There are many reasons why a business or an individual might need to find someone to take over a lease. If you rent an apartment, the once-in-a-lifetime job opportunity across the country might not allow you to wait until your lease expires to move. Or, as a business owner, the commercial space on which you signed a ten-year lease five years ago might not be sufficient to accommodate your growing business.
One method of getting out of a lease is to find someone willing to do a lease takeover with you. Before jumping into a lease takeover, there are three things you should understand about the process.
A lease takeover could leave you liable to your landlord
The assignment of a lease to another tenant might require the consent of your landlord. Some states have laws severely limiting the right of a landlord to refuse to consent to the assignment of a lease on residential property. Most states do not place the same restrictions on the owners of commercial properties, so you should check the laws in your state to find out what rules apply in your situation.
If you do not obtain your landlord’s consent to a lease takeover, you could remain legally obligated for the rent and other obligations under the lease if event the new tenant does not fulfill them. For example, if the tenant taking over your lease does not pay the rent, the owner of the property can sue you for it.
The reason for this is that the original lease was between you and your landlord. By not getting the landlord to agree to the lease takeover by the new tenant, you would continue to be liable under its terms.
A sublease is not a lease takeover
Finding a tenant to take over a portion of the property that you are leasing is referred to as a sublet. The new tenant signs a sublease agreement with you agreeing to pay you rent for the portion of the property being sublet. In effect, you become a landlord for the portion of the property specified in the sublease.
A sublease is not a lease assignment or lease takeover because you remain as a tenant for the portion of the property not affected by the sublease. As far as your landlord is concerned, you are responsible for paying rent on the property described in your lease. The sublease does not relieve you of your lease obligations to your landlord.
Put the lease takeover in writing
Entering into a lease takeover with someone without a written agreement signed by all parties, including the landlord, is dangerous. A written assignment of lease that clearly states the terms and conditions under which you are allowing someone to take over your lease is valuable as evidence in the event of a dispute between you and the new tenant or between you and your landlord.
Before agreeing to any lease takeover, you should consult with an attorney who practices in the area of leases and tenants’ rights. You can avoid costly mistakes by having the attorney review your lease assignment to make certain that it complies with local laws and protects you from liability.