Assuming that the lease renewal, assignment and termination clauses are boilerplate clauses that do not need interpretation. An assignment is the lawful transfer of the lease by the lessee (the assignor) to another party (the assignee) willing to take over the lease. If a tenant enters into a lease, the assignee is bound by all the terms of the lease. The parties (landlords and new tenants) sometimes take the opportunity to negotiate changes in the rental agreement, such as for example. B renewal options and rent review. On the other hand, a subletting contract is concluded, under which the tenant transfers only part of his shares of inheritance law to a third party. The landlord retains a legal contract with the tenant, but does not have a legal relationship with the subtenant. As a general rule, a sublease represents a greater risk to the lessor than an assignment, due to the lack of control of the subtenant, including the agreement or the subtenant`s ability to pay rent. A building with multiple leases, which are expected to be more frequent when economic conditions decline, is a significant market risk. The landlord probably played no role in the pre-qualification of the sub-tenants. If tenants can`t pay the rent, the landlord still uses tenants – but they may have left the environment, which contributes to the collection costs.
A simple indication of the lack of rental documents is when you learn that the company that occupies the rented premises is different from the one that signed the lease – the red flags are rising! The belief that the lease consists of only one document. Many contracts and leases leave it to the parties to determine between themselves a future purchase price or rent as defined by the “fair market value” (FMV) of the time. The smart draftsman will often try to sneak into a language “as determined by the seller (or owner)”. But savvy buyers and tenants will not represent this unilateral determination. A more concrete method of determining the GMF should be added to the document in order to determine the future purchase price, option price or renewal rent. The FMV is then generally determined by an expertise. Sometimes it is the seller or lessor who will receive the first valuation, with the buyer/tenant having the right to challenge the initial appraiser by being able to obtain their own appraiser. If both opinions are not in conformity, the evaluators will choose a 3rd expert, whose evaluation would then be binding. This process can be time-taking and expensive.
In other cases, buyers and sellers or landlords and tenants agree in advance who will be the expert and pay together for the valuation before setting the purchase price, option price or rent….