Your client-landlord approaches you with a commercial lease and a dilemma: The tenant assigned its lease to a third party without the landlord’s knowledge or consent. What are the landlord’s rights?
You review the lease—with an emphasis on the “no assignment” provision—and note that like many commercial leases, the lease not only prohibits unauthorized assignments, but even defines “assignment” in various ways, e.g., as (i) the transfer of more than 50 percent of shares of the tenant where the tenant is a corporation,1 (ii) the transfer of a partnership interest in the tenant where the tenant is a partnership, (iii) the merger or consolidation of the tenant into or with any other entity, (iv) occupancy or possession by someone other than the tenant of record, (v) the sale of all or substantially all of the tenant’s assets, or (vi) the garden variety transfer of the lease to a third party pursuant to formal assignment documents.
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