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assignment of business lease
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Assignment of business lease

Assignment of business lease

You want to get rid of your existing lease to a third party who’s keen to take it over.
This is called assigning the lease.
Our document enables you to do just this.

Advice

Before going ahead with your plans, you must first check your lease to see if you’re even allowed to assign it. If your lease says nothing, then you’re free to proceed with your plan and won’t have to either tell your landlord or request their permission. More likely, your lease will allow you to assign the whole of your premises, subject to your landlord giving their consent, which must not be unreasonably withheld.

Asking permission

Your landlord will only look kindly upon your request if they’re satisfied that the proposed incoming tenant is going to be able to pay the rent and stick to the terms of the lease. In order to establish this, they’ll want to take up references - bank, trade, previous landlord etc.

Costs

Don’t be surprised if your landlord asks you to pay their legal costs incurred in dealing with your request to assign the lease. It’s a perfectly normal request.

Dragging their feet

You’ll probably want out of your lease as quickly as possible. If your landlord’s consent is needed and they appear to be moving slowly, you might want to remind them that the Landlord and Tenant Act 1988 says that they’ve got to deal with your application within a reasonable period of time. Additionally, the Act also says that if your request to assign is refused, then it must be on reasonable grounds. If you find yourself in this position, a claim for damages against the landlord might be the next step.

Free at last?

Even though you’ve assigned the lease, the chances are that if the new tenant later defaults, you’ll still be on the hook to pay the rent etc. The reason is that it’s highly likely that as a condition of allowing you to assign the lease, your landlord will ask you to enter into an “authorised guarantee agreement”. Essentially, this is a document in which you guarantee the performance of the lease by your successor. If the lease is assigned again, then you’re off the hook if things go pear shaped later.

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