Commercial Lease Assignment Process
The process of assigning a commercial lease involves many steps, including reviewing the lease terms, finding an assignee, and getting the landlord's consent.
This detailed guide explains every step of the lease assignment process, from landlord approval to finalising the deed of assignment.
If you have any questions about the lease assignment process or need help with the deed of assignment, call us today at 0203 959 7755 or fill in our online contact form to schedule a consultation.
Table of Contents
- What is a commercial lease assignment?
- How does assigning a lease differ from subletting?
- What steps are involved in assigning a commercial lease?
- How long does the assignment process take?
- What information does the landlord need for approval?
- What is an Authorized Guarantee Agreement (AGA)?
- Do you need a solicitor to assign a lease?
- How much do solicitors charge for the assignment of a commercial lease?
- How to contact our commercial lease solicitors?
What is a commercial lease assignment?
Commercial Lease assignment is a legal process of transferring a commercial property lease from an existing tenant (assignor) to a new tenant (assignee).
The assignee takes over the lease under the same terms and conditions, while the original tenant is typically released from any further obligations. However, the landlord must approve the transfer for it to proceed.
How does assigning a lease differ from subletting?
In a lease assignment, the original tenant (assignor) transfers all rights and obligations to a new tenant (assignee), exiting the lease entirely.
In contrast, with subletting, the original tenant remains responsible for the lease but rents out the property to another party, who pays rent to the original tenant instead of the landlord.
What steps are involved in assigning a commercial lease?
The process for assigning a commercial lease typically involves the following steps:
- Review the Lease Agreement
- Find a Suitable Assignee
- Obtain Landlord Approval
- Draft the Assignment Agreement
- Execute a Deed of Assignment
- Register the Assignment (if applicable)
Step 1: Review the Lease Agreement
First, you must review the terms of your commercial lease agreement to identify any restrictions or conditions related to transferring or assigning the lease.
During this stage, it is advisable to consult a commercial lease solicitor to understand the terms of the commercial lease agreement and assignment clause.
Step 2: Find a Suitable Assignee
An existing tenant (assignor) must find a new tenant (assignee), whether an individual or business, who meets the landlord's criteria to take over the lease.
The assignee should be financially capable of paying the rent and a good match for the location.
Step 3: Obtain Landlord Approval
Most leases require the landlord's consent for a transfer. The existing tenant (assignor) must get written consent from the landlord to assign the lease. Failure to do so can result in legal action being taken against you.
You must review your existing lease agreement for any clauses relating to lease assignment and follow the process outlined by your landlord.
Step 4: Draft the Assignment Agreement
After getting the landlord's approval, draft a formal assignment agreement. It should outline the transfer date, the new tenant's rights and responsibilities, and any continuing obligations of the original tenant, such as providing an Authorized Guarantee Agreement (AGA).
If you need assistance with drafting or reviewing assignment agreements, feel free to contact our commercial lease solicitors in London at 0203 959 7755.
Step 5: Execute a Deed of Assignment
Once the agreement is reviewed and approved by all parties, the landlord, the original tenant (assignor), and the new tenant (assignee) can sign a Deed of Assignment to complete the transfer.
It legally moves the lease from the original tenant to the new one.
Step 6: Register the Assignment (if applicable)
If the lease is registered with the Land Registry, the new tenant must register the assignment.
Our experienced solicitors can guide you through the lease assignment agreement process, ensuring a smooth and successful transition. Contact us at 0203 959 7755 to learn more about how we can assist with your commercial lease assignment needs.
How long does the assignment process take?
The time required to assign a commercial lease can vary from a few weeks to several months, depending on several factors, including:
- How complex the lease terms are.
- How quickly the landlord consents to the assignment.
- The responsiveness of third-party solicitors in finalising the paperwork.
- The time taken to review and incorporate any agreed-upon amendments.
What information does the landlord need for approval?
Landlords want to know about the new tenant. They might ask for:
- Financial statements or proof of income.
- Details about the business and plans.
- References or guarantors (if needed).
A landlord can only refuse a lease assignment for valid reasons, such as:
- if the new tenant is unable to pay.
- if the business is unsuitable for the property.
- if the new tenant fails to meet the lease conditions.
What is an Authorized Guarantee Agreement (AGA)?
An Authorized Guarantee Agreement (AGA) is a type of guarantee in which the current tenant (assignor) of a commercial lease agrees to ensure the new tenant (assignee) fulfils the lease obligations if the lease is transferred before its term ends.
It is common for the lease terms to provide that the outgoing tenant must enter into the AGA.
Do you need a solicitor to assign a lease?
The process of commercial lease assignment can be complex, and seeking professional legal advice from a specialist commercial lease solicitor is essential.
Commercial lease solicitors play a vital role in the lease assignment process, ensuring that all documentation is complete and legally compliant.
With years of experience in the field, we at Moeen & Co. Solicitors can provide the necessary guidance and support for a smooth lease assignment.
The benefits of choosing Moeen & Co. Solicitors
- Top-quality advice from highly experienced commercial lease solicitors.
- A proactive approach to finding cost-effective solutions for your business.
- A client-focused service tailored to your unique needs.
- Clear communication and transparency throughout the process.
- Our commercial lease solicitors provide legal services on a fixed fee basis without blowing your budget and with no hidden costs.
- We are authorised and regulated by the Solicitors Regulation Authority (SRA), so you know you are in safe hands.
By consulting Moeen & Co. Solicitors, you can rest assured that your lease assignment is in good hands. Call us today at 0203 959 7755 to discuss your lease assignment needs and schedule a consultation.
How much do solicitors charge for the assignment of a commercial lease?
Our lease solicitors in Hayes, London charge an affordable fixed fee between £1000-£1500 for our legal services regarding the assignment of the commercial lease.
By choosing our fixed fee services, you can have the peace of mind that there will be no hidden costs or surprises. We believe in transparency and making the lease assignment process as smooth as possible.
How to contact our commercial lease solicitors?
If you require assistance with assigning your lease, contact our commercial lease solicitors in London at 0203 959 7755 or complete our enquiry form.
There are several ways to contact our solicitors based in Hayes, London:
- Phone - Call us on 0203 959 7755
- Email us - info@moeenco.com
- Online - Fill in our online enquiry form
- Visit our office - Room 1, The Winning Box, 27-37 Station Road, Hayes UB3 4DX
We are located near Hayes and Harlington Station on Hayes High Street, in Hayes Town Centre.
Legal Disclaimer
The information provided is for general informational purposes only and should not be taken as legal advice. While we make every effort to ensure accuracy, the law may change, and the information may not reflect the most current legal developments. No warranty is given regarding the accuracy or completeness of the information, and we do not accept liability in such cases. We recommend consulting with a qualified lawyer at Moeen & Co. Solicitors before making any decisions based on the information provided on this website.