If you are taking on an existing commercial or business lease then here is a brief overview of the process.
1.Â Obtain and provide the Landlord your references
You will need to obtain bank and trade references. This is to show the Landlord that you are likely to be reliable with your rental payments. Once the Landlord has considered the references, he will confirm if he will consent to the lease transfer.
2.Â Drafting the Licence to Assign
The Landlord’s solicitor will draft the Licence to Assign. This is the legal document by which the Landlord gives the current tenant (Assignor) the permission assign the lease to the new tenant (Assignee). The draft is sent to the Assignor’s solicitor who will check it and approve it.
3.Â Drafting the Deed of Assignment
The Assignor’s solicitor will draft the Deed of Assignment. This is the document which transfers an interest – the lease – from the Assignor to the Assignee. The draft Deed will be sent to the Assignee’s solicitor for approval.
4.Â Drafting an Authorised Guarantee Agreement
If the lease was entered into after 1st January 1996, it is likely to contain provisions which allow the landlord to ask the Assignor to sign an Authorised Guarantee Agreement. This means that the Assignor guarantees the rents and service charges will be paid by the Assignee. The Landlord’s solicitor will drat the Agreement and send it to the Assignor’s solicitor for approval.
5.Â Drafting the Rent Deposit Deed
If there is a rent deposit payable for the lease, then the Assignee and the Landlord will need to sign a fresh Rent Deposit Deed to cover this. The Landlord’s solicitor will draft this document and send it to the Assignee’s solicitor for approval.
6.Â Drafting the Transfer Deed (TR1)
If the lease is registered with the Land Registry and there are 7 years of more remaining in the lease term, then the Assignor and Assignee will need to sign the Transfer Deed. The Assignee’s solicitor will draft the Deed and send it to the Assignor’s solicitor for approval.
If you want to take on an existing commercial or business lease, then get in touch with our Commercial Property Department and speak to one of our specialists who will be happy to help and advise.