Assignment and Assumption of Lease Agreement
(Commercial Lease) (CA)

Summary

This assignment and assumption of lease agreement template transfers a tenant's interest under a commercial lease of California real property to a third-party. This template includes practical guidance, drafting notes, and alternate and optional clauses. This template assumes that the tenant is assigning all of its rights and obligations under a commercial lease for the remainder of the lease term. If the tenant/assignor desires to transfer less than all of its interest under the lease, a sublease as opposed to an assignment should be used. For a sublease template, see Sublease Agreement. Prior to assigning its lease, assignor should review the lease to determine if landlord consent is required. This template includes an optional consent of landlord and a release of tenant by landlord from further liability under the lease. California imposes documentary transfer tax on instruments that assign or transfer an interest in real property where the consideration is in excess of $100. See Cal. Rev. & Tax. Code § 11911. Certain California cities also impose an additional property transfer tax that varies by city. The Court of Appeals of California explained the circumstances under which a lease would be a taxable transaction in Thrifty Corp. v. Cty. of L.A., 258 Cal. Rptr. 585 (Ct. App. 1989), clarifying that documentary transfer tax is imposed on transfers of property leasehold interest where the term of lease is for 35 years or more (including all extension options and renewals for purposes of determining the term). For more information on assignment and assumption of lease agreements see Lease Assignments.