Landlord Can Take a Hit When Lease Voluntarily Terminated If Space Has Been Subleased

Courts have determined that a mutual termination of the master lease does not automatically terminate existing subleases.

Recommendations

1. Negotiate lease provisions requiring subleases to terminate with the master lease
2. When terminating leases, require sublease termination or assignment
3. If subleases create serious problems, default-terminate the lease instead

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