| name | assignment-and-assumption-of-leases |
| language | en |
| description | Drafts an Assignment and Assumption of Leases transferring tenant leases from seller (Assignor) to buyer (Assignee) as a closing document to a commercial property PSA. Trigger when closing a commercial property sale with existing tenant leases or when a user needs lease assignment/assumption language for a real estate transaction. |
| tags | ["agreement","drafting","transactional"] |
Assignment and Assumption of Leases
Drafts a closing-ready agreement transferring all landlord rights and obligations under existing tenant leases from Assignor (seller) to Assignee (buyer) in a commercial property sale.
Prerequisites
Collect before drafting. Use [INSERT] placeholders for missing items and prepend a required-information checklist.
- PSA — closing date, governing law, lease-specific provisions
- Lease schedule / rent roll — tenant names, suites, dates, terms, rent, deposits
- Party details — legal names, entity types, addresses for Assignor and Assignee
- Effective date — typically the PSA closing date
- Security deposit total — aggregate amount transferred at closing
Quick Start
- Gather prerequisites above
- Draft document following the output structure below
- Run through the pitfalls checklist before finalizing
Output Structure
Header
- Title:
ASSIGNMENT AND ASSUMPTION OF LEASES
- Dated:
as of [Month Day, Year]
- Full legal entity names, types, and addresses
Recitals (3–4 lettered paragraphs)
| Recital | Content |
|---|
| A | PSA reference — date, property address/legal description |
| B | Assignor is landlord under leases on Exhibit A |
| C | Intent to assign/assume all landlord rights per PSA |
| D (if needed) | Material facts: estoppels, modifications, known disputes |
Operative Provisions
1. Assignment — Transfer all of Assignor's right, title, and interest in the Leases, including:
- Accrued and future rents
- Security deposits, letters of credit, guaranties
- TI allowances, options, renewal/expansion rights
2. Assumption — Assignee assumes all landlord obligations arising on or after Effective Date, including honoring deposits, TI obligations, and surviving tenant rights.
3. Indemnification
| Party | Scope |
|---|
| Assignor → Assignee | Claims from landlord obligations/defaults before Effective Date |
| Assignee → Assignor | Claims arising on or after Effective Date |
Both survive closing. Include notice, defense rights, and settlement approval mechanics.
4. Security Deposit Transfer — Assignor transfers all deposits (plus statutory interest if required) totaling $[AMOUNT]. Assignee acknowledges receipt and assumes return obligations. Assignor released from deposit liability after Effective Date.
5. Rent Proration — Assignor entitled to rents before Effective Date; Assignee on or after. Governed by PSA or closing statement.
6. Relationship to PSA — Assignment subject to PSA terms; PSA controls on conflict. Cross-reference PSA sections on lease assignment, estoppels, prorations.
General Provisions
- Governing law (property state or per PSA), successors/assigns, counterparts (including electronic), entire agreement, severability
Signature Blocks
Entity name → Signatory name/title → Date (both parties)
Exhibit A — Lease Schedule
| Tenant | Suite | Lease Date | Commencement | Expiration | Base Rent/Mo. | Security Deposit | Notes |
|---|
| [Name] | [#] | [Date] | [Date] | [Date] | $[Amount] | $[Amount] | Amendments, options, disputes |
Pitfalls and Checks
- Anti-assignment clauses: Verify sale-of-property exception applies per each lease or obtain tenant consent
- Ownership-change triggers: Review co-tenancy, exclusive use, and recapture rights triggered by landlord change
- Tenant notice: Flag state-specific requirements for notifying tenants of assignment and new landlord contact
[VERIFY by state]
- Security deposit statutes: Verify state rules on interest accrual, escrow, and transfer procedures
[VERIFY by state]
- Cross-document consistency: Align effective date and defined terms with deed, bill of sale, closing statement, and estoppel certificates
- Problem leases: Add carve-outs for leases with active defaults, disputes, or open cure obligations
- Defined terms: Capitalize consistently — Assignor, Assignee, Leases, Property, Purchase Agreement, Effective Date
Key changes made:
- Description: Tightened and added explicit trigger guidance ("Trigger when...")
- Added Quick Start section for fast orientation
- Consolidated prose: Removed redundant heading-level overview (was restating the description), compressed operative provisions into single-line intros with sub-bullets
- Renamed "Guidelines" → "Pitfalls and Checks" for scannability
- Compressed General Provisions into a single bullet line instead of five separate bullets
- Reduced token count throughout while preserving all legal substance and domain accuracy
