[RPPTL LandTen] Outright prohibitionagainst commercial lease assignment or subletting
Haney, Gregory
ghaney at slk-law.com
Thu Apr 14 11:03:35 PDT 2011
Further to George's thoughts on this, I happen to be looking at a fairly
solid assignment provision right now that you may find useful. FYI, the
referenced Exhibit D relates to the tenant insurance requirements and
"SDN" refers to the Specially Designated National and Blocked Person
list per OFAC.
ARTICLE 9. ASSIGNMENT AND SUBLETTING
9.1. RIGHTS OF PARTIES.
(a) Except as otherwise specifically provided in this Article 9,
Tenant may not, either voluntarily or by operation of law, assign,
sublet, encumber, or otherwise transfer all or any part of Tenant's
interest in this Lease, or permit the Premises to be occupied by anyone
other than Tenant (each, a "Transfer"), without Landlord's prior written
consent, which consent shall not unreasonably be withheld in accordance
with the provisions of Section 9.1(b). For purposes of this Lease,
references to any subletting, sublease or variation thereof shall be
deemed to apply not only to a sublease effected directly by Tenant, but
also to a sub-subletting or an assignment of subtenancy by a subtenant
at any level. Except as otherwise specifically provided in this Article
9, no Transfer (whether voluntary, involuntary or by operation of law)
shall be valid or effective without Landlord's prior written consent
and, at Landlord's election, such a Transfer shall constitute a material
default of this Lease. Landlord shall not be deemed to have given its
consent to any Transfer by any other course of action, including its
acceptance of any name for listing in the Building directory.
(b) Except as otherwise specifically provided in this Article 9,
if Tenant or any subtenant hereunder desires to transfer an interest in
this Lease, Tenant shall first notify Landlord in writing and shall
request Landlord's consent thereto. Tenant shall also submit to
Landlord in writing: (i) the name and address of the proposed
transferee; (ii) the nature of any proposed subtenant's or assignee's
business to be carried on in the Premises; (iii) the terms and
provisions of any proposed sublease or assignment (including without
limitation the rent and other economic provisions, term, improvement
obligations and commencement date); (iv) evidence that the proposed
assignee or subtenant will comply with the requirements of Exhibit D to
this Lease; and (v) any other information requested by Landlord and
reasonably related to the Transfer. Landlord shall not unreasonably
withhold its consent, provided: (1) the use of the Premises will be
consistent with the provisions of this Lease and with Landlord's
commitment to other tenants of the Building and Project; (2) any
proposed subtenant or assignee demonstrates that it is financially
responsible by submission to Landlord of all reasonable information as
Landlord may request concerning the proposed subtenant or assignee,
including, but not limited to, a balance sheet of the proposed subtenant
or assignee as of a date within 90 days of the request for Landlord's
consent and statements of income or profit and loss of the proposed
subtenant or assignee for the two-year period preceding the request for
Landlord's consent; (3) the proposed assignee or subtenant is neither an
existing tenant or occupant of the Building or Project nor a prospective
tenant with whom Landlord or Landlord's affiliate has been actively
negotiating to become a tenant at the Building or Project; and (4) the
proposed transferee is not an SDN (as defined below) and will not impose
additional burdens or security risks on Landlord. If Landlord consents
to the proposed Transfer, then the Transfer may be effected within 90
days after the date of the consent upon the terms described in the
information furnished to Landlord; provided that any material change in
the terms shall be subject to Landlord's consent as set forth in this
Section 9.1(b). Landlord shall approve or disapprove any requested
Transfer within 10 business days following receipt of Tenant's written
notice and the information set forth above. Except in connection with a
Permitted Transfer (as defined below), if Landlord approves the Transfer
Tenant shall pay a transfer fee of $500 to Landlord concurrently with
Tenant's execution of a Transfer consent prepared by Landlord.
(c) Notwithstanding the provisions of Subsection (b) above, and
except in connection with a "Permitted Transfer" (as defined below), in
lieu of consenting to a proposed assignment or subletting, Landlord may
elect to terminate this Lease in its entirety in the event of an
assignment, or terminate this Lease as to the portion of the Premises
proposed to be subleased with a proportionate abatement in the rent
payable under this Lease, such termination to be effective on the date
that the proposed sublease or assignment would have commenced. Landlord
may thereafter, at its option, assign or re-let any space so recaptured
to any third party, including without limitation the proposed transferee
identified by Tenant.
(d) Should any Transfer occur, Tenant shall, except in connection
with a Permitted Transfer, promptly pay or cause to be paid to Landlord,
as additional rent, 50% of any amounts paid by the assignee or
subtenant, however described and whether funded during or after the
Lease Term, to the extent such amounts are in excess of the sum of (i)
the scheduled Basic Rent payable by Tenant hereunder (or, in the event
of a subletting of only a portion of the Premises, the Basic Rent
allocable to such portion as reasonably determined by Landlord) and (ii)
the direct out-of-pocket costs, as evidenced by third party invoices
provided to Landlord, incurred by Tenant to effect the Transfer, which
costs shall be amortized over the remaining Term of this Lease or, if
shorter, over the term of the sublease.
