Lease Transfer

By | April 23, 2012

Lease transfer is conducted when the current leaseholder wishes to terminate the lease or come out of the lease. The lease is then transferred to another willing person who wishes to procure the lease. Since lease is a long time agreement, if the lease holder wishes to terminate it, a huge chance remains that landlord will lose a great amount of money. Hence, the requirement of lease transfer occurs.

Most of the time, the leaseholder, who wishes to come out of the lease, is required to find an individual or a company to whom the lease would be transferred. Sometimes, the leasing company also finds out such a willing party, but that completely depends upon the leasing company. This helps the leaseholder avoid paying the remaining payments or termination penalty.

To conduct a successful lease transfer and to avoid any legal problems in future, the following steps are needed to be kept in mind.

  • Contact your lessor to confirm that lease assumptions or lease transfers are allowed.
  • Find someone enthusiastic to continue on your lease. Ask connections, relatives and friends. Advertise on print media and various websites.
  • The prospective buyer has to complete a credit application. When the leasing company endorses the submission, it will issue transfer documents to be signed by the lessee-to-be and you.

The former leased asset is handed over to the new lessee, who begins making the outstanding payments. At the termination of the lease period, the new lessee returns the property to the leasing company.

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