Thinking of taking on an existing commercial or business lease?

1. Acquire references

To begin you will need to get hold of trade and bank references and pass them on to the potential landlord, the purpose of doing this is to demonstrate to a prospective landlord that you are capable of keeping up with rental payments. Once the references have been considered by the landlord, he will confirm whether he wishes to proceed with the lease transfer.

2. Licence to assign

The licence to assign will be drafted by the landlord’s solicitor. The licence to assign is a legal document through which the landlord gives the current tenant (assignor) the permission to assign the lease to the new tenant (assignee).

3. Deed of assignment

The deed of assignment will be drafted by the assignor’s solicitor and sent to the assignees solicitor for approval, this document transfers the interest in the lease from the assignor to the assignee.

4. Authorised Guarantee Agreement

If the lease was taken on by the original tenant after the 1st January 1996, the likelihood is it contains a provision that requires the tenant to sign an Authorised Guarantee Agreement. This is a document that is drafted by the landlord’s solicitor which requires the assignor to guarantee that the rent and service charges will be paid by the assignee.

5. Rent Deposit Deed

On the basis that there is a rent deposit payable for the lease, the landlord and the assignee must sign the above document. This is drafted by the landlord’s solicitor and sent to the assignees solicitor for approval.

6. Transfer Deed (TR1)

Providing the lease is registered with Land Registry and there are more than 7 years remaining on the term of the lease, the assignor and assignee will need to sign the TR1 form, this is drafted by the assignees solicitor and approved by the assignor’s solicitor.

If you need any assistance with a residential or commercial property matter, contact our Property Department and speak to one of our solicitors who will be happy to assist you.

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