registering an assignment of a lease

Lease Assignment Agreement

Jump to section.

A lease assignment agreement is a legally binding contract outlining the terms and conditions of transferring a lease from one party to another in one place. This means the assignee becomes the new tenant and assumes all the rights, obligations, and liabilities under the original lease. Lease assignments are commonly used in real estate transactions when a tenant wants to transfer their lease to another party before the lease term expires. We will discuss the lease assignment agreements' purpose, key elements, and other relevant aspects.

Key Elements of a Lease Assignment Agreement

A lease assignment agreement includes several key elements outlining the terms and conditions of the lease transfer. These elements may vary depending on local laws and specific circumstances but generally include the following:

• Parties: The lease assignment agreement should clearly identify the parties involved, including the original tenant (assignor), the new tenant (assignee), and the landlord.
• Property: The agreement should specify the property subject to the lease assignment, including the address, unit number, and relevant details.
• Terms: The agreement should state the lease assignment's effective date, the original lease's remaining term, and any renewal or termination provisions.
• Rights and Obligations: The agreement should outline the rights and obligations of the assignor, assignee, and landlord, including rent payments, maintenance responsibilities, and any other lease terms that will carry over to the assignee.
• Consent: In most cases, the lease assignment agreement requires the landlord's written consent. The agreement should specify the conditions and process for obtaining landlord consent.
• Indemnification: The agreement may include provisions for indemnifying the landlord against any losses or damages resulting from the lease assignment.
• Governing Law : The agreement should specify the governing law and jurisdiction applicable to any disputes or legal matters related to the lease assignment.

Legal Implications of Lease Assignment Agreements

Lease assignments have legal implications for all parties involved. It is important to understand the potential legal risks and obligations associated with lease assignments. For tenants, it may be necessary to review the original lease agreement and seek legal advice to ensure compliance with the terms and conditions of the lease assignment. Landlords should carefully review and approve lease assignments to protect their rights and interests. In some jurisdictions, landlords may have the right to reject a proposed lease assignment for valid reasons.

Practical Tips for Managing Lease Assignment Agreements

Lease assignments can be complex, and it is important for tenants and landlords to approach them with caution. Here are some tips for navigating lease assignments:

For Tenants

• Review the Original Lease Agreement: Understand the terms and conditions of the original lease before entering into a lease assignment agreement.
• Seek Legal Advice: Consider consulting with a real estate attorney to ensure compliance with local laws and protect your rights and interests.
• Obtain Written Consent from the Landlord: Follow the process outlined in the lease assignment agreement to obtain written consent from the landlord before proceeding with the assignment.
• Communicate with all Parties Involved: Keep open communication with the assignee, assignor, and landlord throughout the process to avoid misunderstandings or disputes.
• Fulfill Obligations under the Original Lease: Even after the lease assignment, the assignor may still be responsible for fulfilling their obligations under the original lease until the effective date of the assignment.

For Landlords

• Review the Lease Assignment Carefully: Carefully review the proposed lease assignment agreement, including the terms and conditions, rights and obligations of the assignor and assignee, and any indemnification provisions.
• Require Written Consent: Insist on obtaining written consent from the assignor and assignee before allowing the lease assignment to proceed, as this protects your rights and interests as a landlord.
• Verify Financials and Credentials of Assignee: Conduct thorough due diligence on the proposed assignee's financials and credentials to ensure they can fulfill the lease obligations.
• Update Lease Documentation: Once the lease assignment is approved, update the lease documentation to reflect the new tenant (assignee) and provide copies to all parties involved.
• Communicate with all Parties Involved: Maintain open communication with the assignor, assignee, and any property management or legal professionals involved in the lease assignment process to ensure a smooth transition.

Potential Risks and Considerations

There are potential risks and considerations that tenants and landlords should be aware of when it comes to lease assignments. These may include:

• Non-Compliance with the Original Lease: If the assignee fails to comply with the terms and conditions of the original lease, the assignor may still be held liable for any breaches.
• Landlord's Right to Reject: In some jurisdictions, landlords may have the right to reject a proposed lease assignment for valid reasons, such as the assignee's inability to meet financial obligations or lack of appropriate credentials.
• Indemnification Provisions: The lease assignment agreement may include indemnification provisions that hold the assignor and assignee responsible for any losses or damages resulting from the lease assignment.
• Legal Disputes: Disputes may arise during the lease assignment process, such as disagreements over the terms and conditions, consent requirements, or other related matters.
• Local Laws and Regulations: Lease assignments are subject to local laws and regulations, which may vary by jurisdiction. It is important to ensure compliance with applicable laws and seek legal advice.

Key Terms for Legal Assignment Agreements

• Consideration: Refers to the value or benefit each party receives in exchange for entering into the assignment agreement.
• Assignment: The transfer of rights or obligations from one party (assignor) to another (assignee) as agreed upon in the assignment agreement.
• Consent: The requirement for obtaining permission or agreement from relevant parties, such as the original contracting parties, for the assignment to occur.
• Indemnity : The legal protection provided by the assignor to the assignee against any potential losses, liabilities, or claims arising from the assignment.
• Governing Law: The jurisdiction or legal system that governs the interpretation, validity, and enforcement of the assignment agreement, which is typically specified in the agreement itself.

Final Thoughts on Legal Assignment Agreements

A lease assignment agreement is a legally binding contract allowing tenants to transfer their lease rights and responsibilities to another party. It is important for both tenants and landlords to carefully review and understand the terms and conditions of a lease assignment, seek legal advice if needed, and maintain open communication throughout the process. By following the appropriate steps and considering potential risks and considerations, lease assignments can be a useful tool for tenants and landlords to manage their lease agreements effectively.

However, you need the help of a professional lawyer to ensure you do not end up messing up a lease assignment agreement. So, ensure you approach an experienced attorney who is well-versed in the field.

If you want free pricing proposals from vetted lawyers that are 60% less than typical law firms, click here to get started. By comparing multiple proposals for free, you can save the time and stress of finding a quality lawyer for your business needs.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

Need help with a Lease Assignment Agreement?

Meet some of our lease assignment agreement lawyers.

15 years for legal experience; expertise in contracts, healthcare, ERISA, physicians, financial services, commercial contracts, employment agreements, etc. I am adept at all contracts and can provide you with efficient and quality services. I have worked at a law firm, financial services company, consulting ,and non-profit.

An experienced commercial contracts attorney with sales, leasing, NDA, SEC compliance, corporate governance, commercial real estate, and employment experience. Also well versed in internal and external policy document and manual creation.

As a licensed AL lawyer with over 7 years of experience in the legal field, I have spent more than 15 years working in the business and finance sector. I am deeply passionate about immigration, contracts, & my expertise spans a wide range of projects. From handling ICOs & IPOs to navigating VCs, SaaS, OnlyFans, Wholesaler & Manufacturing Agreements, Prenups, Movie Finance, M & As, Visas, Green Cards and more. I have a comprehensive understanding of various contractual needs. Whatever your contract requirements may be, feel free to reach out to me—I can craft or work on any contract with precision and expertise.

Tayane M. Oliveira is a founding partner at Vannucci Oliveira. With a concentration in family law, Tayane is renowned for her commitment to providing compassionate yet powerful representation to her clients. Her experience as an associate attorney at Brodzki Jacobs & Brook, coupled with her unwavering dedication to her clients' welfare, prepared her for her current role at Vannucci Oliveira. Tayane's academic achievements are a testament to her rigorous intellectual curiosity and dedication to her profession. She graduated with a Bachelor of Arts degree in Criminal Justice, supplemented by a minor in Psychology, from Florida Atlantic University in 2013. The culmination of her academic pursuit came in 2017, when she earned her Juris Doctor degree, cum laude, from the esteemed Nova Southeastern University's Shepard Broad College of Law. Before co-founding Vannucci Oliveira, Tayane honed her skills in the heat of the courtroom, representing clients in an array of general civil litigation matters. This diversified exposure instilled in her an ability to tackle complex legal challenges, a skill she employs to benefit her clients in family law. Originally from Brazil, Tayane brings an international perspective to her practice. When not delving into legal briefs or advocating for her clients, she indulges in travelling, reading, spoiling her puppies, and exercising, activities that not only rejuvenate her but also provide her with a broader perspective on the world and her practice. *Supreme Court Certified Portuguese Speaking Mediator

P. McCoy Smith is the Founding Attorney at Lex Pan Law LLC, a full-service technology and intellectual property law firm based in Portland, Oregon, U.S.A and Opsequio LLC, an open source compliance consultancy. Prior to his current position, he spent 20 years in the legal department of a Fortune 50 multinational technology company as a business unit intellectual property specialist; among his duties was setting up the free & open source legal function and policies for that company. He preceded his in-house experience with 8 years in private practice in a large New York City-based boutique intellectual property law firm, working simultaneously as a U.S. patent litigator and U.S. patent prosecutor. He was also a patent examiner at the U.S. Patent & Trademark Office prior to attending law school. He is licensed to practice law in Oregon, California & New York and to prosecute patent applications in the U.S. Patent & Trademark Office; he is also a registered Trademark and Patent Agent with the Canadian Intellectual Property Office. He has degrees from Colorado State University (Bachelor of Science, Mechanical Engineering, with honors), Johns Hopkins University (Masters of Liberal Arts) and the University of Virginia (Juris Doctor). While in private practice, and continuing into his in-house career, he taught portions of the U.S. patent bar exam for a long-standing and well-known patent bar exam preparation course, and from 2014-2020 was on the editorial board of the Journal of Open Law, Technology & Society (JOLTS), and starting in 2023 will be on the editorial board of the American Intellectual Property Law Quarterly Journal (AIPLAQJ). He is the author or co-author of chapters on open source and copyright and patents in “Open Source Law, Policy & Practice” (2022, Oxford University Press). He lectures frequently around the world on free and open source issues as well as other intellectual property topics.

Eliza brings a distinguished track record of delivering outstanding results for her clients, showcasing expertise across a spectrum of legal areas. Eliza is not just an attorney; she's your dedicated advocate with a proven record of achieving excellent results for her clients. Her representation spans numerous family law cases, including dissolutions, custody, support, probate, and civil litigation matters. Eliza's unique background as a Registered Nurse and licensed Attorney sets her apart. Before establishing her law practice, she served as a Registered Nurse in various hospitals across Los Angeles and the Bay Area. Notably, she contributed to prominent institutions such as Los Angeles County Public Health and the City of Anaheim. Additionally, Eliza ventured into entrepreneurship, managing her own Professional Fiduciary and Consulting business. Her legal acumen extends to civil litigation, personal injury, medical malpractice, nursing home abuse, worker's compensation, and family law matters. Eliza earned her Bachelor's Degree in Nursing and Public Health from CSU Dominguez Hills. In 2008, she furthered her education, obtaining a Master's Degree in Nursing, Administration, and Healthcare Management, along with a Quality Improvement Certificate. Eliza culminated her academic journey by earning her law degree from the JFK University of Law in 2016. Eliza's multidisciplinary background uniquely positions her to navigate the intricacies of legal matters, offering a comprehensive and compassionate approach to her client's diverse needs. Eliza's diverse background uniquely positions her to understand and address your legal needs comprehensively. Trust her to navigate your case with care and dedication, ensuring you receive the support you deserve.

Committed to a career in advocacy as an attorney, educator, and consultant, I specialize in education, family, personal injury, and criminal law. While at John Rue & Associates LLC, I led litigation and alternative dispute resolution, handling complex class-action lawsuits involving discrimination, privacy, administrative, and education law. I also directed conflict resolution through mediation, reducing costs and securing favorable client outcomes. While in law school, I served as a law clerk at Wilson Elser, excelling in crafting answers, overseeing discovery, attending depositions, and conducting exhaustive legal research. My responsibilities extended to preparing deposition summaries, assisting in motion practice, drafting persuasive briefs, evaluating cases, and contributing to trial preparations. I thrived in managing client affairs, supporting colleagues, and ensuring compliance with relevant laws. I am eager to explore opportunities to contribute my skills and passion to impactful projects aligned with client needs. I look forward to discussing opportunities and demonstrating how my qualifications will meet client needs.

Find the best lawyer for your project

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

Real Estate lawyers by top cities

• Austin Real Estate Lawyers
• Boston Real Estate Lawyers
• Chicago Real Estate Lawyers
• Dallas Real Estate Lawyers
• Denver Real Estate Lawyers
• Houston Real Estate Lawyers
• Los Angeles Real Estate Lawyers
• New York Real Estate Lawyers
• Phoenix Real Estate Lawyers
• San Diego Real Estate Lawyers
• Tampa Real Estate Lawyers

Lease Assignment Agreement lawyers by city

• Austin Lease Assignment Agreement Lawyers
• Boston Lease Assignment Agreement Lawyers
• Chicago Lease Assignment Agreement Lawyers
• Dallas Lease Assignment Agreement Lawyers
• Denver Lease Assignment Agreement Lawyers
• Houston Lease Assignment Agreement Lawyers
• Los Angeles Lease Assignment Agreement Lawyers
• New York Lease Assignment Agreement Lawyers
• Phoenix Lease Assignment Agreement Lawyers
• San Diego Lease Assignment Agreement Lawyers
• Tampa Lease Assignment Agreement Lawyers

ContractsCounsel User

Review Cell Tower Lease Agreement and advice

Location: north carolina, turnaround: less than a week, service: contract review, doc type: lease agreement, page count: 23, number of bids: 7, bid range: $499 - $1,500, review amendment to cell tower lease agreement, location: texas, page count: 10, bid range: $30 - $1,500, want to speak to someone.

Get in touch below and we will schedule a time to connect!

Find lawyers and attorneys by city

Cookies on GOV.UK

We use some essential cookies to make this website work.

We’d like to set additional cookies to understand how you use GOV.UK, remember your settings and improve government services.

We also use cookies set by other sites to help us deliver content from their services.

You have accepted additional cookies. You can change your cookie settings at any time.

You have rejected additional cookies. You can change your cookie settings at any time.

Register to vote Register by 18 June to vote in the General Election on 4 July.

• Housing, local and community
• Housing and communities
• Leases: when to register (PG25)

Practice guide 25: leases - when to register

Updated 7 March 2024

Applies to England and Wales

© Crown copyright 2024

This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: [email protected] .

Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.

This publication is available at https://www.gov.uk/government/publications/leases-when-to-register/practice-guide-25-leases-when-to-register

Please note that HM Land Registry’s practice guides are aimed primarily at solicitors and other conveyancers. They often deal with complex matters and use legal terms.

1. Introduction

The Land Registration Act 2002, together with the Land Registration Rules 2003, changes the categories of leases that are now either compulsorily or voluntarily registrable, and also the leases that we can note.

Not every leasehold estate is capable of being registered with its own title, but the Land Registration Act 2002 substantially extends the scope of title registration, for example, many more business leases will be subject to compulsory registration.

