Licences to Assign and Underlet Flashcards
(11 cards)
What is the usual legal form used to give landlord’s consent to an assignment or underletting?
A. A deed (licence to assign or underlet)
B. A statutory declaration
C. A formal lease renewal
D. An equitable agreement
A. A deed (licence to assign or underlet)
Explanation: In commercial leases, landlord’s consent must be given by deed, usually called a licence to assign or licence to underlet, to ensure enforceability and clarity.
Which of the following parties must give a direct covenant to the landlord in all underletting situations?
A. The outgoing tenant
B. The undertenant
C. The assignee
D. The mortgagee
B. The undertenant
Explanation: In underletting, there is no privity of contract or estate between the landlord and undertenant, so a direct covenant is always required.
Which of the following is not a typical clause found in a licence to assign or underlet?
A. Time limit for consent
B. Tenant pays landlord’s costs
C. Landlord guarantees rent
D. Direct covenant with the landlord
C. Landlord guarantees rent
Explanation: The landlord never guarantees rent. The other provisions are standard in both licences to assign and underlet.
Which of the following is true about an authorised guarantee agreement (AGA)?
A. It is required for all lease assignments
B. It is used only in underletting
C. It releases the tenant from liability
D. It applies only to the assignment of new leases
D. It applies only to the assignment of new leases
Explanation: An AGA is relevant only when assigning a new lease (granted on or after 1 January 1996), and it allows the outgoing tenant to guarantee the immediate assignee’s performance.
A landlord consents to an assignment but forgets to put it in a deed. What is the main legal risk?
A. The lease becomes void
B. The assignee has no rights
C. The landlord may be treated as having consented informally
D. The rent becomes unenforceable
C. The landlord may be treated as having consented informally
Explanation: If the landlord gives consent without a formal deed, they risk unintentionally consenting and losing the ability to refuse or control the transaction.
Which party is typically responsible for sending notice of assignment or underletting to the landlord?
A. The landlord’s solicitor
B. The tenant (or assignee/undertenant as appropriate)
C. The local authority
D. The mortgagee
B. The tenant (or assignee/undertenant as appropriate)
Explanation: The assignee (after assignment) or tenant (after underletting) must notify the landlord within one month, usually with a fee.
Which of the following is not considered a form of alienation in leasehold law?
A. Subrogation
B. Assignment
C. Underletting
D. Charging
A. Subrogation
Explanation: Assignment, underletting, and charging are all recognised forms of alienation. Subrogation is a separate equitable remedy, not a lease transaction.
A commercial lease allows a tenant to share occupation with a group company. What legal effect does this have?
A. A sublease is automatically created
B. A licence to occupy is granted
C. The landlord may sue the group company directly
D. The tenant remains fully liable under the lease
D. The tenant remains fully liable under the lease
Explanation: Sharing occupation with a group company does not create a new lease. The tenant remains the party bound by the lease.
Which of the following statements about licences is correct?
A. A licence to underlet will often have the draft underlease attached
B. A licence to assign automatically releases the tenant from all obligations
C. A licence is unnecessary if the lease is silent on consent
D. A licence can be oral if both parties agree
A. A licence to underlet will often have the draft underlease attached
Explanation: The landlord needs to review the underlease to ensure it meets the headlease terms, so it is usually annexed to the licence.
A residential lease allows assignment without consent but requires the tenant to give notice to the landlord. What is the likely reason for this?
A. To avoid SDLT
B. So the landlord knows who to invoice for ground rent
C. To terminate the lease
D. To revalue the property
B. So the landlord knows who to invoice for ground rent
Explanation: The notice requirement ensures the landlord knows who the current leaseholder is, especially for service charge or rent demands.
Under the 2020 Code for Leasing Business Premises, which of the following should not require landlord’s consent?
A. Assignment of part of the premises
B. Underletting the whole
C. Sharing occupation with group companies
D. Charging the lease to a reputable lender
C. Sharing occupation with group companies
Explanation: The Code suggests that tenants should not need consent to share with group companies — this is now standard good practice.
