How to Assume or Take Over a Lease

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Assuming or taking over a lease can be a win-win situation for a business owner who has signed a long-term lease and is unable to fulfill their contractual obligations and a new business owner looking for a lease with advantageous terms. In many ways, the act of taking over a lease is much like signing a lease of your own, except that the original lessee assumes the ultimate responsibility for rent payments by guaranteeing them.

Negotiate with the original tenant regarding the details of your subletting arrangement. Agree on whether you will pay the entire rent or only a portion of it. Ask if they want you to to provide a security or rental deposit. Decide who will pay the lease transfer fee. Work out relevant details such as the date the property will change hands and whether the previous tenant can store any items on the premises. Put the terms of your subletting agreement in writing, make two copies and have both parties sign them.

Read More: How to Amend a Commercial Lease

Contact the property owner and tell him that you wish to sublet the property in question. Although preparing a subletting agreement between a landlord and subletter requires extra work on the part of the landlord, they usually agree to it because they collect an assignment fee, which can be as much as half a month's rent. Ask the landlord whether they are willing to extend a lease to you beyond the period covered by the original tenant's lease if you envision operating at the location for an extended period of time.

Read over the subletter's agreement that the landlord provides. Compare it with standard subletting agreements, note any differences and ask the landlord to clarify them if you are uncomfortable with them. Ask your lawyer to read over your subletter's agreement and assess whether it presents any cause for concern.


About the Author

Devra Gartenstein is an omnivore who has published several vegan cookbooks. She has owned and run small food businesses for 30 years.