Defaults Under Commercial Leases: Fill & Download for Free

Your actual legal position on the matter will have been laid out in your tenancy lease agreement with the landlord.Nearly all commercial leases in England and Wales will have a clause barring subletting, and this is generally the default in English commercial leases.If (and only if) the relevant contract clause has the words along the lines of “unless with the consent or permission” from the landlord, then that’s an avenue for you to negotiate an additional alternative arrangement under the framework of the main lease with the landlord.If those words (or the effect of those words) are absent in the contract, then your matter is solved right there — you are technically in law absolutely barred from subletting. Having said that, it’s not The End. You can still broach the subject of subletting with the landlord. Considering the present situation after the Brexit vote, you’ll never know the landlord’s sentiments unless you ask and negotiate.If the negotiation succeeds, then the additional alternative arrangement (the subletting) will be appended to the main lease contract. And most likely this will incur you paying an additional rent amount from that point onwards.If you just go ahead and sublet without the landlord’s consent, you will be held liable (certainly in civil law, and possibly also in criminal law) for breach of contract. The landlord will then be able to sue you for damages.

The number of defaults would skyrocket, which would create a negative reinforcement loop wherein increasing defaults would overwhelm foreclosure operations, which would lengthen the time after default, before foreclosure, effectively giving many more people free housing.This would undermine the social contract of mortgage holders, prompting more defaults, which would force large banks (and probably many small banks) to close.This would destroy trillions of dollars of nominal value for individual households, which would cause widespread displeasure with government, and put most incumbents at risk of not being reelected.Additionally, the drag on residential housing would spill into commercial real estate, making it cheaper for new businesses to lease inexpensive space, but much more expensive for existing businesses to maintain their outdated leases. We would see widespread default in the commercial leasing industry, as businesses renegotiated with property holders.This would dramatically increase the rate of creative destruction in the economy, and put individual citizens through a huge amount stress as they tried to adjust to a new reality. That would lead to increased drug and alcohol abuse and destabilize individual households.I am not very excited about corporate welfare, but large institutions are important for consistency within an economy, and predictability and stability in an economic system is more valuable to society as a whole than you feeling like someone else got what they deserved.

In my base lease it’s in the peaceful enjoyment section for sale “It is understood and agreed that this covenant and any and all other covenants of Landlord contained in this Lease shall be binding upon Landlord and its successor and assigns.”And in the subrogation section there is similar language that covers it in case of landlord default to it’s lenders(i.e. protects the lease if the building is repossessed by the bank)“Tenant agrees that this Lease is and shall be subordinate to any mortgage or deed of trust which may now or hereafter encumber the Building or the Land, and to all renewals, modifications, consolidations, replacements and extensions thereof, provided, however, that the holder of any such mortgage or deed of trust shall agree that Tenant shall not be disturbed in its possession of the premises or its rights here under terminated or amended by the mortgagee, any purchaser at or in lieu of foreclosure or any party so long as Tenant is not in default under this Lease”The bank agrees to this when they approve the lease form as part of the loan documents.Good question though and an issue to check when signing a lease because it is possible it’s not in there. By common law it probably is inferred in a sale but that’s a longer lawsuit than having it actually in the contract.