Assignment and Assumption of Leases
Drafts a closing-ready agreement transferring all landlord rights and obligations under existing tenant leases from Assignor (seller) to Assignee (buyer) in a commercial property sale.
Prerequisites
Collect before drafting. Use [INSERT] placeholders for missing items and prepend a required-information checklist.
- PSA — closing date, governing law, lease-specific provisions
- Lease schedule / rent roll — tenant names, suites, dates, terms, rent, deposits
- Party details — legal names, entity types, addresses for Assignor and Assignee
- Effective date — typically the PSA closing date
- Security deposit total — aggregate amount transferred at closing
Quick Start
- Gather prerequisites above
- Draft document following the output structure below
- Run through the pitfalls checklist before finalizing
Output Structure
Header
- Title:
ASSIGNMENT AND ASSUMPTION OF LEASES
- Dated:
as of [Month Day, Year]
- Full legal entity names, types, and addresses
Recitals (3–4 lettered paragraphs)
| Recital |
Content |
| A |
PSA reference — date, property address/legal description |
| B |
Assignor is landlord under leases on Exhibit A |
| C |
Intent to assign/assume all landlord rights per PSA |
| D (if needed) |
Material facts: estoppels, modifications, known disputes |
Operative Provisions
1. Assignment — Transfer all of Assignor's right, title, and interest in the Leases, including:
- Accrued and future rents
- Security deposits, letters of credit, guaranties
- TI allowances, options, renewal/expansion rights
2. Assumption — Assignee assumes all landlord obligations arising on or after Effective Date, including honoring deposits, TI obligations, and surviving tenant rights.
3. Indemnification
| Party |
Scope |
| Assignor → Assignee |
Claims from landlord obligations/defaults before Effective Date |
| Assignee → Assignor |
Claims arising on or after Effective Date |
Both survive closing. Include notice, defense rights, and settlement approval mechanics.
4. Security Deposit Transfer — Assignor transfers all deposits (plus statutory interest if required) totaling $[AMOUNT]. Assignee acknowledges receipt and assumes return obligations. Assignor released from deposit liability after Effective Date.
5. Rent Proration — Assignor entitled to rents before Effective Date; Assignee on or after. Governed by PSA or closing statement.
6. Relationship to PSA — Assignment subject to PSA terms; PSA controls on conflict. Cross-reference PSA sections on lease assignment, estoppels, prorations.
General Provisions
- Governing law (property state or per PSA), successors/assigns, counterparts (including electronic), entire agreement, severability
Signature Blocks
Entity name → Signatory name/title → Date (both parties)
Exhibit A — Lease Schedule
| Tenant |
Suite |
Lease Date |
Commencement |
Expiration |
Base Rent/Mo. |
Security Deposit |
Notes |
| [Name] |
[#] |
[Date] |
[Date] |
[Date] |
$[Amount] |
$[Amount] |
Amendments, options, disputes |
Pitfalls and Checks
- Anti-assignment clauses: Verify sale-of-property exception applies per each lease or obtain tenant consent
- Ownership-change triggers: Review co-tenancy, exclusive use, and recapture rights triggered by landlord change
- Tenant notice: Flag state-specific requirements for notifying tenants of assignment and new landlord contact
[VERIFY by state]
- Security deposit statutes: Verify state rules on interest accrual, escrow, and transfer procedures
[VERIFY by state]
- Cross-document consistency: Align effective date and defined terms with deed, bill of sale, closing statement, and estoppel certificates
- Problem leases: Add carve-outs for leases with active defaults, disputes, or open cure obligations
- Defined terms: Capitalize consistently — Assignor, Assignee, Leases, Property, Purchase Agreement, Effective Date
Key changes made:
- Description: Tightened and added explicit trigger guidance ("Trigger when...")
