Subleases Masquerading As Assignments
July 29, 2009 by Robby Scott Hill · 1 Comment
The operative phrase is “entire interest” and whether or not this refers to the time left on the lease or the percent acreage. You can have a legal assignment of 100% of the acreage, but there must not be any time remaining on the lease term which will revert back to the assignor, otherwise what you’ve really got on your hands is a sublease of 100% of the parcel.
What is an assignment of a lease?
An assignment occurs when a tenant transfers away the entire remainder of his lease, in terms of duration.
Real property rights can be assigned just as any other contractual right. However, special duties and liabilities attach to transfers of lease interests. With an assignment, the assignor transfers the complete remainder of the lease term to the assignee. The assignor must not retain any sort of reversionary interest in the right to possess. If any portion of the original lease term is reserved by a tenant assignor, then the act is not an assignment, but instead is a sublease. Read more