The information within this guide applies to:

• leases dated on or after 13 October 2003
• leases existing before 13 October 2003
• assignments, transfers (on sale, by way of gift or by order of court) or assents, including vesting assents, dated on or after 13 October 2003, of existing leasehold estates having more than seven years of the term left to run
• first legal mortgages dated on or after 13 October 2003
• giving effect to a partition of land subject to a trust of land
• by a deed that appoints, or by virtue of section 334 of the Charities Act 2011 has effect as if it appointed, a new trustee or is made in consequence of the appointment of a new trustee
• by a vesting order under section 44 of the Trustee Act 1925 that is consequential on the appointment of a new trustee.

See also practice guide 62: easements for details of the registration requirements in respect of easements granted in leases.

2. How to apply the Land Registration Act 2002 and Land Registration Rules 2003: compulsory registration

Section 4 of the Land Registration Act 2002 specifically sets out the circumstances when an application for first registration must be made.

The estate owner, or their successor in title, must apply for first registration – see section 6(1) of the Land Registration Act 2002.

The period for registration is two months from the date of the deed inducing registration – see section 6(4) of the Land Registration Act 2002. However, an order can be made to extend the period of registration – see section 6(5) of the Land Registration Act 2002.

Section 27(2)(b) of the Land Registration Act 2002 specifically sets out the circumstances when leases out of a registered title must be registered.

Section 4(5A) of the Land Registration Act 2002 exempts relevant social housing tenancies from compulsory registration, regardless of term.

2.1 New leases granted for a term of more than seven years out of unregistered land

See section 4(1)(c) of the Land Registration Act 2002.

Leases granted for a term of more than seven years from the date of the grant, out of either an unregistered freehold or leasehold estates, will be compulsorily registrable provided they are either:

• for valuable or other consideration – that under section 4(6) of the Land Registration Act 2002 includes estates that have a negative value
• grants for the purpose of setting up a trust, where the person setting up the trust, ‘the settlor’, does not retain the whole of the beneficial interest
• transfers of the legal title to the beneficial owners, where the settlor did not retain the whole of the beneficial interest when the trust was set up
• pursuant to an order of any court

2.2 New leases for a term of more than seven years out of a registered title

See section 27(2)(b)(i) of the Land Registration Act 2002.

Leases granted out of existing registered titles, that are for a term of more than seven years from the date of the grant are compulsorily registrable.

2.3 Transfers or assignments of unregistered leases having more than seven years of the term unexpired

See sections 4(1)(a), 4(1)(aa) (as introduced by the Land Registration Act 2002 (Amendment) Order 2008) and 4(2)(b) of the Land Registration Act 2002.

Transfers or assignments of unregistered leases, that at the time of the transfers (or assignments) have more than seven years to run, are compulsorily registrable if they are made either:

• transfers for the purpose of setting up a trust, where the person setting up the trust, ‘the settlor’, does not retain the whole of the beneficial interest
• by means of an assent – including a vesting assent
• to give effect to a partition of land subject to a trust of land
• by a deed that appoints, or by virtue of section 334 of the Charities Act 2011 has effect as if it appointed, a new trustee or that is made in consequence of the appointment of a new trustee
• by a vesting order under section 44 of the Trustee Act 1925 that is consequential on the appointment of a new trustee

Note: Not all transfers or assignments attract compulsory registration.

The following are specific types of transfer or assignment that are not subject to compulsory registration

• however, a transfer by operation of law that is within section 4(1)(aa) of the Land Registration Act 2002, such as, when property vests in a new trustee by an express vesting declaration, or one that is implied, under section 40 of the Trustee Act 1925 in a deed appointing a new trustee, is subject to compulsory registration
• an assignment of a mortgage term, ie mortgage by demise – see section 4(4)(a) of the Land Registration Act 2002
• an assignment or surrender of a lease to the owner of the immediate reversion where the term is to merge into that reversion – see section 4(4)(b) of the Land Registration Act 2002

2.4 Transfers or assignments of unregistered leases where section 171A of the Housing Act 1985 applies

See section 4(1)(b) of the Land Registration Act 2002.

All transfers of unregistered leases, irrespective of the length of the term of the lease, made pursuant to section 171A of the Housing Act 1985 (Preserved Right to Buy) are compulsorily registrable.

2.5 Transfers of any registered leases

See section 27(2)(a) of the Land Registration Act 2002.

Most transfers of registered leases, irrespective of the length of the term of the lease, are compulsorily registrable. However, the following transfers by operation of law are not required to be registered:

• a transfer on the death or bankruptcy of an individual proprietor
• a transfer on the dissolution of a corporate proprietor

2.6 Right to buy leases: Part V of the Housing Act 1985

See sections 4(1)(e) and 27(2)(b)(iv) of the Land Registration Act 2002.

All leases, irrespective of the length of the term of the lease, made pursuant to Part V of the Housing Act 1985 are compulsorily registrable.

2.7 Leases where section 171A of the Housing Act 1985 applies

See sections 4(1)(f) and 27(2)(b)(v) of the Land Registration Act 2002.

All leases, irrespective of the length of the term of the lease, made pursuant to section 171A of the Housing Act 1985 (Preserved Right to Buy) are compulsorily registrable.

2.8 Reversionary leases taking effect more than three months from the date of the grant

See sections 4(1)(d) and 27(2)(b)(ii) of the Land Registration Act 2002.

A ‘reversionary’ lease gives the lessee a right to possession of the leased property in the future, ie the lessee does not have an immediate right to possession of the land in the lease, at the date of the lease.

A lease granted out of either an:

• unregistered leasehold estate, that at the date of grant has more than seven years left to run
• unregistered freehold estate
• existing registered title

that is granted for any term to take effect more than three months from the date of the grant is compulsorily registrable.

2.9 Discontinuous leases out of registered titles or granted for a term of more than seven years out of unregistered land

See section 27(2)(b)(iii) of the Land Registration Act 2002.

These are leases where the lessee’s ‘right to possession’ of the land demised is discontinuous. The lease may be of a property, such as, a flat, apartment or market stall, that is for either:

• a specified number of days in a week, for example, every Monday to Friday (inclusive)
• a specific week(s) in a calendar year

All discontinuous leases granted out of a registered title must be registered, regardless of the term.

Discontinuous leases granted for a term of more than seven years out of unregistered freehold or leasehold estates will be compulsory registrable.

See sections 4(1)(c) and 4(2)(b) of the Land Registration Act 2002 and see New leases granted for a term of more than seven years out of unregistered land .

To calculate the length of the term on such a lease, multiply the number of complete weeks each year the property is demised by the number of years granted.

If the total is more than seven years (ie more than 364 complete weeks), the lease and/or transfer will be compulsorily registrable.

2.10 Protected first legal mortgage

See sections 4(1)(g) and 4(2)(b) of the Land Registration Act 2002 and rules 21 and 22 of the Land Registration Rules 2003.

A protected first legal mortgage of an unregistered leasehold estate, that has more than seven years of its term unexpired, is subject to compulsory first registration. In order for such a mortgage to be registered, the leasehold estate will also need to be registered. Rule 21 of the Land Registration Rules 2003 allows a mortgagee of a protected first legal mortgage to apply to have the leasehold estate registered, whether or not the mortgagor consents to the application.

Note 1: A ‘protected mortgage’ is a mortgage that is protected by the deposit of documents relating to the mortgaged estate – see section 4(8)(a) of the Land Registration Act 2002.

Note 2: A ‘first legal mortgage’ is a legal mortgage that ranks in priority over all other mortgages affecting the mortgaged estate – see s.4(8)(b) of the Land Registration Act 2002.

3. How to apply the Land Registration Act 2002 and Land Registration Rules 2003: voluntary registration

Section 3 of the Land Registration Act 2002 gives details of when an application can be made to voluntarily register an unregistered leasehold estate.

Section 3(4A) of the Land Registration Act 2002 specifically excludes relevant social tenancies from being eligible for voluntary registration.

The following sections mainly apply to leases that are made before 13 October 2003 and when no events requiring registration have occurred. However, some of the sections will also apply to some leases that are granted on or after 13 October 2003, that can be registered but may not be subject to compulsory registration. For example, see Discontinuous leases out of unregistered land .

The following sections give details of the leasehold estates in land that can be lodged voluntarily for first registration.

3.1 Leases having more than seven years of their term unexpired

See section 3(3) of the Land Registration Act 2002.

Most leases will be accepted for registration, provided there is more than seven years of the original term left unexpired at the time of first registration. If the lease is granted on or after 13 October 2003 it will be subject to compulsory registration – see New leases granted for a term of more than seven years out of unregistered land .

Where a lessee holds a lease in possession but is granted another lease of the same land, to take effect in possession on or within one month of the expiry of the first lease, the two terms can be treated as creating one continuous term – see section 3(7) of the Land Registration Act 2002. Therefore, if the two terms total more than seven years, we will accept a voluntary application for registration of both leases, that will be registered together on the same title.

Note: Section 3(7) of the Land Registration Act 2002 only provides that such leases can be treated as creating one continuous term for the purposes of voluntary registration. There is no provision that such leases are to be treated as one continuous term for the purposes of compulsory registration.

3.2 Discontinuous leases out of unregistered land

See section 3(4) of the Land Registration Act 2002. This provision is new under the Land Registration Act 2002.

See Discontinuous leases out of registered titles or granted for a term of more than seven years out of unregistered land as to what constitutes a ‘discontinuous’ lease, and how to calculate the length of the term of the lease.

A voluntary application will be accepted, regardless of the length of the term, ie the lease does not have to be for more than seven years (364 weeks). However, if a discontinuous lease is granted on or after 13 October 2003, or a transfer of a discontinuous lease is made on or after 13 October 2003, it must be registered if it falls within sections 4(1)(c) and 4(1)(a) of the Land Registration Act 2002 – see New leases granted for a term of more than seven years out of unregistered land and Transfers or assignments of unregistered leases having more than seven years of the term unexpired .

If the total is more than seven years (ie more than 364 complete weeks) the lease and/or transfer will be compulsorily registrable.

4. How to apply the Land Registration Act 2002 and Land Registration Rules 2003: leases that cannot be registered

Section 3(5) of the Land Registration Act 2002 specifically details when we cannot accept an application to register a leasehold estate, ie if the estate owner (the applicant) has the leasehold estate vested in them as a mortgagee, where there is a subsisting right of redemption.

The following sections give details of the leasehold estates in land that cannot be lodged for registration.

4.1 Leases granted for a term of seven years or less or where the unexpired term is for seven years or less

Unless they fall into one of the exceptions below, which are registrable regardless of their term, the following leases are not registrable (Sections 3(3), 4(1)(c) and 27(2)(b)(i) of the Land Registration Act 2002).

(i) Leases out of registered or unregistered land, where the term unexpired at the date of the grant is 7 years or less.

(ii) Unregistered leasehold estates subject to transfer or assignment which have 7 years or less of the term unexpired at the date of the disposition.

(iii) Applications for voluntary first registration of a leasehold estate where the unexpired portion of the term is 7 years or less at the date of the application.

Note: The following are exceptions to this and these leases can be registered irrespective of their term.

• right to buy leases, pursuant to Part V of the Housing Act 1985
• preserved right to buy leases pursuant to section 171A of the Housing Act 1985
• discontinuous leases
• an unregistered freehold estate
• an unregistered leasehold estate in land for a term that at the time of the grant of the lease has more than seven years left to run
• a registered title.

Note: Some of these leases are compulsorily registrable. See How to apply the Land Registration Act 2002 and Land Registration Rules 2003: compulsory registration for further details.

4.2 Lease term starts more than 21 years from date of lease

Usually a lease for which a rent or premium is payable where the term starts more than 21 years from the date of the lease is void – see section 149(3) of the Law of Property Act 1925. Therefore, such leases cannot be registered.

4.3 Leases with no certain start date

If the lease is silent as to the commencement date, we will normally assume (in the absence of other evidence) the term commences on the date of the lease.

4.4 Lessor and lessee are the same

The House of Lords decided that neither one person, nor a company, can create a lease in favour of the same person or company. Any attempt to do so is without legal effect (Rye v Rye [1962] A C 496). Therefore, we cannot give any kind of registered title to such a lease.

4.5 Public-Private Partnership ( PPP ) leases

A PPP lease is a lease that constitutes a ‘public-private partnership’ agreement – see sections 210 and 211 of the Greater London Authority Act 1999.

The lease will usually be between London Regional Transport, Transport for London or one of its subsidiaries and a private company, for the purpose of maintaining or providing a railway, such as, an underground railway.

PPP leases are not registrable - see sections 90(1), (2) and (3) of the Land Registration Act 2002.

They are classed as an interest that overrides both first registration and registered dispositions – see section 90(5) of the Land Registration Act 2002.

4.6 Leases vested in a person as a mortgagee: subsisting right of redemption

See section 3(5) of the Land Registration Act 2002.

A lease vested in a person as mortgagee where there is a subsisting right of redemption cannot be registered.

4.7 Relevant social housing tenancies

See sections 3(4A), 4(5A) and 27(5A) of the Land Registration Act 2002.

A relevant social housing tenancy (as defined in section 132(1) of the Land Registration Act 2002) cannot be registered.

5. How to apply the Land Registration Act 2002 and Land Registration Rules 2003: noting of leases

See sections 32, 33, 34, 37 and 38 of the Land Registration Act 2002.

Section 32 of the Land Registration Act 2002 allows us to note certain leases against the registered estate affected, ie lessor’s title.

5.1 Noting of leases granted out of registered titles on or after 13 October 2003

When an application is lodged for registration of a lease granted out of registered land that is required to be registered (see How to apply the Land Registration Act 2002 and Land Registration Rules 2003: compulsory registration for further details) no application is required to note the lease on the lessor’s registered title. Notice will automatically be entered in the lessor’s title by HM Land Registry, pursuant to section 38 of the Land Registration Act 2002.

5.2 Noting of leases on lessors’ registered superior titles following first registration

See rule 37 of the Land Registration Rules 2003.

An application to register a lease that was either:

• not granted out of a registered estate
• granted before the commencement of Land Registration Act 2002
• and was not previously compulsorily registrable (such as, a lease of more than seven years but for 21 years or less)

will be treated as an application for first registration.

Provided the lease can be noted – see Leases that we cannot note – HM Land Registry will automatically note the lease in the lessor’s registered superior title (if it is not already noted), subject to serving notice on the lessor – see rule 37(3) of the Land Registration Rules 2003. If the lessor’s consent is lodged with the application we will not need to serve notice on the lessor.

5.3 Noting of leases for more than three years

If a notice is not automatically made in the lessor’s title under section 38 of the Land Registration Act 2002 or rule 37(3) of the Land Registration Rules 2003 an application may be made for a notice to be entered if the lease:

• is granted for a term of more than three years from the date of the grant
• does not relate to a trust of land or a settlement under the Settled Land Act 1925

See sections 32, 33 and 34 of the Land Registration Act 2002.

See How to apply the Land Registration Act 2002 and Land Registration Rules 2003: compulsory registration , for details of leases that must be registered.

