Presentation: When selling a business or an assignment of lease rights, the landlord can take several precautions (approval clause, guarantee clause solidarity etc. ..) so that the holder of the leasehold remains the guarantor of the implementation of rights and obligations attached to the lease that gives. However, the landlord can not claim against the assignee of the personal failings fault attributable to the transferor, except in specific cases. This article aims to address some legal issues in the relationship lender-seller-buyer under an assignment of right to lease or sale of a business comprising said lease rights.
Ø relationship between the lessor and the assignor
To increase the security of the lessor who is sometimes imposed a successor to the tenant as part of a sale of goodwill, the lessor inserted in the lease contract a clause guaranteeing solidarity.
By virtue of this clause, the seller remains attached to the transferee in the execution of the lease and obligations.
The transferor will be required to pay the rent and charges, repairs, rental etc. .. in case of failure of his successor until the expiration of the lease.
This clause is a commitment to joint guarantee and not a guarantee, which means that the grantor can not object to the lessor of the defenses which the debtor could claim.
The seller has contracted an independent enegagement that of his successors.
Since 1988, the Court considers that in the absence of any express provision of solidarity between assignor and assignee, the lessor may not require the first payment of rents accruing after the sale.
In the absence of contractual provision limiting the clause to the joint guarantee contract term of the lease, the assignor remains liable during the period of automatic renewal of the lease until it expires (Cass. civ third. 5 - 6-2002).
Should therefore be careful in choosing its assignee to avoid getting trapped.
Ø The relationship between the transferor and transferee
It is the principle of the landlord can claim against the assignee, the current tenant of the faults committed by the transferor.
In a decision dated June 30, 2010, the Supreme Court ruled that in case of successive transfers of the lease, violations committed by the previous tenants can not be relied upon by the landlord in support of an application termination of the lease to the wrongs of the last transferee.
Where the transferee acquires the right to lease or the business including said leasehold, it must respect the conditions and terms of the lease as it is now the sole owner of the right to enjoy the premises.
Correlation with the use of its premises, the transferee must, of course, comply with contractual and legal obligations (payment of rent, maintenance obligations, compliance with the use of contract etc ...).
However, it is common practice that the vendor sells his business even though there is a conflict with his landlord and the transferee is not aware of the existence of this conflict.
As a result, the lessor will not hesitate to bring legal action against the transferee for the failures of the previous tenant of its contractual obligations.
In this case, the landlord has taken the precaution to warn the assignee of the failings in the previous tenant and will remain to stop such breaches or acts contrary to the terms of the lease.
Thus, the transferee meets in person at fault for the actions of the seller if he himself has continued its shortcomings.
However, judges have understood that some donors had tried to take advantage of mistakes attributable to the assignor against the assignee for the refusal to pay for a foreclosure
The Supreme Court ruled that the landlord could not, to oppose the renewal of the lease the transferee to oppose the misconduct attributed to the transferor (Cass. civ 3. 10-1-2007).
The transferee must be borne in mind that it may be prosecuted by the landlord that will force him to force him to pay or repair the damage that occurred during the course of the lease, even those that occurred prior to the assignment.
Ultimately, when someone wants to buy a leasehold or a business, it must ensure during negotiations that there is no current legal proceedings between landlord and tenant present or at least if it has knowledge, integrate into the selling price of the risk of legal action instituted against him.
I am at your disposal for further information.