REALWorld Law

Commercial leases

Transferring the lease

In what ways, if at all, can a lessee transfer its rights to a third party and what restrictions can be imposed on such transfers?

United States

United States

A lease can prohibit the tenant from assigning its leasehold interest in the lease for the remainder of its term, subleasing all or a portion of the leased premises, mortgaging its leasehold interest or otherwise granting to a third-party rights in the leased premises. Even if not absolutely prohibited, the tenant’s ability to assign or sublet will usually be conditional upon obtaining the landlord’s prior consent in most cases. If the lease is silent as to whether transfers are prohibited, the law of most states will allow the tenant to transfer its lease.