See Noting of leases for details on how an application is made.

Section 37 of the Land Registration Act 2002 also allows HM Land Registry to note leases of more than three years but not exceeding seven years in a registered superior title, even though the lease itself will be incapable of substantive registration.

5.4 Leases that we cannot note

See section 33 of the Land Registration Act 2002.

We cannot note the following in the register. Leases that are:

• See How to apply the Land Registration Act 2002 and Land Registration Rules 2003: compulsory registration , for details of leases that must be registered
• Note: This applies to any discontinuous leases that are not compulsorily registrable, where the total period is three years or less.
• Public–Private Partnership leases – see section 90(4) of the Land Registration Act 2002
• relevant social housing tenancies – see section 33(ba) of the Land Registration Act 2002

6. How to apply the Land Registration Act 2002 and Land Registration Rules 2003 and make applications to HM Land Registry

Original documents are normally required only if your application is a first registration.

A conveyancer may, however, make an application for first registration on the basis of certified copy deeds and documents only. For information about this, see practice guide 1: first registrations – Applications lodged by conveyancers – acceptance of certified copy deeds .

If your application is not a first registration, then we will need only certified copies of deeds or documents you send to us with HM Land Registry applications. Once we have made a scanned copy of the documents you send to us, they will be destroyed. This applies to both originals and certified copies.

However, any original copies of death certificates or grants of probate will continue to be returned.

6.1 First registration

The estate owner or their successor in title should apply for first registration – see section 6(1) of the Land Registration Act 2002.

The period for registration is two months from the date of the deed inducing registration – see sections 6(4) and (5) of the Land Registration Act 2002.

Applications must be lodged in form FR1 – see rule 23(1) of the Land Registration Rules 2003.

Rule 24, of the Land Registration Rules 2003 gives details of what must accompany an application for first registration, that is:

• sufficient details, by plan or otherwise, so that the land can be identified clearly on the Ordnance Survey map
• Note 1: If the plan, or sufficient details to identify the land, are included in the lease, a further plan will not be required
• Note 2: If the lease is a discontinuous lease, a copy of any ‘timeshare’ calendar defining the weeks referred to will be required, if it is not included in the lease

evidence that Stamp Duty Land Tax certificate (SDLT) or Land Transaction Tax (LTT) requirements have been met

• all deeds and documents relating to the title that are in the control of the applicant

Note: If absolute leasehold is requested in form FR1 and the evidence of the superior title(s) is not lodged, we will only register the applicant with good leasehold title. We will not raise a requisition for this evidence.

• a list in duplicate in form DL of all the documents delivered.

For more general information on lodging an application for first registration see practice guide 1: first registrations .

Advice on whether a particular transaction:

• requires to be notified to HM Revenue & Customs (HMRC) or the Welsh Revenue Authority (WRA) is exempt from SDLT or LTT (such as a legal charge)
• falls outside the scope of SDLT or LTT

can be obtained from:

• for SDLT, the HMRC stamp taxes helpline on 0300 200 3510, open 8.30am to 5pm Monday to Friday except public holidays or HMRC’s stamp taxes website
• for LTT: the WRA customer service centre on 03000 254 000, open 9.30am to 5.30pm Monday to Friday except public holidays or the WRA’s website

If the lease is granted to two or more persons and it either does not contain details, or contains conflicting information, as to whether a Form A restriction (see Schedule 4 to the Land Registration Rules 2003) is required, we will enter a restriction in Form A by default. If the lease is granted on or after 19 June 2006 and contains the prescribed clauses, a declaration of trust is contained in clause LR14. For further information see practice guide 24: private trusts of land .

Any restrictions, other than a Form A restriction, must be applied for in form RX1 – rule 92 of the Land Registration Rules 2003. For further information see practice guide 19: notices, restrictions and protection of third party interests . A restriction cannot be applied for in a lease however, from 9 January 2006, a lease containing clauses LR1 to LR14 of Schedule 1A, to the Land Registration Rules 2003 may be used, at clause LR13, to apply for entry of a standard form restriction. This will include prescribed clauses leases granted on or after 19 June 2006. An application for a non-standard restriction must always be made in form RX1. For further information see practice guide 64: prescribed clauses leases – section 5.13 LR13.

A leasehold register will include sufficient details of the lease being registered to enable it to be identified – see rule 6 of the Land Registration Rules 2003. Such details will no longer include any reference to the rent payable under a lease.

6.2 New leases out of a registered title

These applications must be lodged in form AP1 – rule 13 of the Land Registration Rules 2003.

A certified copy of the lease and the appropriate fee under the current Land Registration Fee Order must accompany the application (see HM Land Registry: Registration Services fees ).

The lease, if granted on or after 19 June 2006, must be a prescribed clauses lease. For further information, see practice guide 64: prescribed clauses leases .

The lease must be accompanied by evidence that SDLT or LTT requirements have been met.

If the lease is lodged for registration by a conveyancer who only represents the lender, we will require written confirmation from the conveyancer representing the tenant stating:

the address for service to be entered on the register; and

that, if the application was lodged by them on behalf of the tenant, they would be sufficiently satisfied they can provide the necessary confirmation of identity required by panels 12 and 13 of form AP1

If there is a mortgage registered on the landlord’s title you will need to enclose the consent of the mortgagee. Consent is always required where there is also a restriction in favour of the lender on the landlord’s title which ‘catches’ the lease application. Otherwise where the consent is not lodged, we will make the following entry in the property register of the new title:

“The title to the lease is, during the subsistence of the charge dated ….. in favour of ….. affecting the landlord’s title (and to the extent permitted by law, any charge replacing or varying this charge or any further charge in respect of all or part of the sum secured by this charge), subject to any rights that may have arisen by reason of the absence of chargee’s consent, unless the lease is authorised by section 99 of the Law of Property Act 1925.”

If the landlord’s title is leasehold enclose the consent of any superior landlord, if the superior lease requires such consent to be obtained. Where the consent of the superior landlord is not lodged we will make the following entry in the property register of the new title unless a conveyancer certifies that the new lease falls in a permitted category and is not caught by the terms of the alienation clause in the superior lease:

“The registrar has not seen any consent to the grant of this sub-lease that the superior lease out of which it was granted may have required.”

If the lease is granted to two or more persons and it either does not contain details, or contains conflicting information, as to whether a Form A restriction (see Schedule 4 to the Land Registration Rules 2003) is required, we will enter a restriction in Form A by default. If the lease is a prescribed clauses lease a declaration of trust is contained in clause LR14. For further information see practice guide 24: private trusts of land .

Any restrictions, other than a Form A restriction, must be applied for in form RX1 – rule 92 of the Land Registration Rules 2003. For further information see practice guide 19: notices, restrictions and protection of third party interests . A standard restriction cannot be applied for in a lease. However, from 9 January 2006, a lease containing clauses LR1 to LR14 of Schedule 1A to the Land Registration Rules 2003 may be used, at clause LR13, to apply for entry of a standard form restriction. This will include prescribed clauses leases granted on or after 19 June 2006. Form RX1 must continue to be used to apply for entry of a restriction contained in any other lease, or for entry of a non-standard form restriction. For further information see practice guide 64: prescribed clauses leases – section 5.13 LR13.

6.3 Noting of leases

See sections 33, 34 and 35 of the Land Registration Act 2002.

Note: Application to note a lease as an agreed or unilateral notice will not fulfil the registration requirements for legal easements. If the lease contains easements you should apply as directed in practice guide 62: easements – 4.2 Easements in unregistered leases.

6.3.1 Agreed notices

If a lease is not automatically noted under section 38 of the Land Registration Act 2002 or rule 37 of the Land Registration Rules 2003, and is not prevented from being noted (see Leases that we cannot note ), an application may be made for an agreed notice to be entered in the register affected by the interest by either:

• the person entitled to the benefit of the interest
• the registered proprietor of the land in which the notice is to be entered
• a person entitled to be registered as such proprietor, such as the personal representative of a sole registered proprietor

Such an application should be accompanied by:

• evidence that SDLT or LTT requirements have been met

Note: Before we can note any land transaction as an agreed or unilateral notice, HM Land Registry is obliged to ensure that the appropriate SDLT or LTT certificate accompanies the application where this is required. This is a statutory requirement under section 79(1) of the Finance Act 2003 and s.65(1) of the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017. See First registration for details.

• if the application is by a person entitled to be registered as proprietor, sufficient evidence to satisfy us of their interest
• if the application is not made by the registered proprietor or a person entitled to be registered as such proprietor, either the consent of such person, or sufficient evidence to satisfy the registrar as to the validity of the claim
• any appropriate consents of restrictioners

For further details see practice guide 19: notices, restrictions and protection of third party interests .

6.3.2 Unilateral notices

It may be possible to make an application for a unilateral notice to be entered on the lessor’s title when an agreed notice cannot be entered. For further details see practice guide 19: notices, restrictions and protection of third party interests .

6.3.3 Leases with less than one year to run

We will not note leases with less than one year to run. This is because, in the registrar’s view, entering notice of such a lease in the register is likely to cause inconvenience to HM Land Registry and our customers as application would have to be made within a year for its removal.

6.4 Deeds of variation

6.4.1 variation of a registered lease.

If lodging an application to register the variation of a lease when the lessee’s title is registered, it will usually be appropriate to make the application under rule 129 of the Land Registration Rules 2003, and, therefore, the application should be lodged in form AP1 – rule 13 of the Land Registration Rules 2003.

Under rule 129 of the Land Registration Rules 2003 you must provide sufficient evidence to show that the variation has effect at law. You must, therefore, lodge:

• the deed of variation, and
• consent(s) of any chargee or restrictioner if required, or
• where the lessor’s title is unregistered – evidence of the lessor’s title, and
• any other evidence to show that the variation has effect at law, such as, evidence of change of name of one of the parties if the name is not the same as that shown on the register

If we are satisfied that the variation has effect at law we will make an entry relating to the deed in the property register of the lessee’s title. We will also enter a notice in the lessor’s title, without a specific application being made in form AN1 in respect of the lessor’s title.

Note: If the chargee’s consent is not lodged when required, the following will be added to the register entry of the relevant titles:

“NOTE: The proprietor of the registered charge dated […] [of the landlord’s/tenant’s title number …] was not a party to the deed nor was evidence of its consent to the deed produced to the registrar.”

6.4.2 Variation of an unregistered lease

If notice of an unregistered lease is entered in a lessor’s title, an application may be made to enter a notice in respect of a variation of the lease. Such an application should usually be made for an agreed notice in form AN1 , if the deed of variation can be provided and the lease is already protected as an agreed notice. However, it may be appropriate in some circumstances to make an application in form UN1 , for example if the lease is already protected by way of unilateral notice and the lease or/and the deed of variation cannot be provided. For further details see practice guide 19: notices, restrictions and protection of third party interests .

Please note that where an application is being made for an agreed or unilateral notice following a deed of variation, the application can be made in respect of the lessor’s title only. This is because, under section 32(1) of the Land Registration Act 2002, a notice is an entry in the register “in respect of the burden of an interest affecting a registered estate”. The lease is clearly an interest burdening the lessor’s registered estate and so can be the subject of a notice in the lessor’s title; it can be argued that any deed of variation can also be noted as the entry is then “in respect of” this burden. But the lease is not an interest affecting the lessee’s estate: it is their estate. So the lease cannot be the subject of a notice in the lessee’s title; and nor, as a result, can the deed of variation be the subject of such a notice.

6.4.3 Application to note variation where it is not clear that the variation takes effect at law

It may be appropriate in some cases to apply for a notice in either:

in respect of a deed of variation even when the lease is substantively registered, as sufficient evidence may not be able to be provided to satisfy the registrar that the variation takes effect at law. For further details see practice guide 19: notices, restrictions and protection of third party interests .

Note: If the deed of variation contains easements, these will not operate at law until entries relating to the burden and benefit of the easement are entered in both registered titles – see section 27(1) and paragraph 7 of Schedule 2 to the Land Registration Act 2002.

6.4.4 Variation of term or extent

Although it is clear in law that the term of a lease cannot be extended by deed, deeds of variation are frequently encountered that purport to either

• extend the length of a lease
• increase the land demised

You should avoid using a deed of variation in such circumstances.

However, if these deeds are lodged for registration, we will treat them as an immediate surrender of the old lease and the grant of the new lease. A deed varying a lease that takes effect as a surrender and re-grant of the leasehold estate does not have to be a prescribed clauses lease. This exception applies whether or not the original lease was a prescribed clauses lease. For further details see practice guide 28: extension of leases .

For guidance on how to correct the extent demised by the lease or the length of the term, see practice guide 68: amending deeds that effect dispositions of registered land – section 4.4 Leases: Incorrect extent to term demised.

7. Preliminary service applications

7.1 first registration.

For further details see:

• practice guide 1: first registrations
• practice guide 10: official search of the index map

Note: If you do not require indemnity provisions in respect of an index map search you could consider using MapSearch . This service is available free of charge for Business e-services customers who have portal access and provides immediate search results.

7.2 Lease out of a registered title

• practice guide 11: inspection and applications for official copies
• practice guide 12: official searches

Note: If you are lodging an official search of part affecting a discontinuous lease, ensure you include details of any particular time period as well as the property details, such as, ‘Apartment 6 for Week 27’.

8. Things to remember

Always check that you have:

• form FR1 for a first registration
• form AP1 for a lease out of a registered title
• first registration – where the reversionary title is registered and absolute leasehold title has been requested
• lease out of a registered title – consents in respect of any restrictions in the proprietorship register or charges in the charges register of the lessor’s title. If the landlord’s title is leasehold - consider, do they need to get the consent of their landlord under the terms of the lease?
• discontinuous or timeshare lease – is there a copy of the timeshare calendar in the lease, or do you need to lodge one separately
• lodged a certified copy of the lease
• lodged a form RX1 if applying for any restrictions
• lodged the correct fee (see HM Land Registry: Registration Services fees )
• checked clerical details in all forms and deeds (especially charges and mortgages) and paid particular attention to all dates, property descriptions, title numbers, and full names of parties, especially where they appear in more than one deed.

We only provide factual information and impartial advice about our procedures. Read more about the advice we give .

Is this page useful?

• Yes this page is useful
• No this page is not useful

Help us improve GOV.UK

Don’t include personal or financial information like your National Insurance number or credit card details.

To help us improve GOV.UK, we’d like to know more about your visit today. Please fill in this survey (opens in a new tab) .

• Legal GPS for Business
• All Contracts
• Member-Managed Operating Agreement
• Manager-Managed Operating Agreement
• S Corp LLC Operating Agreement
• Multi-Member LLC Operating Agreement
• Multi-Member LLC Operating Agreement (S Corp)

Demystifying Assignment of Lease: Your Go-To Guide

LegalGPS : July 29, 2023 at 8:17 AM

When you’re talking about property leasing, it’s important to understand that there are a lot of terms and concepts that you may have never heard before. One of them is the assignment of lease, which refers to a situation where a tenant transfers their rights and responsibilities under the lease agreement to another party.

