There are a num­ber of sit­u­a­tions where it is desir­able to trans­fer a com­mer­cial Lease from one par­ty to anoth­er- this is known as an Assignment.

If a busi­ness wish­es to vacate their premis­es before the Term of a Lease has elapsed, they can trans­fer the Lease to anoth­er par­ty in order for them to com­plete the term — this could, for exam­ple, be for rea­sons of finan­cial dif­fi­cul­ty or due to the need for larg­er premises.

What­ev­er the exact cir­cum­stances may be, there are a num­ber of legal issues that need to be tak­en into consideration.

Does the Lease allow for Assignment?

Not all Leas­es per­mit Assign­ments, in the same way that not all Leas­es have Break Claus­es. The Lease should be checked for claus­es relat­ing to Assign­ments, ide­al­ly by a Solic­i­tor.

If the Lease does per­mit Assign­ments, the cur­rent Land­lord must then be con­tact­ed in order to ascer­tain whether they would be amenable to an Assign­ment of the Lease tak­ing place.

Poten­tial objec­tions from the cur­rent Landlord

If the nature of the busi­ness be car­ried out at the prop­er­ty is to change, the Land­lord may be with­in their rights to raise an objec­tion. How­ev­er, they may also wish to ensure that there will be a long-term Ten­ant at the prop­er­ty and that their rental income will not be affected.

It is advised to keep the Land­lord informed in advance of any poten­tial Assign­ment — this should leave them more inclined to agree to an Assign­ment and after all, it must be remem­bered that they are enti­tled to sim­ply enforce the exist­ing Lease through the appro­pri­ate legal channels.

Oth­er pos­si­ble options

The Land­lord may instead sug­gest that the Lease is rescind­ed and a new Lease grant­ed to the incom­ing Ten­ant. The Land­lord may sug­gest that the new Lease be grant­ed on the same terms as the one being rescind­ed, how­ev­er amend­ments to the terms of the Lease, such as a longer Term, are not uncommon.

Appoint­ing an expe­ri­enced Solic­i­tor to over­see the entire process can ensure that all of the nec­es­sary infor­ma­tion is in hand before sign­ing on the dot­ted line.

‘Sweet­en­ing the deal’ for the new Tenant

If the incom­ing Ten­ant is tak­ing a risk in assum­ing respon­si­bil­i­ty for the assigned Lease, it is like­ly that they will want the best pos­si­ble deal that mit­i­gates the expense and gen­er­al has­sle of hav­ing to move premises.

It is there­fore pru­dent to con­sid­er to what lengths you wish to be removed from the oblig­a­tions of your Lease.

Once again, an expe­ri­ence Solic­i­tor can ensure that all of the nec­es­sary legal doc­u­men­ta­tion is draft­ed to cre­ate a legal­ly-bind­ing record of the val­ue of the Lease Assign­ment (fix­tures, fit­tings, stock, good­will and so on).

To dis­cuss com­mer­i­cal prop­er­ty, please get in touch with Luke Hewitt on 01625 523988 or mail@​JBGass.​com