Negotiating assignment rights
I’m negotiating a ground lease with a Lessor and would like to be removed from all liability in the case of sale of business to a tenant with equal financial strength and experience, not to be unreasonably withheld by the landlord. But the LL is giving me a hard time. Is this typical or am I getting a hard deal? Are there any creative circumventions to this that would create a win-win for both parties? I do not want to remain as the guarantor after the business is no longer mine (and frankly, it seems like a stupid right to withhold). 

Before anyone mentions it, I have legal council and will be consulting them after the LL provides me  with the agreement. Thanks in advance. 
[{"id": "e7kk6pr", "text": "Your request generally is not considered unreasonable.   I have that in most of my leases. ", "replies": [], "depth": 1}, {"id": "e7kwo7g", "text": "While it\u2019s a little hard to speculate without knowing more details about the ground lease and your negotiating leverage based upon your operating history, financial strength, etc., it is not uncommon at all for a landlord to require the original tenant under a lease to remain primarily liable under the lease even after it is assigned.  From a landlord\u2019s perspective, the landlord has bargained for the ground leasing of a property to you (the original tenant) and not some future unknown assignee despite the fact that the assignee might have the same or better financials.   If you are personally guaranteeing the lease, you might suggest to the landlord that the personal guaranty burn off at some point after the assignee has demonstrated it can perform under the lease.  However, I rarely see landlords agree to release the original tenant after an assignment unless that original tenant has serious negotiating leverage in the transaction (for example, a large, publicly-traded company might have this type of leverage).  ", "replies": [], "depth": 1}, {"id": "e7q0azj", "text": "There are always was to work this out.  If the \"burn off\" does not work as Rustynailbiter suggested, offer up one or more of the following...the fewer the better:\n\n1.  Agree to guaranty the SECOND $50,000 (insert the lowest number you can negotiate).  This means that you will be responsible for the amount of the default  between $50,000 to $100,000.00 only \"...after the LL has exhausted all other collection remedies AND has collected the first $50,000...\"\n\n2.  Offer to limit your exposure to the first $50,000 (insert lowest number you can negotiate) for the balance of the current term of the lease.\n\n3.  Offer to \"buy your way out\" of the current guaranty for $\\_\\_\\_\\_\\_\\_\\_ and be released\n\n4.  In the sale documents of your biz, negotiate the right to step back in to the biz in the event of an Uncured Monetary Lease Default.  This one should be a last resort however it will give you the chance to cure the default using the business (if there is anything left).\n\n5.  Agree to \"Match\" every dollar Collected up to a maximum of amount of $\\_\\_\\_\\_\\_\\_\\_\\_.  This means that you agree to put up as much money (up to the limit) that the LL ACTUALLY collects.  Most experienced LL would not accept this due to the very low collection rate.  \n\nIn any of the suggestions above, if you agree to put up or pay any money on behalf of the defaulting tenant, require that not only the LL obtain a judgement against the tenant first, but that the judgment gets assigned to you upon the payment of your payment to the LL.  Note that most judgments are rarely collectible.    \n\nThere are other ways to skin this (LL) cat however they get much more complicated.  Most lawyers would not know how to write this up correctly and if you find one that does, it will likely be expensive.  In short:  ALL PGs (Personal Guaranties) SUCK!  Good Luck!", "replies": [{"id": "e7s4pt9", "text": "Hi there, thanks so much for your in-depth response. I had a couple questions in regards to your points and please forgive me in advance as I am not entirely familiar with personal guarantees and leases in general (I have owned the property of all my businesses in the past). To give you a little context, the business is an express car wash and the minimum annual rent will be $300,000 a year on a 25 year term with two 10 year options to renew, with percentage increases. \n\nNow, getting to my questions:\n\n1) Im curious as to where the amount of $100,000 came from. Was that an arbitrary number you selected to represent LL damages in event of tenant default? Or is $100,000 a standard in leaseholds for personal damages? I have a feeling the prescribed number would be higher for such a large (financially) lease like mine. Additionally, how do the stages of collections proceed? This was in reference to first and second $50,000. \n\n3) Ideas on a starting point for buyout of my guaranty, in the context of my lease? My thoughts being in the same vein as ground leases being typically around 10% of the property\u2019s value, annually. \n\n5) I\u2019m slightly confused by your last sentence. It begs an alternate scenario that the landlord would prefer over matched \u2018collected dollars.\u2019 What is that scenario?\n\nMy apologies for the almost elementary breakdown of personal guarantys and their definitions, but Ive yet to receive the agreement from the LL and have yet to pay for schooling from my council. Thanks again for your time\n", "replies": [{"id": "e7sbp86", "text": "Your current term left on your original Lease is 25 years?  \n\nIs the $300k current rent less than 8% of the business current annual sales?\n\nDo you have the right to step back into the biz if the buyer defaults on the Lease? \n\nHave you sold the business yet?  As in closed escrow? \n\nDoes the state where the property is have a LL Requirement to \"Mitigate Damages\".  If so, this is very much in your favor.  You can use this to your advantage when negotiating your PG release.\n\nBefore reading any of my comments below, keep in mind that it is VERY difficult to collect defaulted rent.  Getting judgments is relatively easy...actually collecting is the equivalent to seeing a leprechaun riding a unicorn at the end of a rainbow. \n\n1) Yes, the $100k was arbitrary, however, that said, your annual rent is $300,000, so my $100k is about in line.  Given your rent is a $300k, I would start by asking to guaranty only $50K and wait to hear what the LL says.  \n\n2) Stages of collections start differently in each state. Im in CA and have had to start collections many times over the years in CA.  Fortunately I have never had to start collections in any other state where I am a LL.\n3) The starting point on a buyout for me based on what you have told me would be $50k.  This would be \"found money\" to your LL.  Most LL know how hard collecting is if they have been a LL for very long.\n\n4) Matching dollars would be the most difficult to accomplish.  It too would need a ceiling even if the LL agreed to such a formula.  It would be you agreeing to matching dollar for dollar up  to a maximum of any dollars actually collected from the defaulting tenant.  For example, if the LL actually collected $50,000, then you would agree to match that $50K so the LL winds up with $100K total.\n\nThe problem with most council is that they are rarely actual LLs.  Additionally, ALMOST all council do not understand the math involve in real estate and business.  \n\nMy first recommendation to you would be to negotiate the sale of your business with more safeguards in it if possible.  Next would be to limit your PG in whatever way you can.  If possible, ask your LL if you can have the first right of refusal to buy the property from him in the event of a tenant monetary default.  In other words, you are saying, without actually saying it, \"Mr. LL, I will agree to this PG if you agree to give me the first right of refusal to buy the property if there is a monetary default.\"\n\nIf you need me to look at any documents (Im not a lawyer) Im happy to do so.  I have, unfortunately read and negotiated more PGs than I care to remember. Feel free to pm me.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "e7wudwx", "text": "Whenever a tenant pulls this off, I often see buzzwords that you can be released if you assign the lease to an assignee with a tangible net worth equal to or greater than tenant. In a standard lease, you don\u2019t have great odds. But a ground lessee\u2019s interest is similar to a fee simple interest in many ways, so you should have a better shot with this on a ground lease. If you fail on all fronts, make sure that your lease assignment document includes an indemnity from the assignee for all claims and liabilities arising under the lease after the effective date of the assignment. If the landlord comes after you after the sale, you can immediately seek indemnification from the assignee. This language is 100% standard so you\u2019ll be able to get it with good legal representation.", "replies": [], "depth": 1}]