What is an Assignment of Lease, and why is it so crucial?

An Assignment of Lease is a term you may have heard thrown around, especially if you're involved in rental properties. It’s a pretty important document. But what exactly is it? Well, in simple terms, an Assignment of Lease is an agreement where the original tenant of a property transfers their leases and all of its rights and obligations to a new tenant. Now, you might be wondering, "When would this scenario ever occur?"

Let's imagine you're a tenant who signed a three-year lease for an office space. However, two years in, you need to relocate due to unprecedented growth of your business. Instead of breaking the lease, you might choose to assign your lease to another business looking for office space. This means that you, as the original tenant, no longer have any obligations under the lease. The new tenant is now responsible for paying rent and complying with all of the terms of the previously signed agreement.

Now that you understand, let's get into the step-to-step guide on how to create an Assignment of Lease!

Steps to Write an Assignment of Lease

Creating a thorough Assignment of Lease agreement doesn't need to be an overwhelming task. Simply follow these steps to ensure your agreement is both comprehensive and legally binding:

Step 1: Identify the Parties

The information of each party should be included. For the existing tenant (the assignor), make sure to include:

Full legal name or business name

Postal mailing address

Phone number and email address

Do the same for the new tenant (the assignee). Make sure all the information is up-to-date and accurate to avoid any unnecessary confusion or disputes. For example, if the assignor is a business, make sure they have updated their mailing address with the post office to reflect their new building location. If a party has multiple addresses, be sure to list them all.

Step 2: Specify the Lease

This section requires exact information from the original lease agreement, including:

Property address and description

Lease start and end date

A reference to the original lease agreement (for instance, a sentence like "the lease agreement dated...")

Remember to include a copy of the original lease as an attachment to ensure the assignee understands the terms they're adhering to. If not already included in the original lease agreement, be sure to add the following information: Description of rental property, Lease term (how long the lease is good for), Rent amount, and Security deposit amount.

Step 3: Detail the Assignment

State that the assignor is transferring all their interests and obligations in the lease to the assignee. Here, write something like:

"The Assignor hereby assigns, transfers, and conveys to the Assignee all of the Assignor's rights, title, and interest in and to the Lease, together with all the Assignor's obligations, liabilities, and duties under the Lease."

This means that the assignor is transferring all of their interests and obligations in the lease to the assignee. This includes any future rent payments, repairs and maintenance responsibilities, notices of default by either party, and so on.

Step 4: Landlord's Consent

Many leases require the landlord's consent to assign the lease. The assignor should request written consent from the landlord and include a clause like:

"The assignment of the lease is not valid unless and until the landlord provides written consent."

This is followed by a place for the landlord to affirm consent by signing or initialing. This is important because the landlord can elect to withhold consent and the assignment will not be valid. If this is the case, you may need to provide additional consideration for your landlord's assent (for example, an increase in rent).

Step 5: Assignee Acceptance

Include a statement in which the new tenant agrees to the assignment and the terms of the lease. It may look like:

"The Assignee hereby accepts this assignment, assumes all duties and responsibilities under the Lease, and agrees to perform all of the Assignor's obligations under the Lease."

You need to do this because the new tenant needs to have an affirmative acceptance of the assignment in order for it to be valid. This is typically done through a letter from the assignee stating that they agree to perform all of your obligations under the lease.

Step 6: Signature and Date

Every binding legal document needs a date and a signature. Make sure that there is a proper place for the assignor and the assignee to sign and print their names, with a line for the date.

By following these clear, actionable steps, you'll be able to construct an effective Assignment of Lease agreement. Remember, every situation is unique, so adjust the template as necessary, being sure to include all relevant details.

Clear so far? Great! Now, let's focus on the tips to draft a perfect Assignment of Lease.

Tips to Draft a Perfect Assignment of Lease

Accurate Dates: Be sure to include the date when this agreement will take effect. Precision avoids any confusion about durations, when the assignee takes over, or when the assignor's obligations end.

Clear Terms: This document should restate the terms of the original lease. The assignee needs a clear understanding of what they're stepping into. Bit ambiguous? Think of it like this: the assignee should be able to step into the assignor's shoes comfortably.

Specify Rent Terms: Stating the rent amount, due dates, and method of payment in the assignment helps create a record of the agreed-upon rent terms, ensuring no misunderstanding arises in the future.

Specify the Term: The assignment should state how long the new lease lasts. For example, if the original lease is for one year, then the assignee will assume only a one-year term.

Specify Other Conditions: If there are other conditions in place—such as tenant improvements or utility allowances—then specify these too.

An assignment of lease doesn't have to be a formidable task to overcome. With a cautious and considered approach, these documents can be a smooth and seamless part of managing a successful lease transition.

Our contract templates can offer you even more support, empowering you towards crafting an excellent and individualised Assignment of Lease ready for your task. So why not take your next step towards leasing success and check them out today? Click here to get started!

Modified Gross Lease for Business Owners: A Comprehensive Guide

As business owners, we're always seeking opportunities to optimize our costs while securing the best deals for our companies. Real estate leasing is...

Mastering Equipment Leasing: A Comprehensive Guide & Why You Need a Reliable Contract Template

Ever wondered how some businesses manage to use high-end equipment without tying up their capital? The answer lies in Equipment Leasing – an...

Step-By-Step Guide: How To Write A Sales Representative Agreement

Starting a journey as an entrepreneur, there comes a moment when you need to expand your sales team or engage with independent sales representatives....

• See our FAQs
• Send an email
• Chat online
• Call (877) 881-0947

What's the Difference Between Subleasing and Assigning a Lease?

Start Your Sublease Agreement

Create your agreement now by answering a few questions. Or, learn more about Sublease Agreements .

Assignment of Lease

When a tenant decides to assign a lease, he is essentially giving up all his rights and responsibilities to the rental agreement and the unit to a third-party assignee. As a result, the original tenant (the "assignor") will have to vacate the unit and allow the new tenant to take over all of the leased premises. 

However, please note that under the terms of most lease agreements, the original tenant will remain responsible for the terms of the lease. This is important if the new tenant defaults on the lease agreement or causes damage to the property. (Do keep in mind that, sometimes, a landlord may in fact release the original tenant from liability under an assignment of lease). If you're considering a lease assigment, it can be a smart idea to pursue permanent assignment so you won't be on the hook for expenses or damages. 

When a tenant gives another person the right to occupy a portion or the entire rental unit for a specific period of time, he is, in effect, subletting his rental unit. Under the Residential Tenancies Act, generally, all tenants have the right to sublet their rental unit, subject to the consent of the landlord. Although the law provides that the landlord cannot be unreasonable or arbitrary in withholding consent to a sublease, you still need to get your landlord's written consent to sublease the property before letting somebody else in.

Subletting a rental unit can be a more involved process when compared to assigning a lease since it requires the completion of a sublease agreement between the original tenant (the "sublessor") and the secondary tenant (the "sublessee"). The original tenant retains all his rights and responsibilities in the leased unit so he remains liable for the monthly rent and the condition of the rental property.

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer .

Related Guides

How to conditionally accept a good tenant's pet, including adult children on a lease: what landlords need to know, landlord's guide to raising rent, ask a lawyer, try rocket lawyer free for 7 days, start your membership now to get legal services you can trust at prices you can afford. you'll get:.

All the legal documents you need—customize, share, print & more

Unlimited electronic signatures with  RocketSign ®

Ask a lawyer questions or have them review your document

Dispute protection on all your contracts with  Document Defense ®

30-minute phone call with a lawyer about any new issue

Discounts on business and attorney services

Navigating the assignment of a commercial lease

Special circumstances can require a tenant or a landlord to assign a commercial lease. Find out the most common situations for a commercial lease assignment and whether it's right for your situation.

Find out more about real estate and business

by   Ronna L. DeLoe, Esq.

Ronna L. DeLoe is a freelance writer and a published author who has written hundreds of legal articles. She does...

Read more...

Updated on: January 9, 2024 · 3 min read

• Tenant's assignment of a commercial lease
• Getting the landlord's consent
• Contents of a tenant's assignment agreement
• Landlord's assignment of a commercial lease

If you're running a business, you may find yourself in a situation where you need to break a commercial lease. As a tenant, one option is to assign the lease, which means removing yourself completely from the lease and transferring it to a third party.

There are also instances when a landlord may need to assign a commercial lease, such as when a property is sold. In doing so, you sell the building with any leases intact, which requires assigning your right to collect rent to the new owner.

Tenant's assignment of a commercial lease

There are many reasons a tenant may want to get out of a commercial lease, including not being able to afford the rent and needing less or more space. Because it's unlikely a landlord will simply let you walk away from your commitment, you should check what your lease says about early termination. Most commercial leases require the tenant to pay rent for the rest of the term and possibly additional fees for breaking the lease.

Assignment of the lease is another alternative to breaking it. In doing so, you give the new tenant, known as the assignee, the right to occupy the premises in your place for the remainder of your lease term.

Getting the landlord's consent

Almost all assignments of commercial leases by the tenant need the landlord's consent, so check your original lease for any such language. As with a residential lease, a landlord cannot unreasonably withhold consent for you to assign the lease. However, it's up to you as the assignor, or original tenant, to ensure that your assignee is reliable, responsible, and can pay the rent—or you may end up being held financially liable.

If the tenant assigns a commercial lease to a new tenant without the landlord's permission, the landlord can sue the original tenant for breaking the lease. The landlord can also collect damages against one or both tenants if he can show that the assignee isn't a good-paying tenant or doesn't have the type of business he wants in the building. He can also end the lease and evict the new tenant.

Contents of a tenant's assignment agreement

Assignment of a commercial lease is almost always accompanied by a written agreement to preserve both the tenant's and landlord's rights. Some states require written assignment agreements . Many commercial assignment agreements contain provisions for the:

• Payment of fees to the landlord for having another business substitute for yours
• Assignor's and assignee's names, addresses, and business names
• Landlord's name, address, and business name
• Amount of the new tenant's rent and the dates for payment
• Date of the agreement
• Date the assignment is effective
• Date the lease ends
• The landlord's, assignor's, and assignee's signatures

Assignment agreements usually don't contain a provision releasing the assignor from paying rent, meaning that you, as the assignor, are held responsible for payment. Even so, assignment can be a financially responsible option for a tenant who's going out of business or who needs new space immediately.

Landlord's assignment of a commercial lease

Sometimes a commercial landlord needs to sell his property. After the new owner, or assignee-buyer, buys the property subject to existing leases, the assignor-landlord assigns the leases to the new owner, who can then collect rent. The assignor-landlord notifies tenants by sending a notice of sale, a notice of assignment of lease, or a notification on letterhead listing the assignee-buyer's address for payment of rent.

Unless the lease states otherwise, you, as landlord, can sell your property to anyone, but make sure to get a hold harmless clause , also known as an indemnity clause, in your contract of sale. Such clauses protect you from liability to the tenant if the buyer doesn't perform her duties as a landlord. Otherwise, as the original landlord, you're still liable for your obligations to the tenant, such as keeping the premises habitable.

Under the right circumstances, assignment of a commercial lease can work for both landlords and tenants. If you need assistance with your assignment agreement, consider using an online service provider to prepare it for you.

You may also like

What does 'inc.' mean in a company name?

'Inc.' in a company name means the business is incorporated, but what does that entail, exactly? Here's everything you need to know about incorporating your business.

October 9, 2023 · 10min read

How to Start an LLC in 7 Easy Steps (2024 Guide)

2024 is one of the best years ever to start an LLC, and you can create yours in only a few steps.

May 16, 2024 · 22min read

How does it work?

1. choose this template.

Start by clicking on "Fill out the template"

2. Complete the document

Answer a few questions and your document is created automatically.

3. Save - Print

Your document is ready! You will receive it in Word and PDF formats. You will be able to modify it.

Lease Assignment Agreement

Rating: 4.9 - 137 votes

A Lease Assignment Agreement is a short document that allows for the transfer of interest in a residential or commercial lease from one tenant to another. In other words, a Lease Assignment Agreement is used when the original tenant wants to get out of a lease and has someone lined up to take their place.

Within a Lease Assignment Agreement, there is not that much information included, except the basics: names and identifying information of the parties, assignment start date, name of landlord, etc. The reason these documents are not more robust is because the original lease is incorporated by reference , all the time. What this means is that all of the terms in the original lease are deemed to be included in the Lease Assignment Agreement.

A Lease Assignment Agreement is different than a Sublease Agreement because the entirety of the lease interest is being transferred in an assignment. With a sublease, the original tenant is still liable for everything, and the sublease may be made for less than the entire property interest. A Lease Assignment transfers the whole interest and puts the new tenant in place of the old one.

The one major thing to be aware of with a Lease Assignment Agreement is that in most situations, the lease will require a landlord's explicit consent for an assignment. The parties should, therefore, be sure the landlord agrees to an assignment before filling out this document.

How to use this document

This Lease Assignment Agreement will help set forth all the required facts and obligations for a valid lease assignment . This essentially means one party (called the Assignor ) will be transferring their rights and obligations as a tenant (including paying rent and living in the space) to another party (called the Assignee ).

In this document, basic information is listed , such as old and new tenant names, the landlord's name, the address of the property, the dates of the lease, and the date of the assignment.

Information about whether or not the Assignor will still be liable in case the Assignee doesn't fulfill the required obligations is also included.

Applicable law

Lease Agreements in the United States are generally subject to the laws of the individual state and therefore, so are Lease Assignment Agreements.

The Environmental Protection Agency governs the disclosure of lead-based paint warnings in all rentals in the States. If a lead-based paint disclosure has not been included in the lease, it must be included in the assignment. Distinct from that, however, required disclosures and lease terms will be based on the laws of the state, and sometimes county, where the property is located.

How to modify the template

You fill out a form. The document is created before your eyes as you respond to the questions.

At the end, you receive it in Word and PDF formats. You can modify it and reuse it.

A guide to help you: Tenants and Subtenants Obligations under a Sublease Agreement

Other names for the document:

Assignment Agreement for Commercial Lease, Assignment of Commercial Lease, Assignment of Lease, Assignment of Residential Lease, Assignment Agreement for Lease

Country: United States

Housing and Real Estate - Other downloadable templates of legal documents

• Security Deposit Return Letter
• Rent Payment Plan Letter
• Residential Lease Agreement
• Sublease Agreement
• Tenant Maintenance Request Letter
• Rent Receipt
• Late Rent Notice
• Notice of Intent to Vacate
• Roommate Agreement
• Quitclaim Deed
• Parking Space Lease Agreement
• Short-Term Lease Agreement
• Tenant Security Deposit Return Request
• Termination of Tenancy Letter
• Change of Rent Notice
• Complaint Letter to Landlord
• Lease Amendment Agreement
• Notice of Lease Violation
• Consent to Sublease
• Eviction Notice
• Other downloadable templates of legal documents

The Importance of Registering a Lease Assignment in the UK

By Paul Loccisano Senior Associate

Updated on 24 May 2024 Reading time: 5 minutes

This article meets our strict editorial principles. Our lawyers, experienced writers and legally trained editorial team put every effort into ensuring the information published on our website is accurate. We encourage you to seek independent legal advice. Learn more .

