Get Second Chance to Respond to Tenant’s Assignment or Sublease Request

“Is my landlord going to drag its feet if I try to assign or sublet the lease?” That’s a question that has kept many a tenant lying awake in bed at night. Rather than risk a delay that might ultimately cost them the assignment or sublease, these tenants may insist on requiring the landlord to say yes or no to the request within a specific time limit, like 30 days. They also want the lease to state that failure to respond within the specified time limit counts as a “yes.” And if the tenant has enough bargaining clout, you may have to accept its demands.

Regrettably, agreeing to this kind of silence-is-deemed-yes assignment/sublease provision can come back to bite you. Landlords are no less busy than tenants. They may also be inclined to forget that they have only a limited time to reject an assignment or sublease request. Even if the landlord is on the ball, an administrative slip-up may cause an otherwise timely response to be delayed. End result: You get stuck with an undesirable assignee or subtenant that you wouldn’t have approved.

Solution: Require Reminder Notice

The good news is that there’s a middle ground solution—one that will alleviate a tenant’s fears of delay without saddling you with the risk of “accepting” unacceptable assignments or subleases due to response delays. As our Model Lease Clause specifies, there are two things you need to do to avoid being trapped like this:

1. Give yourself enough time for initial response. Keep in mind that responding to an assignment or sublease request takes time. Among other things, you need to gather information about the proposed assignee/subtenant, its business, and its financials. So, while it’s understandable for tenants to set a decision deadline, you must ensure that that deadline gives you ample time to do your due diligence. Attorneys suggest asking for 30 days but also caution that this may be too long for many tenants. Be mindful that tenants that assign or sublease want or need to move fast, so be prepared to accept a shorter deadline that you can realistically manage, they advise [Clause, sec. 1].

2. Require tenant to provide reminder notice. If you don’t respond to the assignment or sublease request within the deadline, require the tenant to send you a reminder notice, rather than agreeing to treat the missed deadline as a “yes” to the deal. Specifically, the lease should require the tenant’s reminder notice to:

• Say that you haven’t responded to the tenant’s assignment or sublease request within the stated time;
• Provide you another copy of the proposed assignment or sublease request (in case you’ve misplaced the first copy, a not uncommon scenario);
• Give you more time—five days is reasonable, according to attorneys—to approve or reject the request; and
• Warn you that failure to respond within the above stated period will be treated as consent to the request [Clause, sec. 2].

Negotiating Strategy: Attorneys say that most tenants are willing to accept a clause like this to the extent that it amounts to only a small extension to the response deadline. However, if a desirable tenant with bargaining leverage won’t go along with the reminder notice arrangement, you should at least get it to agree to include bold face language in the assignment or sublease request reminding you that failure to respond to the request within the stated decision deadline will be deemed consent to the arrangement.