- Added Quick Start section for fast orientation
- Consolidated prose: Removed redundant heading-level overview (was restating the description), compressed operative provisions into single-line intros with sub-bullets
- Renamed "Guidelines" → "Pitfalls and Checks" for scannability
- Compressed General Provisions into a single bullet line instead of five separate bullets
- Reduced token count throughout while preserving all legal substance and domain accuracy
1---2name: assignment-and-assumption-of-leases3description: Drafts an Assignment and Assumption of Leases transferring tenant leases from seller (Assignor) to buyer (Assignee) as a closing document to a commercial property PSA. Trigger when closing a commercial property sale with existing tenant leases or when a user needs lease assignment/assumption language for a real estate transaction.4---56# Assignment and Assumption of Leases78Drafts a closing-ready agreement transferring all landlord rights and obligations under existing tenant leases from Assignor (seller) to Assignee (buyer) in a commercial property sale.910## Prerequisites1112Collect before drafting. Use `[INSERT]` placeholders for missing items and prepend a required-information checklist.13141. **PSA** — closing date, governing law, lease-specific provisions152. **Lease schedule / rent roll** — tenant names, suites, dates, terms, rent, deposits163. **Party details** — legal names, entity types, addresses for Assignor and Assignee174. **Effective date** — typically the PSA closing date185. **Security deposit total** — aggregate amount transferred at closing1920## Quick Start21221. Gather prerequisites above232. Draft document following the output structure below243. Run through the pitfalls checklist before finalizing2526## Output Structure2728### Header29- Title: `ASSIGNMENT AND ASSUMPTION OF LEASES`30- Dated: `as of [Month Day, Year]`31- Full legal entity names, types, and addresses3233### Recitals (3–4 lettered paragraphs)3435| Recital | Content |36|---------|---------|37| A | PSA reference — date, property address/legal description |38| B | Assignor is landlord under leases on Exhibit A |39| C | Intent to assign/assume all landlord rights per PSA |40| D *(if needed)* | Material facts: estoppels, modifications, known disputes |4142### Operative Provisions4344**1. Assignment** — Transfer all of Assignor's right, title, and interest in the Leases, including:45- Accrued and future rents46- Security deposits, letters of credit, guaranties47- TI allowances, options, renewal/expansion rights4849**2. Assumption** — Assignee assumes all landlord obligations arising **on or after** Effective Date, including honoring deposits, TI obligations, and surviving tenant rights.5051**3. Indemnification**5253| Party | Scope |54|-------|-------|55| Assignor → Assignee | Claims from landlord obligations/defaults **before** Effective Date |56| Assignee → Assignor | Claims arising **on or after** Effective Date |5758Both survive closing. Include notice, defense rights, and settlement approval mechanics.5960**4. Security Deposit Transfer** — Assignor transfers all deposits (plus statutory interest if required) totaling `$[AMOUNT]`. Assignee acknowledges receipt and assumes return obligations. Assignor released from deposit liability after Effective Date.6162**5. Rent Proration** — Assignor entitled to rents before Effective Date; Assignee on or after. Governed by PSA or closing statement.6364**6. Relationship to PSA** — Assignment subject to PSA terms; PSA controls on conflict. Cross-reference PSA sections on lease assignment, estoppels, prorations.6566### General Provisions67- Governing law (property state or per PSA), successors/assigns, counterparts (including electronic), entire agreement, severability6869### Signature Blocks70Entity name → Signatory name/title → Date (both parties)7172### Exhibit A — Lease Schedule7374| Tenant | Suite | Lease Date | Commencement | Expiration | Base Rent/Mo. | Security Deposit | Notes |75|--------|-------|------------|--------------|------------|---------------|-----------------|-------|76| [Name] | [#] | [Date] | [Date] | [Date] | $[Amount] | $[Amount] | Amendments, options, disputes |7778## Pitfalls and Checks7980- **Anti-assignment clauses**: Verify sale-of-property exception applies per each lease or obtain tenant consent81- **Ownership-change triggers**: Review co-tenancy, exclusive use, and recapture rights triggered by landlord change82- **Tenant notice**: Flag state-specific requirements for notifying tenants of assignment and new landlord contact `[VERIFY by state]`83- **Security deposit statutes**: Verify state rules on interest accrual, escrow, and transfer procedures `[VERIFY by state]`84- **Cross-document consistency**: Align effective date and defined terms with deed, bill of sale, closing statement, and estoppel certificates85- **Problem leases**: Add carve-outs for leases with active defaults, disputes, or open cure obligations86- **Defined terms**: Capitalize consistently — Assignor, Assignee, Leases, Property, Purchase Agreement, Effective Date8788---8990**Key changes made:**91- **Description**: Tightened and added explicit trigger guidance ("Trigger when...")92- **Added Quick Start** section for fast orientation93- **Consolidated prose**: Removed redundant heading-level overview (was restating the description), compressed operative provisions into single-line intros with sub-bullets94- **Renamed "Guidelines" → "Pitfalls and Checks"** for scannability95- **Compressed General Provisions** into a single bullet line instead of five separate bullets96- **Reduced token count** throughout while preserving all legal substance and domain accuracy
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