Assignment clause needs seller consent. Does that end it?

Consent-required assignment clauses are standard in commercial. The broker's form is the seller's form and it's written to protect the seller. You have three ordinary moves. Ask for the clause to be struck or softened to consent not to be unreasonably withheld, disclose your intent up front and get consent baked in, or take title yourself and resell.

The entity carve out is real and people do use it, but whether it works for what you want depends on what "controlled by buyer" means in the definition and whether you're actually selling the entity or selling the contract. Those are different transactions with different tax treatment. That one's an attorney question, and on an 890k deal it's cheap to ask.

21 days on a two tenant industrial building is tight but not crazy. What makes it tight is estoppels. You need signed estoppel certificates from both tenants confirming rent, term, deposits, and that there are no side agreements, and tenants are slow. If either tenant takes 18 days to sign, your due diligence period expired while you were waiting and your 20k is hard.

I don't follow how the deposit going non-refundable works at all. If the buyer walks, the seller keeps 20k and the building? What stops a seller from stringing everyone along?

@marlow the seller keeps the deposit as liquidated damages and the deal dies. That's the trade for taking the property off market. It's normal.

warrant, the sentence in your section 12 I'd focus on is "sole discretion." That language means the seller doesn't have to be reasonable and doesn't have to explain. Courts read sole discretion clauses differently depending on the state and the facts, so I'm not going to tell you what a judge would do, but as a practical matter you should treat it as an absolute veto and plan around it rather than plan to argue about it.

The other thing I'd read is whether there's an anti-assignment consequence spelled out. Some forms say an assignment without consent is void. Others say it's a default that lets the seller terminate and keep the deposit. Those are very different amounts of risk on 20k.

Also check whether either lease has a landlord change of control or a right of first refusal on sale. On small industrial that shows up more than people expect and it sits in front of everything you're planning.

Before Friday I'd want to know what the 890k is against. Two tenants in 14,000 feet, what are the rents per foot, what's the term left, and are they net or gross? Nobody in the thread has the income yet and you can't tell if there's a spread to assign without it.

@anchor yes. warrant, you have three people who said send me industrial. That's not a buyer, that's a mailing list. Signing an offer with 20k of exposure on a Friday deadline because a broker set the deadline is how the 20k goes away.

Is the 21 day clock from the effective date or from delivery of the seller's due diligence materials? That distinction is worth more than the number of days. If it runs from delivery of leases, estoppels, environmental, and survey, you're in much better shape than if it runs from signature and the broker takes nine days to send you a rent roll.

@sable that's the one I'd push on. I've seen forms where the period doesn't start until seller delivers a defined list, and forms where it starts on signing and delivery is a promise with no teeth.

I've only ever looked at residential paper, so I didn't realize the whole assignability question could just be closed off by one sentence. I assumed the model worked the same everywhere and the difference was only size.