6): The Grant and the Assignment of a Commercial Lease/Underlease Flashcards
(7 cards)
What is a lease and how does it differ by type?
Right to exclusive possession for a set time; an estate in land.
Contract between landlord (lessor) and tenant (lessee).
Commercial leases: LTA 1954 applies unless excluded.
Residential leases: Governed by distinct legislation (e.g. Housing Acts).
What are the key steps in drafting and agreeing a commercial lease?
- Landlord’s solicitor drafts.
- Tenant’s solicitor reviews + negotiates. - Agreement for lease may precede lease (contract to enter lease later).
- Deed formalities (per s.52 LPA 1925):
- Lease signed by landlord (Part I), tenant signs counterpart (Part II).
What pre-contract investigations and consents must tenants/assignees carry out?
Check landlord’s title + power to grant lease.
Get mortgagee consent if charged.
Search title (freehold/headlease).
For leases over 7 years: freehold deduced for HMLR.
Pre-contract searches: same as for freehold purchase.
If assigning: check for alienation covenant + landlord’s licence.
What is the format of an assignment of a lease?
By deed (s.52 LPA 1925).
If registered lease: use TR1.
If unregistered lease >7 years: triggers first registration.
Assignor gives title guarantee (modify for unperformed covenants).
Pre-completion: OS1 or K15 search, obtain licence to assign.
When is a lease or assignment registrable at HMLR?
> 7 years: Register lease + assignment.
3–7 years: May be voluntarily noted.
<3 years: Cannot be noted.
Assignment requires SDLT return (England) or LTT (Wales), notice to landlord.
What is a Licence to Assign and how does it affect privity?
Landlord’s consent, drafted by landlord’s solicitor.
Required under alienation clauses to avoid forfeiture.
Pre-1996 leases: direct covenant from assignee required.
Post-1996 leases: landlord may require AGA or direct covenant.
When can a landlord require an Authorised Guarantee Agreement (AGA)?
Lease granted after 1 Jan 1996.
There’s a qualified covenant against assignment.
Only if reasonable.
Assignor guarantees assignee’s compliance while lease is held.