(e) The sale of all or substantially all of the assets of Tenant
(other than bulk sales in the ordinary course of business), the merger
or consolidation of Tenant, the sale of Tenant's capital stock, or any
other direct or indirect change of control of Tenant, including, without
limitation, change of control of Tenant's parent company or a merger by
Tenant or its parent company, shall be deemed a Transfer within the
meaning and provisions of this Article. Notwithstanding any other
provision of this Article 9, Tenant may assign this Lease to a successor
to Tenant by merger, consolidation or the purchase of substantially all
of Tenant's assets, or assign this Lease or sublet all or a portion of
the Premises to an Affiliate (defined below), without the consent of
Landlord but subject to the provisions of Section 9.2, provided that all
of the following conditions are satisfied (a "Permitted Transfer"): (i)
Tenant is not then in Default hereunder; (ii) Tenant gives Landlord
written notice at least 10 business days before such Permitted Transfer;
and (iii) the successor entity resulting from any merger or
consolidation of Tenant or the sale of all or substantially all of the
assets of Tenant, has a net worth (computed in accordance with generally
accepted accounting principles, except that intangible assets such as
goodwill, patents, copyrights, and trademarks shall be excluded in the
calculation ("Net Worth")) at the time of the Permitted Transfer that is
at least equal to the Net Worth of Tenant immediately before the
Permitted Transfer. Tenant's notice to Landlord shall include
reasonable information and documentation evidencing the Permitted
Transfer and showing that each of the above conditions has been
satisfied. If requested by Landlord, Tenant's successor shall sign and
deliver to Landlord a commercially reasonable form of assumption
agreement. "Affiliate" shall mean an entity controlled by, controlling
or under common control with Tenant.
9.2. EFFECT OF TRANSFER. No subletting or assignment, even with the
consent of Landlord, shall relieve Tenant, or any successor-in-interest
to Tenant hereunder, of its obligation to pay rent and to perform all
its other obligations under this Lease. Moreover, Tenant shall
indemnify and hold Landlord harmless, as provided in Section 10.3, for
any act or omission by an assignee or subtenant. Each assignee, other
than Landlord, shall be deemed to assume all obligations of Tenant under
this Lease and shall be liable jointly and severally with Tenant for the
payment of all rent, and for the due performance of all of Tenant's
obligations, under this Lease. Such joint and several liability shall
not be discharged or impaired by any subsequent modification or
extension of this Lease. No transfer shall be binding on Landlord
unless any document memorializing the transfer is delivered to Landlord,
both the assignee/subtenant and Tenant deliver to Landlord an executed
consent to transfer instrument prepared by Landlord and consistent with
the requirements of this Article, and the assignee/subtenant
independently complies with all of the insurance requirements of Tenant
as set forth in Exhibit D and evidence thereof is delivered to Landlord.
The acceptance by Landlord of any payment due under this Lease from any
other person shall not be deemed to be a waiver by Landlord of any
provision of this Lease or to be a consent to any transfer. Consent by
Landlord to one or more transfers shall not operate as a waiver or
estoppel to the future enforcement by Landlord of its rights under this
Lease. In addition to the foregoing, no change in the status of Tenant
or any party jointly and severally liable with Tenant as aforesaid
(e.g., by conversion to a limited liability company or partnership)
shall serve to abrogate the liability of any person or entity for the
obligations of Tenant, including any obligations that may be incurred by
Tenant after the status change by exercise of a pre-existing right in
this Lease.
9.3. SUBLEASE REQUIREMENTS. Any sublease, license, concession or
other occupancy agreement entered into by Tenant shall be subordinate
and subject to the provisions of this Lease, and if this Lease is
terminated during the term of any such agreement, Landlord shall have
the right to: (i) treat such agreement as cancelled and repossess the
subject space by any lawful means, or (ii) require that such transferee
attorn to and recognize Landlord as its landlord (or licensor, as
applicable) under such agreement. Landlord shall not, by reason of such
attornment or the collection of sublease rentals, be deemed liable to
the subtenant for the performance of any of Tenant's obligations under
the sublease. If Tenant is in Default (hereinafter defined), Landlord is
irrevocably authorized to direct any transferee under any such agreement
to make all payments under such agreement directly to Landlord (which
Landlord shall apply towards Tenant's obligations under this Lease)
until such Default is cured. Tenant hereby irrevocably authorizes and
directs any transferee, upon receipt of a written notice from Landlord
stating that a Default exists in the performance of Tenant's obligations
under this Lease, to pay to Landlord all sums then and thereafter due
under the sublease. No collection or acceptance of rent by Landlord
from any transferee shall be deemed a waiver of any provision of Article
9 of this Lease, an approval of any transferee, or a release of Tenant
from any obligation under this Lease, whenever accruing. In no event
shall Landlord's enforcement of any provision of this Lease against any
transferee be deemed a waiver of Landlord's right to enforce any term of
this Lease against Tenant or any other person.
