PLP: Procedural Steps for the Assignment of a Lease

Question 1

What is “assignment” in the context of leasehold interests?

Answer 1

The transfer of a tenant’s entire leasehold interest (the lease) from the existing tenant (assignor) to a new tenant (assignee).

Question 2

Who are the main parties involved in a commercial lease assignment?

Answer 2

Assignor (current tenant)

Question 3

Why is landlord’s consent usually required for assignment of a commercial lease?

Answer 3

To allow the landlord to vet and ensure the assignee is suitable (e.g.

Question 4

What is an absolute covenant against assignment?

Answer 4

A covenant in the lease that prohibits assignment entirely (often used to prevent sub-letting of parts).

Question 5

How does a qualified covenant against assignment operate under the Landlord & Tenant Act 1927?

Answer 5

It requires landlord consent

Question 6

What additional timing requirement does the Landlord & Tenant Act 1988 impose on consent?

Answer 6

By s.1 LTA 1988

Question 7

Give two examples of “reasonable grounds” for a landlord to withhold assignment consent.

Answer 7

1. Proposed use conflicts with shopping centre mix

Question 8

2. Assignee can’t provide satisfactory references or guarantor.

Question 9

What practical document typically governs the landlord’s consent to assignment?

Answer 9

A Licence to Assign (drafted by landlord’s solicitor and agreed by tenant and assignee).

Question 10

List three key tasks of the tenant’s solicitor in the pre-exchange stage of assignment.

Answer 10

1. Apply for landlord’s consent and give costs undertaking

Question 11

2. Draft or review contract (if exchanging)

Question 12

3. Deduce title and answer pre-contract enquiries.

Question 13

List three key tasks of the assignee’s solicitor before exchange.

Answer 13

1. Investigate and report on title and lease

Question 14

2. Raise CPSE1 and CPSE4 enquiries and searches

Question 15

3. Review and negotiate draft contract and Licence to Assign.

Question 16

What is the purpose of a costs undertaking in the consent application?

Answer 16

The tenant’s solicitor promises to cover the landlord’s legal and surveyor costs in processing the consent application.

Question 17

What form is used for the deed of assignment on registered leases?

Answer 17

Form TR1 (same as for registered freehold transfers).

Question 18

How is the completion statement for assignment typically calculated?

Answer 18

By apportioning rents and service/insurance charges between assignor and assignee up to and after completion date.

Question 19

Which official search is carried out pre-completion for a registered lease assignment?

Answer 19

An OS1 search over the tenant’s leasehold title (to check for interim entries).

Question 20

Describe the key steps at completion of a lease assignment.

Answer 20

1. Assignee’s solicitor pays completion monies to tenant’s solicitor

Question 21

2. All solicitors agree by phone to date and “complete” Licence to Assign and Deed of Assignment

Question 22

3. Documents are exchanged and dated.

Question 23

What post-completion filings must the assignee’s solicitor undertake?

Answer 23

Submit SDLT (or LTT) return and payment

Question 24

Before 1 January 1996 (old leases)

Answer 24

how did assignment affect the original tenant’s liabilities?

Question 25

How did the Landlord & Tenant (Covenants) Act 1995 change assignment for new leases?

Answer 25

It released the original tenant from all future liabilities and made the assignee liable for all lease covenants.

Question 26

What is an Authorised Guarantee Agreement (AGA)?

Answer 26

A deed under which an outgoing tenant guarantees the assignee’s performance of the lease covenants (only for the next incoming tenant).

Question 27

When does an outgoing tenant’s liability under an AGA end?

Answer 27

Automatically upon any subsequent valid assignment of the lease by the assignee.