Legal Updates

Leasee of a commercial property can unilaterally leave the property if the landlord unduly refused an alternative tenant

January 1, 2020

A lessee announced that it would unilaterally return possession of the leased property to the lessor prior to the end of the rental period due to cessation of business activity.
The Court held that the lessee must pay the lessor the rent and expenses for the period the property was vacant. Under law, a tenant may not transfer to another the right to hold and use the leased property or its obligations under the lease agreement other than with the consent of the lessor. If the lessor did not agreed to the transaction for unreasonable reasons or has given its consent on unreasonable terms, only then may the lessee make the transaction without lessor consent. Here, the lessee did not contact the lessor, neither before leaving or even afterwards. The lessee did not bother to present the lessor with options for alternative tenants, except for a random call from a realtor who did not even show the property to others. Therefore, there was no unreasonable refusal and the lessee had in fact abandoned the leased property and is therefore is obligated to pay the lessor.