• Assignment  

Registering a Lease Assignment

Key takeaways, frequently asked questions.

A cornerstone provision in commercial lease agreements is the lease term. The lease term refers to the time period in which the commercial tenant agrees to occupy commercial premises. Commercial tenants, for a host of reasons, may need to exit their commercial lease sooner than they anticipated. Lease assignment is one of the most common ways for commercial tenants to exit their lease early . Commercial tenants, via this method, obtain their landlord’s consent to transfer the existing lease to another business owner. This can be beneficial for tenants who find themselves needing to downsize, relocate, or cease operations altogether. Additionally, landlords often prefer lease assignments over lease terminations as they ensure continued occupancy and rental income. This article will explain the importance of registering a lease assignment in the UK.

Assignment  

Commercial lease assignment is when a tenant transfers their existing lease to a new tenant. The existing tenant is the outgoing tenant or assignor, and the incoming tenant is the assignee. Lease assignment means that the commercial lease does not end, but the tenant is merely substituted. The assignee takes on all the outgoing tenant’s lease obligations and enjoys the tenant’s rights in the lease agreement. Ultimately, the incoming tenant will enjoy sole possession of the commercial property as their commercial premises. The incoming tenant will also start making rent payments for the commercial property.

The assignor starts the process of lease assignment. Leases between the outgoing tenant and the landlord that have less than several years before the conclusion of the lease term will need to go through a formal process of assignment. The assignor will need to execute a deed of assignment to transfer the lease to the incoming tenant.

The assignor or the assignee may need to register a lease assignment. The assignor or assignee may be required to register the lease assignment instead of using a deed of assignment. A lease assignment will generally need to be registered in two instances. The assignor will need to register the lease assignment if the commercial lease has seven years or more left on the lease term.

Also, the assignor is required to register the lease assignment if the lease has already been registered with the HM Land Registry Office . They must complete and submit a TR1 form to the HM Land Registry Office for a lease assignment to be valid. Once the Land Registry receives this, they will process the lease assignment and place the incoming tenant’s name as the titleholder to the lease in the Land Register. 

Importance of Registering a Lease Assignment

When you enter or exit a commercial lease through assignment, the process of registering the lease assignment is a crucial part of assigning a lease. This is because until this is complete, the assignee is not legally the new tenant for the commercial lease. Therefore, the lease assignment process is not fully complete. The assignor’s failure to register the lease assignment with the Land Registry Office adversely impacts the assignee. Due to the lease assignment process not being legally complete, the assignee has none of the rights usually granted to them in a commercial lease. The assignee will not have the right to sole occupation of the commercial premises. The assignor will also continue to be responsible for all the lease obligations in the commercial lease agreement. Had the lease assignment been validly registered, the assignee would be responsible for the lease obligations after that.

It is essential to have a solicitor to see you through the lease assignment process. The outgoing tenant’s solicitor will usually draft the transfer for the Land Registry Office. However, you, as the assignee, will want your solicitor to confirm the lease assignment is correct and complete.

Land registration is time-consuming. The assignor should register the lease assignment as soon as possible. Legal rules concerning the timeframe for registration of a lease assignment also impact the practicality of registering land. As the assignor, you can only register the lease assignment for up to two months from the lease completion date. The law will deem the lease to be void if not registered within this timeframe. You are then reliant on a discretionary agreement with the Land Registrar. The Land Registrar may extend the timeframe for you to register the lease with the use of an order.

Break Clause Within a Commercial Lease

The assignor needs to register the lease assignment with the Land Registry Office. The assignor’s act of registering the lease assignment ensures the law considers the lease assignment process to be complete. Further, the assignor registering the lease assignment protects the incoming tenant’s ability to rely on a break notice provision in the commercial lease agreement. A break clause simply allows the incoming commercial tenant to terminate the lease agreement before the lease term ends. The assignor typically needs to register the commercial lease assignment for the incoming tenant to rely on the break clause.

If the assignor has not registered the lease assignment with the Land Registry Office, the incoming tenant will be left in a precarious position. The assignee may need to end the lease early but cannot rely on the break clause. 

This cheat sheet outlines what you should be aware of in your lease agreement.

Lease assignment is where a commercial lease transfers from the existing commercial tenant to a new tenant. The assignor must register the lease assignment with the Land Registry Office in two situations. Where the commercial lease being assigned has seven years or more left on the lease term, the lease assignment will need to be registered. Likewise, registration of a lease assignment is required if the commercial lease is registered. Registration of a lease assignment is essential for assigning a commercial lease. Without it, the assignment is not legal, and it is crucial that registering the lease assignment is done within the correct time frame. Registering a lease assignment may also allow the assignee to exercise the break clause in the lease agreement if necessary. 

If you need help understanding the importance of registering a lease assignment in the UK, contact our experienced leasing lawyers as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page .

Lease assignment is where the existing tenant to a commercial lease, the assignor,  transfers it to a new tenant, the assignee. The lease continues between the assignee and the current commercial landlord.

Registering a lease assignment is often part of the lease assignment process and requires a TR1 form to be completed with the Land Registry Office.

We appreciate your feedback – your submission has been successfully received.

Register for our free webinars

A roadmap to business success: how to franchise in the uk, corporate governance 101: responsibilities for directors, business divorces: exiting directors and shareholders from your company, contact us now.

Fill out the form and we will contact you within one business day

Related articles

Benefits of Engaging a Property Solicitor When Leasing Commercial Property in the UK

4 Ways to End Your Commercial Lease Early in the UK

Assigning vs Subletting Your Commercial Lease in the UK

Five Key Points a UK Commercial Tenant Should Look Out for When Signing a Lease Agreement 

We’re an award-winning law firm

2023 Economic Innovator of the Year Finalist - The Spectator

2023 Law Company of the Year Finalist - The Lawyer Awards

2023 Future of Legal Services Innovation - Legal Innovation Awards

2021 Fastest Growing Law Firm in APAC - Financial Times

.

Stamp duty land tax and Land Registry requirements for assignments of leases

Registering an assignment of a lease at the land registry.

Assignment of Lease Explained

• December 1, 2023

Understanding the complexities surrounding the assignment of a lease is crucial for both tenants and landlords. Within the UK, various situations might compel a tenant to transfer their lease to another party. In this guide we will delve into the essentials, helping you understand every facet of a lease assignment.

What is an Assignment of Lease?

In the world of property management and real estate, the concept of an “assignment of lease” is fundamental. It involves a tenant, known as the assignor, transferring their entire legal interest in a property to another individual or entity, called the assignee. This process is common in both residential and commercial contexts and plays a significant role in maintaining the fluidity of property interests, especially in a dynamic market.

When a tenant signs a lease, they agree to specific commitments, including paying rent and maintaining the property, which are enforceable for a set period. However, various circumstances may prompt a tenant to vacate the property before the lease term expires. Herein lies the importance of the assignment of lease.

Through lease assignment, the original tenant can exit the property and pass on the responsibility to a third party, who then assumes the role of the tenant with all its incumbent responsibilities. It’s important to note that while the new tenant steps into the shoes of the original tenant, the lease terms remain unchanged.

For instance, if an individual rents a flat and later decides to move out before the lease’s expiration due to reasons such as relocating for a job or changing living situations, they may opt for an assignment of the lease. This strategy allows another person to take over the living space and adhere to the responsibilities under the original lease, ensuring that the flat does not remain unoccupied and the landlord continues to receive rent payments. This seamless transition can be especially beneficial in residential areas with high demand for housing, as it minimises financial instability for the landlord and provides immediate accommodation for those in need of a home.

Key Components of Lease Assignment

• Assignor and Assignee: The existing tenant (assignor) and the new tenant (assignee) are the primary parties in this agreement. Their willingness to transfer and assume the lease’s obligations, respectively, drives the assignment process.
• Landlord’s Role: While not a direct party to the assignment, the landlord plays a pivotal role. Most lease agreements stipulate that landlords must provide consent before any assignment takes place. This clause protects the landlord’s interests, ensuring the new tenant is reliable and meets the required standards.
• Legal Documentation: The process requires several legal documents, including the initial lease agreement and a deed of assignment. The latter must clearly articulate that all rights and responsibilities have been transferred to the new tenant. This precision prevents future disputes regarding the terms of the lease.
• Liabilities: The assignment of lease doesn’t inherently absolve the original tenant of responsibilities. Depending on the agreement’s terms, the assignor might remain liable if the assignee fails to fulfil the lease obligations. This potential continued liability underscores the importance of thorough assignee vetting.

The Legal Ground

The legality surrounding the assignment of a lease is rooted in UK property law. It necessitates compliance with various statutory requirements and often involves complex legal procedures. Consequently, parties usually engage solicitors to ensure that the assignment aligns with legal protocols, protecting the interests of all involved parties.

The assignment of a lease is a nuanced process, influenced by factors unique to each situation. Whether prompted by personal, business, or financial changes, lease assignments facilitate flexibility in property occupancy and use. Understanding this concept is crucial for tenants seeking an early exit from a lease, individuals looking for established lease properties, and landlords wishing to maintain continuous tenancy and income streams.

Understanding the Deed of Assignment of Tenancy

A “deed of assignment tenancy” is a legal document that evidences the transfer of lease obligations from the current tenant to another. It is an essential part of the lease assignment process, binding the new tenant to the terms stated in the original lease.

Landlord’s Checks Before Permitting Assignment of a Lease

The assignment of a lease, while beneficial in maintaining continuous occupancy and consistent rent payments, necessitates thorough due diligence on the part of the landlord. Before consenting to an assignment, it’s imperative for landlords to conduct comprehensive checks, mirroring the depth of evaluation done during the initial tenant screening process. These checks are crucial in mitigating potential risks and safeguarding the landlord’s investment.

Detailed Assessment of the Prospective Assignee

Landlords should ascertain the financial stability and reliability of the assignee. This assessment often involves:

• Credit Checks: This allows landlords to have a clearer understanding of the prospective assignee’s credit history, highlighting their ability to keep up with regular rent payments and financial commitments.
• Employment Verification: Landlords typically require proof of ongoing, stable employment. This verification helps ensure that the new tenant has a consistent income stream capable of covering the rent and other associated costs.
• References: Previous landlords or property managers can provide insights into the assignee’s behaviour, paying habits, and overall reliability. Personal references might also be necessary to form a more comprehensive view of the prospective tenant.

Review of the Assignee’s Intent

Understanding the prospective tenant’s reasons for seeking the property and their long-term intentions can provide reassurance. For instance, landlords should feel more comfortable knowing that the assignee plans to reside in the property for an extended period and doesn’t intend to sublet without permission or engage in unlawful activities.

Examination of Financial Documentation

Landlords may request documentation such as bank statements or savings accounts to further verify the assignee’s ability to afford the property. This scrutiny is particularly pertinent in higher-rent areas or for properties with higher maintenance costs.

Ensuring Contractual Compliance

It’s important for the landlord to confirm that the assignee understands and agrees to the terms set out in the original lease. The assignee must comply with all existing conditions, and any deviation needs to be negotiated with and approved by the landlord.

Legal Considerations

Given the legal complexities surrounding lease assignments, landlords often seek legal advice during this process. Lawyers can help ensure that the assignment adheres to local property laws, the original lease’s terms, and that the landlord’s interests are thoroughly protected throughout the transition.

By conducting these comprehensive checks, a landlord exercises due diligence, significantly reducing the likelihood of issues arising from the assignment of the lease. This meticulous approach helps maintain the property’s revenue stream, upholds community standards, and ensures the continued preservation and value of the property investment. It’s a proactive measure, providing the landlord with peace of mind that they are handing over their property to a reliable and responsible assignee.

Costs Involved in Lease Assignment

The process of lease assignment, while a practical solution for tenants looking to transfer their lease obligations, does entail various costs that both the assignor (original tenant) and assignee (new tenant) need to consider. These expenses contribute to a seamless transfer process, ensuring all legalities are properly managed, and all parties are adequately protected. Understanding these costs is essential as it prevents unexpected surprises and allows for a more transparent transaction.

Costs for the Assignor

• Advertising Costs: If the landlord does not immediately have a new tenant, the original tenant may need to advertise the property. This could involve online listings, printed materials, or hiring an estate agent to expedite the process, all of which incur costs.
• Tenant Screening Costs: The assignor might opt to conduct preliminary screenings of potential assignees, which include credit checks, reference checks, and other background investigations to ensure they’re presenting a reliable tenant to the landlord.
• Legal Fees: The legal intricacies of transferring a lease require the involvement of legal professionals. The assignor typically bears the cost for legal consultations, drafting the deed of assignment, and any related legal documentation.
• Landlord’s Administrative Fees: Some landlords charge an administrative fee for processing a lease assignment, covering the time and resources they expend to conduct their checks and modify their records.
• Potential Liability Costs: If the assignee fails to meet the lease obligations, and depending on the terms of the assignment, the original tenant may remain partially liable. This contingent liability could lead to future costs.

Costs for the Assignee

• Security Deposit: It’s standard practice for the new tenant to provide a security deposit before moving in. In some cases, the assignee reimburses the original tenant for the initial deposit, depending on its condition and any agreement between the parties.
• Advance Rent: The assignee may need to pay the first month’s rent in advance, similar to standard leasing arrangements.
• Legal Fees: Assignees also incur legal fees. They need legal counsel to review the terms of the lease, ensure the assignment is conducted correctly, and understand their new responsibilities and liabilities.
• Stamp Duty: Depending on the property’s value and the lease’s remaining duration, the assignee might need to pay Stamp Duty Land Tax (SDLT) on the premium or the rent of the lease.

Shared Costs

In some instances, both parties negotiate and equally share specific costs, such as those for legal consultations, to ensure fairness and mutual satisfaction in proceeding with the transaction.

Both assignors and assignees must factor in these expenses to accurately assess whether a lease assignment is a financially viable option. It is advisable to consult with real estate professionals and legal advisors to understand all potential charges fully. Having a clear, upfront understanding of these costs allows both parties to make informed decisions, ensuring a smooth, transparent, and fair transition process.

Does Assignment Create a New Tenancy?

No, an assignment does not create a new tenancy. It merely transfers the existing tenant’s rights and obligations to the new tenant, who then steps into the shoes of the original tenant under the same lease terms.

The Necessity of Legal Assistance

It is highly advisable to engage a solicitor during the assignment of a lease. A solicitor can provide necessary legal advice, prepare the deed of assignment of lease, and ensure compliance with various property and contract laws.

Deed of Assignment vs Tenancy Agreement

While they might sound similar, a deed of assignment is not the same as a tenancy agreement. The former refers to the document transferring existing lease rights to a new tenant, while the latter is a contract outlining the terms between a landlord and tenant for new occupancy.

