Chapter § 34.5 DRAFTING CONSIDERATIONS

• Jurisdiction: Oregon

§ 34.5 DRAFTING CONSIDERATIONS

There is no required form for transferring a leasehold interest, but § 34.5-1 to § 34.5-2(d) will attempt to identify some of the issues to consider when drafting an assignment or sublease. The sample forms included at the end of this chapter may prove useful in drafting documents applicable to more typical circumstances. See Form 34-1 (Assignment and Assumption of Lease) and Form 34-2 (Sublease). There are many other resources available for drafting, including several American Bar Association publications. One notable resource is Brent C. Shaffer, The Sublease and Assignment Deskbook (2d ed 2013). There are also many forms of assignment and sublease, which may be found online simply by searching, often disclosed pursuant to regulatory requirements.

A valid transfer does not have to be made in writing, although a written agreement is always preferable. The occupation of the premises by the transferee is sufficient to take the transfer out of the statute of frauds. Abbott v. Bob's U-Drive, 222 Or 147, 157, 352 P2d 598 (1960).

§ 34.5-1 Drafting the Assignment-and-Assumption Agreement

The essence of the assignment-and-assumption agreement is the assignment-and-assumption clause. The assignor assigns the leasehold interest to the assignee, and the assignee assumes the obligations under the lease contract.

As a first step, the parties should review the original lease and confirm whether all of the provisions of that lease are acceptable to the assignee. Does the use clause of the original lease reflect the assignee's intended use? Can the assignee occupy and use the property as it intends without violating the restrictive covenants in the lease? Are there outdated provisions in the lease that are no longer appropriate or applicable to the property? If any provisions are not acceptable to the assignee, the parties will need to explore whether the original landlord is willing to amend the lease concurrent with the assignment. Those amendments may be embedded in the assignment-and-assumption agreement, as long as the landlord's consent is expanded to expressly provide that the landlord agrees to modify the lease as provided in the assignment-and-assumption agreement.

The second step is to verify the current status of the original lease. The assignment-and-assumption agreement should include appropriate representations and warranties regarding the lease and the leased property. Any existing defaults should be cured by the assignor or...