Should you need to dispose of your office space prior to lease expiry or break, there are two main routes available under most leases and a third option which sits outside of this, as follows:
Assignment
An assignment would pass your lease liability directly onto the new tenant in its existing form.
The lease will set out the parameters under which this can take place, and the market conditions that prevail at the time will determine certain elements of the deal.
One such element is whether a capital payment would be due and which party would receive this. This will be dependent on whether there is any profit rent or rental deficit.
If the tenant has placed surety against the current lease, it is important to secure an assignee of sufficient covenant to warrant the return of your rent deposit (if provided) and to ensure they do not default on the covenants contained in the lease resulting in the landlord relying on the Authorised Guarantee Agreement.
Sublease
Under this option the tenant would act as an intermediary landlord between the superior landlord and the new subtenant.
The existing tenant would not only retain responsibility under their own lease but will also have a management commitment to ensure the sub-tenant complies with the lease to include paying the rent, service charge and any other outgoings due under the lease.
The specific covenants held within the lease will outline any restrictions that may be placed upon how this can be carried out. This could include the minimum quantum of space that can be sublet.
The terms upon which the tenant is able to sublet their space will be based on a combination of both the specific lease wording and the market conditions that prevail at the time.
Surrender
A surrender is where the landlord accepts the lease back allowing the tenant to walk away from the lease with no future liability to the landlord.
The landlord is under no obligation to accept a surrender and will in most cases only do so if commercially viable.
The terms of the surrender will depend upon the specific terms under the lease and how these contrast to the current market conditions.
This will normally involve a cash settlement being paid by the tenant to the landlord.
Your choice
The correct option to choose will depend upon each particular situation, to include the specific lease terms and market conditions at the time.
For further detail on the above options and how these could help you, please do get in contact.