Commercial Lease Assignment: Handing Your Office Lease to Another Company
A commercial lease assignment transfers your whole lease to another company. The assignee becomes the tenant, pays the landlord directly and takes over the remaining term, the escalations and, where the lease allows, the options. It is different from a sublease, where your lease stays in place and you collect rent from a subtenant. In New York nearly every office lease requires the landlord's written consent to an assignment, and the original tenant usually remains on the hook if the assignee later defaults, unless the landlord signs a release. A New York real estate attorney should read the clause before you act.
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Ask about assigning my leaseUpdated 2026-10-03 · Nomad Group
Assignment against sublease, for a tenant that wants out
- Who is the tenant afterward. Assignment: the assignee. Sublease: still you.
- Who pays the landlord. Assignment: the assignee, directly. Sublease: you do, out of what the subtenant pays you.
- How much space moves. Assignment: the whole lease. Sublease: the full floor or a part of it.
- What you still owe. Assignment: usually the rent if the assignee fails, unless you were released. Sublease: the entire lease, every month.
An assignment is the cleaner break when the company is leaving for good. A sublease suits a company that may want the space back, or that only needs to shed part of a floor. The assignment and sublet clause decides which of the two your lease permits.
When the landlord can say no, or take the space back
Most leases open with a flat prohibition: no assignment without the landlord's prior written consent. What matters is the standard attached to that consent. If the clause says consent will not be unreasonably withheld, the landlord has to weigh the proposed tenant on its merits, and your attorney can tell you what counts as a reasonable ground for refusing. If the clause sets no standard, the decision is the landlord's alone.
Recapture is the second gate. It lets the landlord end the lease and take the space back in place of approving your deal, and on some forms merely asking for consent triggers it. Read how your clause is written before sending any request.
When the company is being acquired
A sale of the business can count as an assignment under the lease, which gives the landlord a say in the deal unless the clause was negotiated. The protection is a list of permitted transfers that need no consent: to an affiliate, to a successor by merger and to a buyer of the business.
Options matter too. Renewal and expansion rights are often personal to the tenant that first signed, so they vanish on an assignment unless the lease says they travel. Whether your transaction is a transfer under your lease is a question for your attorney, on the document itself.
The steps, from the clause to the landlord's consent
- Read the assignment clause, every amendment and the guaranty. Note the consent standard, any recapture right, any consent fee and whether options survive.
- Price the alternatives. Set an assignment beside a sublease and a negotiated surrender before choosing.
- Find the assignee. The landlord will review its financials as it would a new tenant's, so credit matters as much as price.
- Submit the consent package the lease calls for, in the manner its notice clause requires, and track any deadline the landlord has to answer.
- Sign the assignment and the landlord's consent together, and ask for a release of the company and the guarantor in the same papers.
How to get out of an office lease early sets this route beside the other five.
The full guide
This page is the short answer. The long one, with the numbers worked through, is here:
Related topics
- Tenant Exit Strategies: Six Ways Out of an Office Lease, Compared
- Commercial Lease Dispute Resolution: A Disagreement With Your Landlord, in Order
- Commercial Lease Guarantor: Who Signs an NYC Office Lease and What They Owe
- Personal Guarantee on a Commercial Lease: Do You Have to Sign One in NYC?
Am I off the hook once the lease is assigned?
Usually not automatically. Most New York lease forms keep the original tenant liable until the term ends, so if the assignee stops paying years later the landlord can turn to you. Landlords seldom grant a full release at the outset. A release that takes effect after a period of clean payment by a creditworthy assignee is a realistic request. Get whatever is agreed in writing.
Does the person who signed the guarantee get released on an assignment?
Only if the landlord agrees to it in writing. Negotiate the guarantor's release as part of the consent, once a creditworthy assignee has taken over. Good guy guarantee explains what the guarantor owes until then.
Will the landlord charge for consenting to an assignment?
It can. Some leases set a consent or review fee, and unnegotiated forms leave it uncapped. The usual cost of an assignment, though, is an inducement to the company taking over. Read the clause before you price the deal.
What does the company taking over the lease need to check?
The paper it inherits. The assignee steps into the existing lease as it stands, which can include unpaid arrears, an old expense base year and a duty to restore the space at the end. Lease takeover covers the incoming tenant's side.
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