Im currently in a lease, im a guarantor, but have sold my half of the business to my father. The lease stipulates that should the lease be surrendered and someone else takes it up a new lease will be written up, and the landlord must agree that the new lessee is suitable as far as business experience.
Now one would assume this would be simple right? simply go to the landlord and ask, but what if they contest it? Im in Australia by the way.
Please quote sources so I know im not being mis-informed, unless ofcourse you’re familiar with this kind of thing, then just quote your experience in the real estate or law business.
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One Comment
Firstly, I am in the US, so laws and business customs differ somewhat.
However, what you describe is actually quite common. The down side is that you probably should have approached the landlord before finalizing the sale of your portion of the business to your father. That being said… you should contact the landlord and request an assignment of the lease and your obligation as a guarantor. Assuming that (1) your father is at least as financially stable as you and that (2) all of the parties on your side of the transaction agree to the assignment, it should be pretty easy.
See if the landlord has a form of assignment they will require you to use. When you review their form, check to be sure that you would be released from your obligations after the assignment.
Typically (here) the tenant is required to pay the landlord’s reasonable legal fees related to the assignment, but unless it is a complicated assignment, those fees are typically just a few hours of attorney time (less than $1,000US).
Now for the down side – if the landlord does not accept the proposed assignees, your lease document probably does not give you a way off of the lease without causing a default.
Hope this helps…