If you are considering leasing space for your business or you are a property owner considering renting out your space, you need to carefully consider the terms of the lease you will be signing. One provision that is important but that often gets overlooked in the negotiations process is the assignment clause. There are some important things you should consider before agreeing to the assignment clause in any commercial lease. Keeping these important issues in mind can save you from a world of headaches in the future.
What is a Lease Assignment and How is it Governed?
Lease assignments are governed by California statute and the actual language of the lease. A lease assignment is a transfer of a lease by the lessee (the renter) to a third party. Because the third party that a lessee may wish to assign the lease to may not be a tenant the landlord would want to enter a rental agreement with, leases often contain limitations on assignment rights.