Should You Take On An Existing Commercial Property Lease Assignment?

As a commercial tenant you may be given the opportunity to take on an existing commercial property lease assignment. This is a significant decision to make as a business. It will have advantages and disadvantages that you need to consider.

This is why our commercial property law solicitors are here to help. We can take you through what you need to know to ensure you make an informed decision that meets the needs of you and your business.

So, why should you take on an existing commercial property lease assignment as a tenant?

One of the biggest advantages of having a lease assigned to you is the potential for lower costs. For example, the existing lease may have been negotiated at a time when market conditions were more favourable. This means that you may be able to get lower rate than rates currently available elsewhere. You will need to check that the existing lease does not contain specific rent review provisions, or this may not be possible.

You will also be able to avoid some upfront costs that can come with taking on a new lease. This includes high security deposits or initial rent premiums for example. You will also have the predictability and established nature of the lease terms. The terms are already laid out. This means there is no guess work, and you know exactly where you stand as a tenant.

It’s important to note that there are disadvantages when you take on an existing commercial property lease assignment too. For example, you may find that there is inflexibility within the pre-existing terms that can limit your business. You will also need to accept the terms within the lease as they are. Unlike a new commercial property lease where there is room for negotiation and reviews.

You will need to check the remaining lease term too. It may be shorter than your business needs. In turn, this can mean you need to renegotiate the lease or move premises sooner than originally planned for or hoped. It’s important to check your inherited liabilities and obligations too to ensure you meet them.

There may be problems or disputes that took place with the previous tenant and landlord. These may now fall under your responsibility. This could include financial obligations or legal liabilities for example.

Are you considering if you should take on an existing commercial property lease assignment for your business? Why not speak to our commercial property lease specialists. We can review the lease for you and ensure it is the right decision for you and your business.