In most commercial leases there is a provision which contains a provision which deals in what circumstance a Calgary commercial tenant can assign or sublease their premises to another party.
In most instances, the landlord will assume control of these provisions for obvious reasons. Most leases set out specific requirements or information that must be presented to them before they will consider a lease assignment.
This information may include information such as specific prohibitions, and the business history of the new tenant being considered, financial information and generally entails a time period in which this may occur.
Almost all assignment lease provisions also allow the landlord to terminate the lease when granting a consent so they can retain control the leased space.
The law generally requires that a landlord must be reasonable should they choose to withhold their consent.
Their right to refuse consent could occur where the proposed use causes excess demand of the premises, cause excessive traffic and parking problems, and might negatively affect other businesses in the building.
However, a court might rule that the landlord was being unreasonable such as if it can be shown that they ulterior motives, or were trying to add new terms to the lease, or simply failed to respond to the request to initiate an assignment.
Most commercial leases generally has some type of 3 party agreement form created for the landlord, the current tenant and the new subtenant. Such provisions generally require that the existing tenant will continue to be liable for all lease obligations.
This can be potentially detrimental for the current tenant because it assumes all the responsibilities of the assignee, but has no rights.
As such, this is another reason why all commercial lease agreements should be reviewed by a lawyer who specializes in this area and should be carefully scrutinized before a lease is signed.