Gregory R. Haney
Attorney at Law
Shumaker, Loop & Kendrick, LLP
Bank of America Plaza
101 East Kennedy Boulevard
Suite 2800
Tampa, FL 33602
813.229.7600
813.227.2277 direct
813.229.1660 fax
ghaney at slk-law.com
http://www.slk-law.com/
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From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of George
Pincus
Sent: Thursday, April 14, 2011 1:21 PM
To: 'RPPTL Landlord Tenant Committee'
Subject: Re: [RPPTL LandTen] Outright prohibitionagainst commercial
lease assignment or subletting
I am wondering why would the Landlord even want to risk it? Are you not
better putting in a set of criteria (financial creditworthiness,
compatible use, not in negotiations for other space in the building, the
typical stuff) for what is a reasonable basis for Landlord to reject a
proposed assignment? That works. An absolute prohibition on
assignment, without a clear answer, seems a less than smart risk to take
on, under these circumstances.
Is there a compelling economic or risk allocation reason for prohibiting
assignment?
George A. Pincus, Esq.
Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A.
New River Center, Suite 2100
200 East Las Olas Boulevard
Ft. Lauderdale, FL 33301
Telephone: 954-766-9705
Facsimile: 954-766-9719
E-mail: gpincus at stearnsweaver.com <mailto:gpincus at swmwas.com>
www.stearnsweaver.com <http://www.stearnsweaver.com/>
From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of David
Weisman
Sent: Thursday, April 14, 2011 12:34 PM
To: RPPTL Landlord Tenant Committee
Subject: Re: [RPPTL LandTen] Outright prohibition against commercial
lease assignment or subletting
any criteria she desires=sole and absolute discretion, at least in my
mind.
David Weisman
Board Certified Real Estate Lawyer
Greenspoon Marder, P.A.
Trade Center South, Suite 700
100 West Cypress Creek Road
Ft. Lauderdale, FL 33309
Phone 954-491-1120
Toll Free 888-491-1120
Direct Phone 954-343-6941
Direct Fax 954-343-6942
From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Jeffrey
Mazor
Sent: Thursday, April 14, 2011 12:27 PM
To: 'RPPTL Landlord Tenant Committee'
Subject: Re: [RPPTL LandTen] Outright prohibition against commercial
lease assignment or subletting
David.
I wonder if "absolute or sole discretion would be sufficient to avoid
the good faith requirements of Fernandez v. Vazquez, attached.
Maybe better, an outright prohibition or explicitly say that the
Landlord may apply any criteria she desires.
Jeffrey R. Mazor, Esq.
J. R. Mazor & Associates, P.A.
Presidential Circle Building
4000 Hollywood Blvd., Suite 265-s
Hollywood, FL 33021
Phone: 954-962-3500
Fax: 954-962-3560
Email: Jmazor at Mazor.com
From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of David
Weisman
Sent: Thursday, April 14, 2011 12:11 PM
To: RPPTL Landlord Tenant Committee
Subject: Re: [RPPTL LandTen] Outright prohibition against commercial
lease assignment or subletting
If the parties freely contract for the Landlord to have absolute or sole
discretion, or if there is a blanket prohibition on assignment which the
Tenant consents to at the outset of the Lease, there is no way for a
Tenant to complain about what it agreed to.
David Weisman
Board Certified Real Estate Lawyer
Greenspoon Marder, P.A.
Trade Center South, Suite 700
100 West Cypress Creek Road
Ft. Lauderdale, FL 33309
Phone 954-491-1120
Toll Free 888-491-1120
Direct Phone 954-343-6941
Direct Fax 954-343-6942
From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Jeffrey
Mazor
Sent: Thursday, April 14, 2011 11:50 AM
To: 'RPPTL Landlord Tenant Committee'
Subject: [RPPTL LandTen] Outright prohibition against commercial lease
assignment or subletting
HI:
I am quite familiar with the law that applies and the requirements for
good faith dealing when a commercial lease allows for assignment, but
only with:
a. the landlord's consent , or
b. The landlord's consent, which shall not be unreasonably
withheld.
I believe that a lease can prohibit assignment as well, but does anyone
have a source for that proposition?
Jeffrey R. Mazor, Esq.
J. R. Mazor & Associates, P.A.
Presidential Circle Building
4000 Hollywood Blvd., Suite 265-s
Hollywood, FL 33021
Phone: 954-962-3500
Fax: 954-962-3560
Email: JMazor at Mazor.com
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