assignment of lease

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Assignment of Lease

The transfer of a lease by the lessee to another party. For example, if one rents an apartment, one might sell or give one's friend the right to live there (and the obligation to make payments). The assignor (the original lessee) remains bound by the lease contract if the assignee fails to make his/her obligations, unless the lessor states otherwise. Because of the potential complications, some lessors do not allow lessees to engage in assignment of lease.

assignment of lease

Transferring all rights in a lease to real property to another.Leases typically contain prohibitions against assignment without landlord approval, but the approval may not be unreasonably withheld. Reasonable grounds may include a change in the creditworthiness of the tenant,an increase in the burden placed upon the property by the new tenant because of additional parking demands,or incompatibility with other tenants such as a liquor store coming into a small shopping center of family-oriented businesses.When a tenant assigns its lease, it remains liable for the entire lease term unless the landlord agrees to a novation, which is a declaration that the old lease is void and the landlord has entered into a direct relationship with the assignee.

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