A sublease, or sublet, is a contract between a pre-existing tenant and a new tenant. For example, tenant A may have a lease with landlord X, but A subleases the rented property to tenant B through a contract. Generally, the new tenant takes on all the rights and obligations of a normal tenant, but for a limited amount of time that is less than the total time remaining on the lease. The original tenant is still liable for all the obligations of the original lease until it runs out.
An assignment is very similar to a sublease, except the new tenant takes on the rights and obligations of the entire lease for the rest of the time remaining on the lease. In the case of an assignment, there is usually a contract between the new tenant and the original landlord, where one was lacking in a sublease. The original tenant is usually still liable for all the obligations of the original lease until it runs out.
In some instances, you can sue a commercial landlord if they refuse to allow a sublease or assignment to a commercial lease. In order to be successful in a lawsuit you will have to prove:
- A lease between you and a commercial landlord existed,
- The terms of the lease required the landlord not to unreasonably refuse a sublease or assignment,
- The landlord’s prior consent to a sublease or assignment is needed, and
- The landlord unreasonably refused to allow a sublease or assignment.
If you are successful in a lawsuit against a commercial landlord for refusing to allow a sublease or assignment, your remedy could be:
- Compensation for any economic losses.
- Specific performance, which is a court order allowing the sublease or assignment.
- A declaratory judgment, which is a court order outlining the rights of the commerical landlord and tenant.
A lawsuit against a commercial landlord for their refusal to allow a sublease or assignment can be defended in many ways. A few common examples of defenses include:
- The lease agreement did not require the landlord to be reasonable when refusing to allow a sublease or assignment.
- The refusal by the commercial landlord to allow a sublease or assignment was reasonable.
- The commercial landlord had insufficient information from the proposed new tenant about their ability to satisfy any lease obligations.
If you are trying to get another tenant into your space through a sublease or assignment, or you are trying to take over another person’s lease obligations through a sublease or assignment and a commercial landlord refuses to allow it, it is highly recommended that you contact a real estate attorney who specializes in commercial real estate law. Only they will be able to explain the issues involved with subleasing and assigning property.