As people return to work in office buildings following the COVID-19 stay-at-home orders, tenants may be envisioning a new normal — one in which fewer people come into work at any particular time, less office space is needed due to downsizing or more work from home opportunities, or the office space needs to be physically altered to allow for social distancing. In this new normal, landlords may be requested to modify existing leases prior to their full term.

How can landlords balance the changing needs of tenants with the economic realities of needing to have the space leased? Landlords will want to consider the following options to keep current tenants intact or reduce the financial ramifications if the tenant needs to step back from its current office footprint.

Assignment or Sublease of Existing Lease

One option is for a landlord to agree to assign the space to a new tenant under the existing lease.

Leases normally require that a tenant obtain the consent of the landlord in order to assign the lease. An assignment of the lease provides for a direct relationship between the landlord and the new tenant and the old tenant normally remains liable under the terms of the lease, but that can be subject to negotiation.