How do you assign a lease?
Most commercial leases allow lease assignment. Usually – but not always – the tenant will need to obtain the landlord’s permission. Under the Landlord and Tenant Act 1927 the landlord can only refuse to grant their consent with good reason.
For example, a landlord might refuse permission if a new tenant wants to change the use of the property, if they are not financially stable or if their references are poor. The landlord’s solicitor will carry out the same legal checks with the tenant taking over the lease as they did with the original tenant.
Once the solicitor is satisfied that all checks have been met, they will draft:
- A License to Assign. This is a document that transfers the lease from one tenant to another.
- A Rent Deposit Deed. They may also draft an Authorised Guarantee Agreement. This is an agreement in which the original tenant guarantees that the new tenant will meet the terms of the lease.