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Tenant under a Commercial Tenancy

Question – I am a tenant under a commercial tenancy and what I want to know is, how would I go about assigning a tenancy?

Answer – without the professionals here at Shergroup Legal actually reviewing your documentation we are having to make a number of assumptions because of (a) whether or not a tenancy can be assigned; and (b) the terms upon which that assignment can take place; are completely dependent upon the lease documentation, so if you do want specific advice we suggest you give a professional at Shergroup Legal a call and seek their assistance.

That being said, we can give you some pointers based on the usual standard commercial lease. The majority of commercial leases will allow a tenant to assign the lease but usually only in certain circumstances. Some, very pro-tenant leases, will allow the tenant to assign the lease without any form of restriction on the assignment. The majority of leases however will require the tenant to obtain the landlord’s consent to the assignment. Usually, this consent is subject to some form of the condition.  Typically conditions for the assignment include:

  1. The new tenant is of sufficient financial standing to comply with the lease terms;
  2. The existing tenant has complied with all lease terms to date;
  3. The rent is paid up to date;
  4. The existing tenant enters into an Authorised Guarantee Agreement effectively guaranteeing the performance of the lease by the incoming tenant;
  5. A deposit, or increased deposit, is paid by the new tenant.

This is not an exhaustive list of conditions as we have seen many weird and wonderful restrictions placed on assignments so if you are considering assigning your lease we would suggest that your first step is to check with the professionals at Shergroup Legal as to what your rights regarding assignment are!   We can not only tell you what your rights are but we can advise you on how to exercise them and, if necessary, help you exercise them!  Wow, we are helping!

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Last updated | 19 July 2023

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