Parties Involved in Signing the Deed of Assignment

The deed of assignment of lease is typically signed by the outgoing tenant, the incoming tenant, and sometimes, the landlord, especially when their consent is a prerequisite for the lease transfer.

Landlord’s Consent to Lease Assignment

A landlord can refuse to consent to assign a lease, but this refusal must be reasonable. Scenarios for justifiable refusal might include the prospective tenant’s inability to meet financial commitments or proposed use of the property that violates lease terms.

Lease Assignment vs Subletting

• Lease assignment involves the complete transfer of the tenant’s rights to another party.
• Subletting occurs when the tenant temporarily hands over the property rights to another party but retains some rights or eventually plans to return.

Financial Responsibilities in Lease Assignment

Typically, the outgoing tenant or the incoming tenant covers the costs related to the assignment of lease, such as legal fees, administrative charges, and any leasehold improvements. The specific arrangements may vary based on mutual agreements.

Assigning a Lease Without a Deed: Is It Possible?

No, a lease assignment must be evidenced by a deed to be legally binding. The deed of assignment tenancy is crucial as it protects the interests of all parties involved and provides legal clarity.

The Meaning of ‘Assignment’ in Rent Context

In the context of renting, ‘assignment’ refers to transferring the existing tenant’s lease obligations and rights to another party. The assignee assumes responsibility for rent payments and adherence to the lease terms.

Advantages of Assigning a Lease

There are several benefits associated with the assignment of a lease, including:

• Flexibility for the tenant needing to vacate the property before lease termination.
• Minimal interruption in rent payments for the landlord.
• Opportunity for another tenant to occupy the premises without having to negotiate a new lease.

Stamp Duty and Lease Assignment

Stamp duty on assignment of lease may apply depending on the premium paid and the lease’s yearly rent. It’s important to consult a solicitor to understand any potential tax implications.

Post-Assignment Liabilities for Tenants

After the assignment of a lease, the original tenant is generally released from future liabilities. However, they may remain liable if the new tenant defaults, depending on specific lease terms or if guarantees were provided.

Essential Documents for Lease Assignment

In the process of a lease assignment, several critical documents must be prepared, reviewed, and signed to ensure a legally binding transfer of rights and responsibilities from the original tenant (assignor) to the new tenant (assignee). These documents are crucial in defining the terms of the assignment, protecting the interests of all parties involved, and complying with legal standards. Here are the essential documents required for a successful lease assignment:

1. The Original Lease Agreement

• Before any transfer, all parties must review the original lease. It’s vital to understand any clauses or terms that could impact the assignment, such as conditions requiring the landlord’s consent for any lease transfer.
• The original lease agreement serves as the foundation for the assignment, outlining the terms and obligations that the assignee will need to adhere to.

2. Deed of Assignment of Lease

• This legal document formally transfers the lease obligations from the assignor to the assignee. It must clearly state the terms under which the lease is assigned, including any continuing liabilities of the assignor, if applicable.
• It should be comprehensive, detailing the rights and responsibilities of all parties and any guarantees provided by the assignor.
• The deed is usually drafted by a solicitor to ensure that it complies with legal standards and adequately protects everyone’s interests.

3. Landlord’s Consent to Assignment

• Most leases require the landlord’s formal approval for any assignment to occur. This document is the landlord’s written agreement, permitting the transfer from the current tenant to the new one.
• It may come with conditions the assignee must satisfy, which should be clearly outlined in the consent form.

4. Assignee’s Letter of Acceptance

• This document is proof that the assignee understands and agrees to the terms set out in the original lease and the deed of assignment.
• The letter may restate key lease terms for clarity and will affirm the assignee’s commitment to abide by all the lease conditions and responsibilities.

5. Legal Advisories

• Though not a formal part of the lease assignment, documentation of legal advice received by both the assignor and assignee (and possibly the landlord) is crucial.
• These advisories ensure each party has been informed of their legal rights and obligations, potentially offering protection in the event of future disputes.

6. Inventory List

• If relevant, an inventory list detailing the condition of the property, especially for furnished rentals, would be necessary. This document helps manage expectations and responsibilities concerning the property’s state and contents at the time of the assignment.

7. Proof of Assignee’s Financial Stability

• While not always formally part of the assignment documentation, evidence of the assignee’s ability to meet financial commitments (like bank statements or employment confirmation) often needs to be submitted to the landlord during the assignment process.

The process of assigning a lease is a complex legal transaction that requires strict adherence to procedural standards. These essential documents ensure that the assignment progresses smoothly, with clear understanding and agreement from all parties involved. Both assignor and assignee should seek legal counsel to ensure their interests are protected, and all documents are in order, further underscoring the importance of each document’s role in this pivotal real estate process.

Energy Performance Certificate (EPC) Requirements

Yes, an EPC is generally required for a lease assignment, especially if the building is to be sold or rented out. This certificate ensures that the property meets the necessary energy efficiency standards.

Registering an Assignment of Lease

Registration of an assignment of lease is crucial. It validates the change of tenant under the lease, making it legally binding and enforceable. This process usually involves submitting the deed of assignment to the appropriate land registry.

Timeframe for Assigning a Lease

Assigning a lease can take anywhere from a few weeks to several months, depending on factors like obtaining the landlord’s consent, the new tenant’s credibility, and the speed of legal processes.

Embracing the Benefits of Lease Assignment

Whether you’re a tenant seeking flexibility or a landlord desiring continued occupancy, lease assignment offers solutions that can cater to your individual needs, promoting ease and continuity in the leasing process.

If you’re considering a lease assignment, it’s paramount to seek professional advice to navigate the complexities involved. The information contained in this article should be used for information purposes only and should not be relied upon in place of specific legal advice.

Related Blog Posts

Rental Price Growth

This article delves into the current rental price growth, how it has moderated recently and its implications for renters. Using data from Dataloft, we explore the trends and forecasts in the rental market.

Who Is Responsible for Pest Control?

This article aims to clarify the roles and responsibilities of both parties in various scenarios.

Reeling in a Rental Home

In our fast-paced rental market, securing a rental home has become increasingly competitive.

Commercial lease assignments: A guide for businesses

Business owners often consider commercial lease assignments to enhance flexibility, mitigate financial burdens, or adapt to evolving operational requirements. 

The work landscape, particularly in cities like London, is also evolving with the widespread adoption of remote and hybrid models, with many tenants seeking to streamline their footprints and reduce overhead costs.

Whether your business is looking for a more suitable space or navigating market fluctuations, this article will give you an overview of the lease assignment process and the essential legal aspects to consider.

What is the assignment of a lease?

The assignment of a lease refers to the legal process through which a tenant transfers their lease obligations and rights to another party, known as the assignee. This strategic move allows businesses to exit their premises before the lease term ends, with the assignee assuming responsibility for complying with the lease terms and obligations.

Businesses may consider lease assignment for various reasons, such as relocation, financial constraints, or changes in business needs. For instance, a company experiencing rapid growth may seek more extensive premises, making lease assignment an attractive option to exit the current arrangement.

What role does a solicitor play?

Understanding the legal complexities is vital when considering the assignment of a commercial lease. In this process, solicitors offer expert advice and can negotiate with the landlord to secure favourable terms within the assignment agreement, safeguarding the client's interests. 

Their pivotal role extends to drafting and finalising essential legal documents associated with lease assignments, such as:

• Licence to assign: A solicitor can assist in drafting this document, ensuring that it covers all necessary conditions and terms for the assignment, meets legal requirements, and protects the interests of both parties.  
• Rent deposit deed: Solicitors can draft the rent deposit deed, specifying the details of the deposit arrangement, its purpose, and the conditions under which the landlord can use the deposit, providing legal clarity for both parties.  
• Authorised guarantee agreement (AGA): Solicitors are instrumental in creating an AGA, outlining the legal commitment by the outgoing tenant to guarantee the new tenant's performance. They ensure that the agreement is comprehensive and legally sound, protecting the interests of the landlord and the outgoing tenant.

Avoiding the legal pitfalls of lease assignments

While every commercial lease assignment is unique, several legal aspects require careful consideration.

1. Leasehold covenants: Ensuring compliance 

Understanding leasehold covenants is essential in the lease assignment process as it involves recognising and complying with the agreed-upon obligations and restrictions outlined in the lease agreement. These covenants dictate how the property can be used, any alterations or improvements allowed, and other conditions the current and potential tenants must adhere to. 

For example, if a leasehold covenant stipulates that the premises can only be used for office purposes, you cannot assign the lease to a manufacturing company.

Failure to understand and meet these covenants could lead to complications, including the landlord's refusal to consent to the assignment or potential legal issues. Comprehending these covenants is essential for a smooth and legally compliant lease assignment.

2. Securing the landlord's consent: A prerequisite

Before proceeding with a lease assignment, obtaining the landlord's consent is paramount. This process involves submitting a formal request providing details about the proposed assignee and their financial stability.

While landlords cannot unreasonably withhold consent, specific lease terms may give them grounds to do so. Understanding the particular conditions for refusal is crucial, so it is important to seek legal advice as soon as possible.

3. Liabilities when assigning a commercial lease

Understanding liabilities when assigning a lease is crucial for business owners as it directly impacts their ongoing responsibilities and potential financial obligations. Transferring a lease doesn't automatically absolve the original tenant of all liabilities; they may still be held accountable if the new tenant defaults on payments or breaches lease terms. 

An authorised guarantee agreement (AGA) is a legal commitment often used in the context of commercial lease assignments. When a tenant assigns its lease to a new tenant, the outgoing tenant (assignor) may be required to provide an AGA. This agreement serves as a guarantee by the original tenant to the landlord, ensuring that the obligations of the new tenant (assignee) under the lease will be fulfilled.

The AGA means that if the new tenant defaults on the lease obligations, the outgoing tenant remains liable, guaranteeing the landlord a level of financial security. The original tenant can be pursued for any unpaid rent or other breaches of the lease terms by the new tenant. The AGA provides a legal mechanism for the landlord to seek redress from the outgoing tenant if issues arise with the assigned lease. 

Clear comprehension of these liabilities ensures informed decision-making and risk mitigation during the lease assignment process.

4. Navigating regulatory changes

The evolving regulatory landscape, particularly factors like Energy Performance Certificates (EPCs), can add additional challenges to lease assignments. For example, if you took on a lease before Minimum Energy Efficiency Standards (MEES) came into effect on April 1, 2018, the regulations did not apply at the time of the lease's inception. However, if you are now considering assigning the lease, MEES regulations would be applicable. 

A landlord may be less willing to agree to the lease assignment if it becomes essential to ensure that the property meets the required EPC standards to comply with the current regulations. 

5. Formalising with Land Registry: A vital step

Registering an assignment with the Land Registry is an important step in the lease assignment process. If a lease is granted with a term of over seven years, it must be registered to record the change of tenant officially. 

Failure to complete this registration can have significant consequences, including potential challenges to the validity and enforceability of the assignment. 

What are the alternatives to assigning a commercial lease?

When considering an exit from a commercial lease, it's crucial to recognise that assignment is just one of several options. Exploring these options is vital, and seeking guidance from a solicitor ensures a comprehensive understanding of the available choices.

• Assignment vs. subletting: Assignment involves permanently transferring your lease obligations to a new tenant. On the other hand, subletting a commercial property allows you to lease a part of your space to another party, retaining your responsibility for the entire lease.  
• Taking advantage of a 'break clause': A break clause is a provision in the lease allowing either party to terminate the agreement early, typically at predefined intervals. It provides a strategic exit, but conditions and notice periods must align with the lease terms.  
• Early termination with landlord's consent: Seeking your landlord's agreement to terminate the lease prematurely can be challenging. It requires negotiations and may involve financial considerations. Legal advice is essential to navigate this complex process and safeguard your interests.

Business owners can make informed decisions that align with their strategic objectives by understanding the intricacies, exploring alternatives, and leveraging legal expertise.

Commercial lease expertise

Our team of experienced commercial property solicitors is dedicated to guiding you through the lease assignment process. Every business has unique needs, so we offer tailored advice that aligns with your objectives. 

In addition to lease assignments, we can provide guidance on alternative options for ending a commercial lease, such as subletting, break clauses, and lease termination. 

With solicitors in London, Brighton, East Sussex, and Cumbria, we assist commercial landlords and tenants nationwide.

Looking to assign a commercial lease?

You might also like to read:

Subletting strategies: maximising flexibility in commercial leases, how to surrender a commercial lease: a guide for landlords and tenants.

How to end a commercial lease early: A quick guide

Repair clauses in commercial leases: what tenants need to know.

Legal Services

• Brain Injury
• Cerebral Palsy
• Child Birth
• General Medical Negligence
• Misdiagnosis Of Cancer
• Wrongful Birth
• Bridging Loans
• Freehold and Leasehold to Buy and Sell
• Purchases and Sales of Business Premises
• Transfers/Assignments of Existing Leases
• Catastrophic Injury Claims
• Contentious Probate
• Contractual Disputes
• Housing Disrepair
• Landlord & Tenant disputes
• Military Claims
• Other Litigation
• Employment Tribunal Claims
• Restrictive Covenants
• Settlement Agreements
• Contracts, Policies and Procedures
• Defending Employment Tribunal Claims
• Disciplinary, Capability and Grievance Procedures
• EDI and Harassment Policies
• Flexible Work Requests
• Protected Conversations and Settlement Agreements
• Restrictive Covenants and Employee Competition
• Children Advice
• Cohabitation Agreements
• Collaborative Law
• Divorce and Separation
• Domestic Violence
• Financial Arrangements
• Inheritance Act Claims
• Pre and Post Nuptial Agreements
• Property Claims for Unmarried Couples
• Business Visas
• Relationship and Family Visas
• Refusals and Appeals
• Settlement Visas
• Student Visas
• UK Citizenship
• Visitor Visas
• Bills of Costs
• Costs Budgeting and Management
• Costs Negotiations and Advice
• Costs Training and Seminars
• Court of Protection
• Group Litigation
• Points of Dispute
• Replies to Points of Dispute
• Solicitor and Client Disputes
• Auction Sales and Purchases
• Buying a House
• Lease Extensions
• Lifetime Mortgages (Equity Release)
• Remortgaging
• Selling a House
• Transfer of Equity
• Court of Protection Applications
• Declarations of Trust
• Estate Planning
• Inheritance Tax Advice
• Powers of Attorney

Further Information

• Accreditations
• Free Online Enquiry
• News, Events and Articles

Assignment Of A Lease: Everything You Need To Know! 📃

• Laura Everitt
• May 8, 2024

There are are plenty of reasons why you might want to exit your commercial lease early. Perhaps your current premises are no longer suitable for the needs of your growing business, or maybe your business is in financial difficulty and you need to find a lease with more favourable terms.

There are also plenty of options when it comes to deciding how to exit a lease before the specified end date. Some of the most common include: assignment of a lease, which involves passing the lease onto another business; terminating the lease, with the help of a break clause if your contract contains one; or subletting your premises and adopting the role of landlord yourself.

