What are my commercial tenant 's responsibilities after assigning her lease?


I am the owner and lessor of an industrial property. I had a fine tenant, A, who did so well she sold her business and assigned the lease to B. Unfortunately, B isn't prospering and I'm worried that B won't be able to pay the rent. Does A still have some responsibility to pay?


Your question is often encountered but just as often not understood. Here's the rule: An assignment does not erase the original tenant's responsibility for paying the rent when the successor fails to do so. In a sense, the original tenant becomes a rent guarantor. Tenants who understand this rule and wish to assign their lease often ask landlords to explicitly relieve them from this responsibility, by including language in the lease assignment that absolves the original tenant from liability for the rent. But unless the old tenant and the landlord have made this deal, the original tenant remains on the hook.

To learn more, see Nolo's section on Business Spaces & Commercial Leases.

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