Reasonable ?'s to ask transferee of commercial lease

[m34me]

Hi,

A ? for the commercial property gurus. What would you consider to be reasonable questions that you can ask about the financial situation of the transferee of a commercial lease.

Situation: Ongoing business being sold, transferal of lease applied for by current leasee, Very little financial information supplied by leasee re the party that the lease will be transferred too.

What questions would you ask? What would be considered as asking too much? (Considering that the transferee having an inferior financial position to the current leasee is grounds for withholding the transfer of the lease)

Thanks for your assistance
m34me

 

[JoannaK]

I have recently been through this situation and i asked for the following:

* Assets and Liabilities statement
* Previous relevant trade experience
* Previous tenancy references
* Bank guarantee
* Trade references

I basically refused to sign any Lease Transfer until I got everything I asked for and was satisfied with the information and subsequent checking.

If the incoming tenant has an inferior financial position to the incumbent, I definately would be thinking twice about allowing the transfer to happen.

Hope this helps

 

[RightValue]

Joanna,

Good questions to ask.

Just remember that generally included in most commercial leases is a clause on transfering the lease and it usually states that permission to transfer cannot be unreasonably witheld.

Another point to remember is that if the new tenant (as a result of the transfer) defaults, then the former tenant (who transfered the lease) is still generally liable for performance of the lease, ie is still liable to pay the rent!!!

cheers,
RightValue