Legal Updates

A lessee is entitled to compensation for loss of profit as a result of the inability to assign the lease agreement to another

July 18, 2018
Print

A lessee who was unable to sell a business because the lessor refused to enable assignment of the lease to an alternative lessee was forced to close the business when he realized that the lessor would not cooperate with him in assignment of the lease to another.

The Court held that a lessee may not transfer to another the right to hold and use the leased property or sub-lease it, unless the lessor agreed, but if the lessor refused to enable the assignment for unreasonable grounds or set unreasonable conditions to the assignment, the lessee of  the real estate may do the transaction without the lessor's permission. Here the lessor raised difficulties without any justified reason even when potential purchasers for the business were found and was thus ordered to compensate the lessee for the damage caused.