Procedural Steps For The Assignment Of Lease Flashcards
What is assignment of a lease?
This is the transfer of an existing lease by the tenant to a THIRD PART.
What is the major difference between a sale of a freehold prperty and the assignment of a leaes?
Lease itself. There is no scope to negotiate terms of the leaes.
Landlord may agree to vary the terms, but at absolute discretion.
Need for landlords consent to assign the leaes
Why are alienation covenants important for assignment of a lease/
As the tenant must get the landlrods consent to assign, before they can.
Must get landlords consent.
What is the licence to assign
This is a formal licence, which is when the landlords consent is required.
When is the licence to assign finalised?
Until completion. However, the assignor will need to check that the landlord wll agree to assignment in PRINCIPLE.
What are good sources of references?
Current landlord
Assignees bank
Assignees employer
Professional person, accountant or solicitor
Person or company with whom assignee regularly trades
3 years of accounts in the case of the company
Under SC, how ist he contract of an assignment set out?
Either party may rescind the contract by notice if the consent has not been given 3 working days before compeltion date.
There timing of completion is important, it is safest not to exchange until landlrods consent has been obtained.
Under SCPC, how should hte contract deal with landlords consent?
If landlords consent has not been obtained by completion date, completion is postponed until 5 working days after assignor notifies buyer that consent has been given.
Contract MAY NOT BE RESCINDED until 6 months have passed since the original completion date.
What ist he purpose of a licence to assign?
Is for the landlord to give consent to the assignment of the leaes.
If assignment were to take place WITHOUT consent, the assignor may be committing breach of tenants alienation covenants.
Who prepares the licence to assign draft?
Landlords solicitor, and send to the assignors solicitor.
What are the 4 components of the licence to assign?
Landlord grants consent to assignor to assign the leaes to the assignee
If lease was granted on or after jan 1996, assignor will give an AGA
If lease was granted before, a direct covenant by assigne to observe and perform covenants
Assignor agrees to pay landlords legal and professional costs
What covenants will be contained in an AGA?
Guarantee that the assignee will perform tenants covenants in lease
Promising to perform such covenants if assignee does not
Idenmifyingl landlord for assignees failure to pay rent, or to observer the other covenants
Promising teh take a new lease if the liability of the assignee is disclaimed on insolvency.
Who are parties to an AGA?
The landlord
The assignor (original tenant, seller)
Who are parties of a direct covenant in an old lease?
Landlord and the assignee (buyer, new tenant), privity of contract
What is the deed of assignment?
The transfer deed during an assignment
