For example the seller may agree to reimburse the buyer for rent increases up to a certain amount (the current market rate, for instance), but no more -- the buyer would agree to bear any cost above that. Another option might be for the seller to reduce the purchase price by a certain amount for each specified percentage in rent increase that the landlord demands.

            Bottom line, the situation you describe sounds normal to me -- it's normal for the landlord to demand more in exchange for consent, and normal for the buyer to back out of the deal if you're not bearing some of the burden to obtain consent. As far as your legal rights in this situation, that's a beyond my experience and expertise. That might not be exactly the answer you wanted, but I hope it helps. Good luck in moving this deal foward.
              • Re: Assignment of business lease
                missionnf Newbie

                Thank you for your information. But I still do not understand if it is not stated in the assignment section that increases can take place then I see it as assgining the current contract lease and all of its rights to the buyer and nothing more. I signed the contract as such so how can they change it? Any thoughts and many thanks for your input.
                  • Re: Assignment of business lease
                    Lighthouse24 Ranger

                    In my experience, the normal practice/assumption/expectation is that an increase will take place in the event of a lease assignment -- so I'd think the contract would have to specifically say that it could not, otherwise it can. Again, that's just based on my experiences -- by all means, consult with an attorney to resolve any questions or doubts.
                • Re: Assignment of business lease
                  LUCKIEST Guide
                  Lighthouse has GREAT answers, BUT you need a lawyer.