Grant Of Lease Procedure

Question 1

Pre exchange and completion steps for grant of lease

Answer 1

1) LL draft lease
2) LL deduce title - eg official copies
3) T investigate title - check LL has title to grant lease and for any freehold covenants (as they will bind T)
4) T carry out pre- contract searches - same as for FH transaction, eg local authority, drainage, desktop
5) T send pre-contract enquiries to LL
- CPSE1 and CPSE3. LL to respond
6) LL prepare original and counterpart lease (send counterpart to T)
7) LL send completion statement to T
8) T carry out pre- completion searches

Question 2

Pre completion searches required for grant of lease

Answer 2

OS1 - lease of whole
oS2 - lease of part
OS3 - lease not registrable (7yrs or less)

Question 3

What is a completion statement

Answer 3

From LL to T setting out £ due on completion.

Rent will be apportioned if part way through a quarter

Question 4

Forms used for pre contract enquiries in grant of a lease

Answer 4

CPSE1 and CPSE3 (specific to grant of lease)

Question 5

What if client does not want pre contract searches in grant of lease procedure

Answer 5

Explain consequences

Question 6

Who drafts the lease

Answer 6

LL

Question 7

When is agreement for lease/exchange required

Answer 7

When parties want to commit to lease but arent ready to exchange

Question 8

How to complete (in grant of lease procedure)

Answer 8

Solicitors agree to complete via phone and execute leases

Question 9

Post completion steps in grant of lease

Answer 9

Pay SDLT if necessary
Register lease if necessary

Question 10

When to register lease

Answer 10

If over 7 years

Question 11

How to register lease

Answer 11

Send form AP1 to land registry along with
- copy of lease
- LL’s lender consent (if applicable)
- SDLT5

Question 12

SDLT rates on commercial leases

Answer 12

0- £150k - 0
£150,001 - £5m - 1% of net present value
£5m + - 2% of net present value