It is important from the outset to recognise whether the Lease is registered or needs to be registered, in order to identify the appropriate form that needs to be used.
If the lease has a registered title, then the form of Assignment (AS1 or AS2) is not appropriate – instead the Land Registry Form TR1 should be used. It is likely to have a registered title only if the lease was originally granted before 13th October 2003 and was for a term of more than 21 years, or after 13th October 2003 and was for a term of more than 7 years. If the lease is unregistered but there is more than 7 years remaining on the lease then remember that it will is compulsory that it is registered at HM Land Registry – Lawdit Solicitors can deal with this aspect for you.
If you transfer an existing registered lease then this transaction needs to be registered at the Land Registry using Form AP1.
If an existing unregistered lease with a term of more than 7 years remaining is transferred / assigned then this needs to be registered at the Land Registry using Form FR1 – i.e. first registration of the Lease.
If either party to the transaction is not represented by a solicitor or licensed conveyancer then the Land Registry will require evidence of identity for that unrepresented person – this is dealt by in the Form FR1.
The Assignee (purchaser) will need to submit a Land Transaction Return (Form SDLT1) to the Inland Revenue following completion of the Assignment. There will only be Stamp Duty Land Tax to pay if the price paid for the assignment is more than Â£150,000 and there is annual rent payable more than Â£1,000 (assuming the property is not residential) – but even when there is no duty to pay a return generally has to be sent in – please see <http://www.hmrc.gov.uk/so/sdlt/index.htm#1> for more information.
If further security is required against performance of the tenants obligations then the landlord may wish to consider taking a Rent Deposit. This is dealt with by a Rent Deposit Deed.
Beware – leases are substantial and often complex documents. If you have any doubts you should consult one of our specialist Solicitors, who can give you clear and thorough advice on the best way to deal with the assignment and we can also deal with the registration of the Lease with the Land Registry for you.