Unfortunately, exiting a lease early is not always a simple process. A lease is a legal contract, and if you break it your landlord could take you to court. Opting to pursue a process such as assigning the lease to a new tenant can make exiting a lease early possible, but there are many factors that should be considered before beginning this process.

If you are thinking of trying to leave your lease early, it is advisable to obtain independent legal advice from an appropriately experienced commercial property solicitor before taking any action.

If you require legal advice or assistance on getting out of a commercial lease please call us on 0800 086 2929 , email [email protected] or complete our Free Online Enquiry Form .

In addition to office meetings, we also offer remote meetings via telephone and video conferencing software so can assist you wherever you are based.

What is assignment of a lease?

The process of assignment of a lease is essentially selling the lease to a third party (the “assignee”).

If you are a commercial property tenant, your contract likely contains a clause that allows you to assign your lease to a new tenant. To do this, you will need to find a potential new tenant yourself. Your landlord will expect this new tenant to meet the same expectations they originally set for you, and you will probably need their consent before the assignment can be completed.

While your landlord cannot reasonably withhold their consent for the assignment, they are under no obligation to give their consent if the new tenant doesn’t meet the terms set out in your contract – so it’s wise to be picky yourself about the tenant you select.

There are likely to be restrictions around when and if you can assign your lease specified in your contract. Some common restrictions include not allowing lease assignments if the contract is for a short period, and not allowing the lease to be assigned if the lease is ending within a few years.

Once a lease as been assigned, the assignee will become the new tenant and will be responsible for ensuring compliance with all of the tenant’s obligations in the lease.

What checks will a landlord make before permitting assignment of a lease?

Financial status

Your landlord will want to see evidence – usually in the form of business bank account statements – that the new tenant is in a strong financial position

Statements from previous landlords that the tenant has leased property from will be required to show that the tenant is reliable and doesn’t have a history of missing payments or otherwise neglecting their responsibilities as a tenant

Proposed use of the premises

Your landlord will probably be looking for a new tenant to intend to use the premises in broadly the same way as you have done in the past as the lease will specify what use is allowed.

Likelihood of requesting alterations to the building

As above, your landlord will require advanced notice of any alterations the new tenant may wish to make to the premises, and in some cases written permission in the form of a Licence to Alter will be required. It is likely that they may withhold their consent for assigning the lease to any tenant intending to make large-scale changes depending upon the type of premises involved.

What liabilities will you have when assigning a lease?

It is important to recognise that the assignment of a lease to a new tenant does not automatically exempt you from all liabilities related to that tenancy going forwards. In fact, once the lease assignment is complete you can still be liable should the new tenant miss any payments or otherwise break the terms of their contract.

Exactly what you will be liable for depends on when your lease began. If your lease began before January 1996 you will remain liable for all payments by any subsequent tenants – even if the lease is assigned several more times after you. This is called “privity of contract”.

For leases that began after January 1996, you will be required to sign an Authorised Guarantee Agreement . This means you guarantee payments for the next tenant, but not any further tenants.

Landlords can only claim payments of rent within six months of the money being due, and only after full notice has already been served to the former tenant.

What does lease assignment cost?

On the other hand, if the rent under the new lease is below the market rate, the new tenant may instead want to pay you a premium. If this is the case, you’ll need to make a decision on whether to charge VAT – or “opt to tax” – something that’s worth getting professional advice on.

A final charge to be considered is the cost of this advice. It is highly recommended to involve your solicitor when opting to pursue a lease assignment so as not to inadvertently break the terms of your contract and leave yourself open to court action. You should therefore also factor solicitors’ fees into your calculations when considering the cost of exiting your lease.

How to get out of a commercial lease – what are the alternatives?

Assignment of a lease is not the only way to get out of a commercial lease and depending on your circumstances and the contract you have with your current landlord, it may not always be the best option.

Some alternative ways to get out of a commercial lease early include:

Using a break clause

Some lease contracts include a “break clause” which offers both parties the opportunity to end the lease early in certain circumstances. Read your contract carefully to check if it contains a clause like this, and if it does, what terms and conditions are involved. Any time limits specified in the lease for giving of notice must be strictly followed.

Negotiating a lease exit

If your contract does not include a break clause, your landlord may still be open to you exiting the lease early. You would need to negotiate the specific terms of your exit and your landlord may require a pay-out to offset the inconvenience of having to market the property again.

Compared to lease assignment, negotiating an exit from your lease should provide a clean break with no further liabilities, but we would recommend seeking legal advice to confirm that you were exiting the contract cleanly.

Subletting the premises

A final option to consider when looking at how to get out of your commercial lease early is subletting. If your contract allows it, you can take on the role of landlord by finding and leasing your property to a new tenant.

You can use the rent payments from your new tenant to cover your own obligations, but in return you’ll be expected to take a hands-on role managing the property and dealing with the sub-tenant directly.

Need assistance with assignment of lease?

Exiting a lease early can be a complex process, whether you choose to do so by arranging the assignment of your lease or by one of the other means mentioned above.

Lease assignment is an effective way for tenants to get out of a commercial lease early. However, this can be a slow process and you will incur costs.

Contacting a solicitor at an early juncture is advisable so that you are appropriately advised at the outset of any key considerations and potential pitfalls. For example, even though you are selling the lease, you could potentially remain liable afterwards; this will depend on the age of the lease and whether you have entered into an authorised agreement or not.

Laura Everitt is the Head of our Property Department and has many years of experience in dealing with lease assignment.  Laura assists and advises clients all over the country.  In addition to office meetings, Shakeel offers remote meetings via telephone or video conferencing software so can assist you wherever you are based.

Make a Free Enquiry

If you are considering how to get out of a commercial lease or have any queries relating to any of the issues discussed in this article, please get in touch with our of our experienced property lawyers by calling 0800 086 2929 , emailing [email protected] or completing our Free Online Enquiry Form .

The content of this article is for general information only. The information in this article is not legal or professional advice. If you require legal or professional advice you should obtain independent expert advice from qualified commercial property solicitors such as those within our firm .

Call us 24/7 on 0800 086 2929 or complete our Free Enquiry Form below

Please leave this field empty.

copyright 2020. all rights reserved.

• Clinical Negligence
• Commercial Property
• Dispute Resolution
• Employment Law
• Family Law and Divorce
• Immigration
• Legal Costs
• Residential Conveyancing
• Wills, Trusts and Probate
• Amersham Office
• Brighton Office
• Ebbsfleet Office
• Elstead Office
• Hitchin Office
• Leighton Buzzard Office
• Raunds Office
• Southampton Office
• St Albans Office
• Surbiton Office

Privacy Overview

• News, Events & Articles
• Online Payments
• Transfers/Assignments of Leases
• Landlord & Tenant disputes
• For Employees:
• For Employers:
• Divorce And Separation
• Costs Budgeting And Management
• Buying a Property
• Halal Mortgages
• Lifetime Mortgages
• Re-Mortgaging
• Selling a Property
• Bedford Office

• Contract Management

Supplier Management

Savings Management

• Data & Security

FAQ’s

oboloo Articles

Navigating the world of lease assignment agreements: what you need to know.

Are you planning to lease a property but need to transfer the lease to someone else? Or are you interested in taking over an existing lease for your business or personal use? If so, then understanding the world of Lease Assignment Agreements is crucial. A Lease Assignment Agreement allows for the transfer of a tenant’s rights and obligations under their existing lease agreement. However, navigating this process can be complex and overwhelming without proper information and guidance. In this blog post, we’ll provide you with everything you need to know about Lease Assignment Agreements – from what they are and their different types to their benefits and risks. So let’s dive in!

What is a lease assignment agreement?

A lease assignment agreement is a legal document that allows a tenant to transfer their lease rights and obligations to another party . This means that the new tenant takes over the existing lease, including any remaining time on it, and assumes all responsibilities outlined in the original agreement .

This type of agreement is commonly used when a tenant needs to move out before their lease expires or when someone wants to take over an existing lease for business purposes. The landlord must agree to this transfer by signing off on the Lease Assignment Agreement .

It’s important to note that a Lease Assignment Agreement differs from subletting because in subleasing, the original tenant still retains some control over the property while in an assignment, they give up all rights and responsibilities.

A Lease Assignment Agreement can be beneficial for both parties involved – as long as everything is clearly defined and agreed upon beforehand.

What are the different types of lease assignment agreements?

When it comes to lease assignment agreements , there are different types that you should be aware of. The most common ones include the following:

1. Absolute Assignment: This type of lease assignment agreement involves the transfer of all rights and interests in a leased property from one party (the assignor) to another (the assignee). The assignee takes over all obligations and responsibilities related to the lease .

2. Sublease Agreement: A sublease agreement is an arrangement where the original tenant sublets their space to a new tenant for a portion or entirety of the remaining term on their lease. In this case, both parties must agree with any changes made regarding rent, utilities, maintenance expenses etc.

3. Partial Assignment: This occurs when only part of the leased property’s rights and interest is transferred from one party to another. The partial assignment does not release the assignor from their obligation towards future liabilities under the original terms agreed upon in leasing contract .

4. Assumption Agreement: In this type of lease assignment agreement, one party agrees to take responsibility for fulfilling obligations owed by another party if they default on payment or other obligations specified in leasing contract .

Understanding these various types will help you make informed decisions about which option suits your needs best before signing any legal documents associated with Lease Assignment Agreements

What are the benefits of a lease assignment agreement?

A lease assignment agreement is a legal document that allows a tenant to transfer their leasehold interest in a property to another party. This type of agreement offers several benefits for both the tenant and the new assignee.

Firstly, for tenants looking to exit their lease early, an assignment agreement can help avoid hefty penalties or fees imposed by landlords for breaking a lease . By assigning their lease to another party, tenants can fulfill their contractual obligations while also finding someone else to take over their remaining rent payments .

On the other hand, assignees benefit from being able to acquire an existing lease without having to go through lengthy negotiations with landlords. Additionally, they may be able to secure more favorable terms than if they were starting from scratch on a new rental agreement .

For landlords, allowing assignments can reduce vacancy periods and ensure consistent cash flow as new tenants move in seamlessly when old ones leave. It also saves time and resources since there is no need for extensive screening of prospective tenants.

A well-executed lease assignment agreement presents numerous advantages for all parties involved in the transaction.

What are the risks of a lease assignment agreement?

Entering into a lease assignment agreement comes with its own set of risks that both the assignor and assignee should consider before signing on the dotted line . One of the biggest risks is liability for any outstanding rent payments or damages to the property.

If the original tenant fails to pay rent or causes damage to the property, then both parties could be held responsible under the terms of some lease assignment agreements. This means that even if you are not directly at fault, you could still end up facing legal action for unpaid rent or repairs.

Another potential risk is losing control over who occupies your leased space. In some cases, landlords may require approval before allowing a new tenant to assume a lease agreement . If this approval isn’t granted and you’ve already assigned your lease to someone else without permission, then both parties could face eviction as a result.

There’s always a risk involved in giving up your rights as an original tenant when you sign onto an assignment agreement. You’ll be relinquishing control over how long your business stays in one location and what happens once it moves out – which can impact everything from future expansion plans to overall financial stability.

How to prepare for a lease assignment agreement?

Preparing for a lease assignment agreement is an important step in ensuring a smooth and successful transfer of your lease rights to another party. Here are some steps you should take to prepare for the process:

1. Review your current lease agreement: Before entering into a lease assignment agreement, it’s essential to review your existing lease terms carefully. Ensure that you understand all clauses related to assignments, subletting or transfers.

2. Communicate with the landlord: Contacting your landlord early on can help avoid any misunderstandings later on during the process. You may need their approval before assigning the lease, so keep them informed throughout.

3. Identify potential assignees: Determine who you want to assign the lease too and ensure they meet all necessary requirements set out by both the landlord and existing lease agreement .

4. Negotiate terms with assignee: Once you’ve identified potential assignees, negotiate terms such as rent payments and security deposits if needed.

5. Draft an Assignment Agreement: Work with legal counsel or use online resources like templates from professional associations where possible, ensuring that all parties agree upon its contents before finalizing it.

Preparing well for a Lease Assignment Agreement can be complex depending on various factors involved but following these steps will help make it easier and more manageable !

How to execute a lease assignment agreement?

Executing a lease assignment agreement is the final step in transferring your lease to a new tenant. Before you sign on the dotted line, make sure you have all your ducks in a row.

Firstly, review the terms of your existing lease and ensure that they are clear and concise. This includes any clauses regarding subletting or assigning the lease. You should also check for any restrictions that may prevent you from assigning the lease without landlord approval.

Next, identify potential tenants who may be interested in taking over your lease. Once you’ve found someone suitable, it’s time to negotiate terms with them directly or through an attorney.

Once both parties agree on terms such as rent payments and security deposits, it’s time to draft up an assignment agreement document. This document should include details about both parties involved along with signatures from each party acknowledging their understanding of its contents.

Submit this executed agreement along with other necessary documents such as consent forms from landlords and financial statements to complete the transfer process smoothly.

To sum it up, a lease assignment agreement is an essential document that plays a crucial role in transferring the rights and obligations of the lessee to another party. As we have discussed in this article, there are different types of lease assignment agreements with benefits and risks involved.

To navigate the world of lease assignment agreements successfully, one must prepare adequately by reviewing the original lease agreement thoroughly and seeking legal advice if necessary. Proper execution of the agreement is also crucial to ensure that all parties understand their responsibilities.

Understanding how a lease assignment agreement works can help you make informed decisions when dealing with leases. Whether you’re a landlord or tenant looking to transfer your interests in a property, always remember to be cautious and seek professional guidance throughout the process.

Want to find out more about procurement?

Access more blogs, articles and FAQ's relating to procurement

The smarter way to have full visibility & control of your suppliers

Contract Management 

Partnerships 

Charities/Non-Profits

Service Status

Release Notes

Feel free to contact us here. Our support team will get back to you as soon as possible

Sustainability

How Do You Assign or Transfer a Commercial Lease?

By Jessica Dinh Lawyer

Updated on December 15, 2023 Reading time: 5 minutes

This article meets our strict editorial principles. Our lawyers, experienced writers and legally trained editorial team put every effort into ensuring the information published on our website is accurate. We encourage you to seek independent legal advice. Learn more .

• 1. Seek Your Landlord’s Consent 

2. Deed of Assignment

3. transferring a retail lease, key takeaways.

If you lease a commercial property to operate your business, there may be situations where you need to transfer the lease. There are usually two situations when a tenant will transfer (also known as an assignment ) a commercial lease to another party (the assignee) before the end of a lease term. Namely, where the tenant is:

• selling their business, and the purchaser agrees to accept the existing lease rather than enter into a new lease with the landlord; or
• is proposing to exit the lease and has found a party who will take on the existing lease.

This article explains how the transfer of a commercial lease works. It also explains the critical terms of the deed of assignment from the perspective of the landlord, tenant and assignee.

