Completion and post-completion steps (Procedural steps for the grant of a lease or underlease)- FS

Question 1

What is a Licence to Underlet and when is it required?

Answer 1

It is formal consent from the original landlord permitting the head tenant to sublet. Required when a lease includes a subletting arrangement.

Question 2

What documents are typically gathered before lease completion?

Answer 2

• Agreement to lease
• Draft lease/underlease
• Land Registry title documents
• Landlord’s insurance policy
• Licence to underlet (if applicable)

Question 3

What is apportionment in lease transactions?

Answer 3

Rent and outgoings paid in advance are proportionally adjusted at completion so that the buyer reimburses the seller for the period from completion to the next rent date.

Question 4

Is SDLT (Stamp Duty Land Tax) payable on leases?

Answer 4

Yes, SDLT is potentially payable on:

• Any premium (capital sum paid on the grant)
• The rent payable under the lease

Question 5

Is it compulsory to register a lease of exactly 10 years?

Answer 5

Yes. Leases of 7 years or more must be registered at the Land Registry with their own title, even if the landlord’s freehold is unregistered.

Question 6

Can a lease of less than 7 years be registered at the Land Registry?

Answer 6

No, not in its own right. However, it can be voluntarily noted against the landlord’s title, but it won’t receive its own title number.

Question 7

Does the registration requirement depend on whether the freehold is registered?

Answer 7

No. Leases ≥7 years must be registered regardless of whether the freehold title is registered or not.

Question 8

What happens if a 5-year lease is granted—can it be registered in its own right?

Answer 8

No. Leases under 7 years are not capable of standalone registration at the Land Registry.