1. Seek Your Landlord’s Consent 

As soon as you propose an assignment as a tenant, you should:

• review the existing lease to identify if the lease can be assigned;
• identify the requirements of landlord’s consent upon assignment; and
• correspond with the landlord or agent as to consent and approval of the proposed assignee under the lease. 

When seeking your landlord’s consent for the assignment, the proposed new tenant must usually provide their financial and business references to the landlord.

Can a Landlord Refuse to Assign a Retail Lease? 

If the lease is a retail lease, the landlord will not be able to withhold consent to an assignment unreasonably. The retail legislation (different in each state) provides the grounds on which the landlord can withhold their consent. These generally include the:

• assignee proposes to change the permitted use;
• assignee has financial resources or retailing skills that are inferior to the assignor, and
• assignor has not complied with the relevant steps, per the retail legislation in that particular state, including providing a disclosure statement.

Ensure that you check the retail legislation in that particular state when carrying out an assignment.

After obtaining the landlord’s consent, a deed of consent to assignment is prepared (deed of consent).

A deed of consent is a legal document that outlines that the:

• landlord confirms their consent to the transfer of lease;
• tenant agrees to transfer their entire interest in the lease to the assignee from a specific date (the assignment date); and
• assignee, or new tenant, agrees to assume the rights and obligations of the lease as if they were the original tenant (such as repairs, security and payment of rent and outgoings) from the assignment date. This will continue until the end of the lease term and during any option or renewal terms.

The Landlord

Generally, the landlord’s key concern is that the transfer does not affect their rights under the lease. The landlord can address this concern by ensuring that the original tenant (assignor) has complied with all of their obligations under the lease until the assignment date. The landlord will have the right to take action against the tenant after the assignment date for any existing breach of the lease. 

Additionally, the landlord will want to make sure that the assignee can comply with the lease obligations. This will often involve an assessment of the assignee as a tenant. The landlord will thoroughly examine the information before confirming their consent to the transfer. This might include: 

• financial statements; 
• business history; and 
• professional references. 

Finally, there is usually an agreement about who is liable for the costs of the deed of assignment. The landlord’s lawyer usually prepares the agreement. However, the outgoing tenant or the incoming tenant pays these costs, not the landlord.

The deed of assignment usually requires the assignee to give the relevant security and guarantees.

The Outgoing Tenant

As the outgoing tenant, your key concern is to be released from your obligations under the lease from the assignment date. The deed of assignment can address this concern by specifying that:

• the tenant is released from any claims or liabilities under the lease from the assignment date (provided that there is not an existing breach of the lease); and
• if the tenant has provided any security, it is to be returned or refunded.

It is important for you to remember that you are bound to the terms of the lease until the transfer of the commercial lease is formalised through the deed of assignment. Accordingly, you should continue to comply with your obligations under the lease until the assignment date.

On that note, a landlord might not agree to release you entirely from your obligations if the retail legislation in your state does not prevent this. This means that if the new tenant defaults, you could be responsible for fulfilling the lease obligations. In that case, you would need guarantees or an indemnity from the new tenant.

If the transfer of deed has to be registered, typically with retail leases, you (the assignor) usually organise the registration of the transfer, whose costs are divided with the new tenant  (the assignee).

The Assignee

The new tenant’s, or the assignee’s, key concern is for the landlord to accept the transfer of the commercial lease from the assignment date. The deed of assignment can address this concern by providing that:

• the landlord accepts the assignee as tenant from the assignment date;
• the landlord will observe their obligations specified in the lease in favour of the assignee; and
• if required in the relevant state, the parties sign a transfer of lease form and register the transfer at the land titles office.

The assignee should ensure that they have reviewed the contents of the commercial lease (including the disclosure statement if it is a retail lease). Then, they must review the lease before signing the deed of assignment. This is because the assignee will need to comply with the obligations of the tenant from the assignment date. These obligations may include the provision of security and a personal guarantee.

A personal guarantee is taken on by an individual to guarantee the obligations of another individual or entity. For example, the assignee providing may provide a personal guarantee where a particular party becomes a guarantor. If you cannot meet your obligations (such as to pay the lease), then the guarantor will have to meet that obligation themselves.

Before finalising the deed of assignment, it is important that the landlord, assignor and assignee agree on who bears the costs of preparing, negotiating and registering the deed of assignment. Generally, you, as the assignee, will bear the costs. However, you may choose to add a cap or exclude negotiation costs. 

If the lease you are transferring is a retail lease, the tenant will typically need to give the assignee a disclosure statement. This statement also includes details of any changes to the disclosure statement that the landlord provided when the lease was first entered into.

The disclosure statement outlines the vital information that the assignee needs to know, including the:

• current annual rent under the lease;
• current estimated outgoings payable under the lease;
• term of the lease and any options to renew; and
• details of the premises. 

Generally, the tenant may request an updated disclosure statement from the landlord before the transfer of the commercial lease. The landlord has an obligation to provide the updated disclosure statement, usually within 14 days from the date of the request.

The disclosure statement requirements differ between the states and territories. For example, in:

• New South Wales, the assignee must receive the disclosure statement at least seven days before the date of the transfer; and
• Victoria and Queensland, the assignee must receive the disclosure statement at least seven days before the assignor requests the landlord’s consent.

The consequences of failing to provide a disclosure statement also differ between the states and territories. For example, the assignee may:

• withhold payment of rent;
• seek compensation from the landlord; or
• terminate the lease within a specific timeframe.

It is essential for all parties to be aware of the requirements and consequences of the disclosure statement provisions in their particular state or territory.

Additionally, transferring a lease may also lead to stamp duty implications . Stamp duty is a tax imposed on the purchase of assets and transactions of property. Therefore, if you are transferring a lease, you will commonly have to pay stamp duty. It is important that you are aware of the circumstances where you, as a tenant, will be required to pay stamp duty.

A factsheet that sets out the three ways to end a commercial lease in Australia: surrendering your lease, assigning it or subletting it.

Whether you are a landlord, tenant or assignee, it is crucial that you understand your rights and obligations when transferring a commercial lease. Further, the transfer of a retail lease leads to additional requirements and consequences related to the disclosure statement. Finally, you need to be aware of the steps you should take to ensure a smooth assignment.

If you need assistance with drafting or reviewing the terms of a deed of assignment, our experienced leasing lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page .

We appreciate your feedback – your submission has been successfully received.

Register for our free webinars

Tips for sponsoring overseas workers for ndis and aged care, engaging contractors: latest employment law changes, ato compliance: what directors and businesses need to know, global expansion blueprint: insights from the experts, contact us now.

Fill out the form and we will contact you within one business day

Related articles

Deadlines for the Option to Renew a Lease in NSW

10 Things a Tenant Should Know Before Signing a Lease

How Will the Changes to the Retail Leases Act 1994 (NSW) Affect My Business?

I’m Selling a Business. How Do I Transfer the Lease?

We’re an award-winning law firm

2023 Fast Firms - Australasian Lawyer

2022 Law Firm of the Year - Australasian Law Awards

2021 Law Firm of the Year - Australasian Law Awards

2020 Excellence in Technology & Innovation Finalist - Australasian Law Awards

2020 Employer of Choice Winner - Australasian Lawyer

• Free Guides

Ending a Tenancy: What You Need to Know About Lease Assignments

There are many reasons for a tenant to decide they want out of a lease agreement; it could be a matter or preference or because of things that are beyond their control. Some of the most common reasons include:

(a) the business being sold

(b) the need for a bigger (or smaller) space

(c) issues with the neighbours (or even the landlord)

(d) job loss or relocation

(e) separation or divorce and discontinuance or transfer of business to ex-partner

Whatever the reason may be, the original tenant can’t just up and leave the property (without heavy recourse) without following proper procedure. Read on to learn more about how to properly assign your retail and/or residential leases in Victoria.

What does assignment of lease mean?

How do you assign a lease?

Assignment of retail leases, give the prospective tenant an updated copy of a disclosure statement..

• the current tenant asks the landlord to give the new tenant a new disclosure statement that is no more than three months old from the date of the request
• if the landlord receives this request, the landlord must provide the new disclosure statement within 14 days

Obtain the consent of the landlord.

Who pays for assignment of lease, who prepares the assignment of lease, other frequently asked questions about lease assignments.

There may be issues with this as it might create a new lease. Enquire further because this is not a straightforward answer!

No, as there is no requirement to register leases in Victoria.

An increase of the rent can potentially deem the assignment of lease as a new lease agreement. Therefore, yes, it has been done before but there will be rules that will apply to a new lease.

Need Assistance with Assignment of Lease?

Even in leasing arrangements, circumstances can change and your tenant might want to move on. In circumstances where another person is willing to take over an existing lease, the only way forward is an assignment of lease.

If you’re considering getting out of a lease early and/or transferring your interests to another party, getting in touch with a lawyer is highly recommended so that you can spot potential risks and identify alternatives at the outset. For assistance in all kinds of leasing matters , contact TNS Lawyers on 03 9052 3214 or fill out the contact form below.

Considering getting out of a lease early?

TNS Lawyers can help you follow proper procedures when exiting a lease and transferring/assigning your interests to another party. Arrange a free, no-commitment callback with us!

• Terms And Conditions
• Privacy Policy

Tel: +61 3 9052 3214

Fax: +61 3 8610 1086

[email protected]

Ground Floor, 310 King Street, Melbourne, VIC 3000

Copyright 2024 TNS Lawyers

Built by Brand Up Speak Up

• Practical Law

What happens on the assignment of an unregistered lease, that should have been registered?

Practical law resource id 1-524-3210  (approx. 3 pages), get full access to this document with a free trial.

Try free and see for yourself how Practical Law resources can improve productivity, efficiency and response times.

About Practical Law

This document is from Thomson Reuters Practical Law, the legal know-how that goes beyond primary law and traditional legal research to give lawyers a better starting point. We provide standard documents, checklists, legal updates, how-to guides, and more.

650+ full-time experienced lawyer editors globally create and maintain timely, reliable and accurate resources across all major practice areas.

83% of customers are highly satisfied with Practical Law and would recommend to a colleague.

81% of customers agree that Practical Law saves them time.

• Landlord and Tenant
• Land Registration

• Election 2024
• Entertainment
• Newsletters
• Photography
• Personal Finance
• AP Investigations
• AP Buyline Personal Finance
• AP Buyline Shopping
• Press Releases
• Israel-Hamas War
• Russia-Ukraine War
• Global elections
• Asia Pacific
• Latin America
• Middle East
• Election Results
• Delegate Tracker
• AP & Elections
• Auto Racing
• 2024 Paris Olympic Games
• Movie reviews
• Book reviews
• Personal finance
• Financial Markets
• Business Highlights
• Financial wellness
• Artificial Intelligence
• Social Media

Yankees ace Gerrit Cole to begin rehab assignment Tuesday at Double-A

New York Yankees pitcher Gerrit Cole throws a bullpen session before a baseball game against the Tampa Bay Rays, Saturday, May 11, 2024, in St. Petersburg, Fla. (AP Photo/Chris O’Meara)

New York Yankees pitcher Gerrit Cole, right, loosens up in the bullpen without a baseball before a game against the Tampa Bay Rays, Friday, May 10, 2024, in St. Petersburg, Fla. Cole is currently on the 60-day disabled list. (AP Photo/Steve Nesius)

• Copy Link copied

SAN FRANCISCO (AP) — New York Yankees ace Gerrit Cole is scheduled to begin a minor league rehab assignment Tuesday with Double-A Somerset.

The reigning AL Cy Young Award winner has been sidelined since spring training with a right elbow injury. There’s no specific timetable yet for his return, but Cole has said it’s possible he could be back in June.

The six-time All-Star started facing hitters in simulated games last month. He threw 43 pitches last Thursday at the team’s complex in Tampa, Florida.

Cole made one spring training start, on March 1, and the Yankees announced 10 days later the 33-year-old right-hander’s elbow was ailing. He was diagnosed with nerve inflammation and edema and told to rest.

He didn’t throw off a mound again until May 5, the first of five bullpen sessions leading up to his initial session against hitters.

It’s expected Cole will make multiple minor league starts before rejoining the Yankees, who lost starting pitcher Clarke Schmidt to a right lat strain last week.

AP MLB: https://apnews.com/hub/mlb

Buccaneers, Merle Hay close to arena deal; mall CEO says construction could start in fall

Construction of a new hockey arena for the Des Moines Buccaneers at Merle Hay Mall could begin as early as this fall, Merle Hay Mall CEO Liz Holland said Tuesday.

Details of a lease between the team and the mall are still being finalized, but are in the closing stages, Holland said.

"We've agreed to principal terms and are working toward completing a final lease," she said.

Lease agreement could save once-foundering Buccaneers arena project

The signing of the lease and the start of construction would represent a big turnaround from the end of 2023, when the mall and the team were struggling to find a way to make the project work and keep $26.5 million in state financing approved in 2021.

The original proposal, in the works since 2020, called for the Bucs, a Tier 1 junior team of the United States Hockey League, to buy and convert the mall's former Younkers department store, empty since 2018, into a new arena to replace their aging facility at 7201 Hickman Road in Urbandale.

The project is envisioned to benefit both the team and the 65-year-old mall, which has been converting its mix of tenants from mainly retail to a mix of restaurants, entertainment and other activities.

With the support of Urbandale, where the ex-Younkers store is located, the arena plan was among projects around the state that won a share of $100 million in special reinvestment district financing from the Iowa Economic Development Authority in 2021. It allows Urbandale to keep tax revenues from the site that usually would go to the state and in turn use the funds to back a bond issue to help cover the project's costs.

The mall straddles the Urbandale-Des Moines line, and both Des Moines and Polk County also endorsed the project. The cities and county pledged additional support.

The Bucs held a ceremonial groundbreaking in May 2022, but then repeatedly delayed work amid difficulties raising the rest of the estimated cost, which rose to $58.9 million from $40 million with rapid inflation in material prices. In July 2023, the arena's designer, North Dakota-based ICON Architectural Group, sued the Bucs and the owners of the mall, alleging they had  failed to pay more than $1.1 million owed for design services.

The Bucs said they were looking at alternatives to the mall site, and in November, Urbandale, Des Moines and Polk County set a Dec. 31 deadline for the team and the mall to reach an agreement or return the special reinvestment district funding to the state.

The parties missed that deadline, but the IEDA in January gave them an extension to June .

Mall-owned arena could be used for events other than hockey

Bucs owner Michael Devlin did not respond to a phone message from the Register on Tuesday. But Holland has said the plan is for the Bucs to become the signature tenant of a mall-owned, 4,000-seat arena, with a private management firm operating the facility. It could be used for basketball, volleyball, pickleball tournaments, concerts and other events when not hosting the Bucs' 30 annual home games.

Team President Nate Teut said Tuesday he was not privy to the lease negotiations, but that a move to a new facility in the mall would be a boon for the Buccaneers, whose 62-year-old arena is rated as being in "below normal" condition by the Polk County Property Appraiser's Office.

It would make it easier for the team to solicit corporate sponsorships and would help the Bucs attracts higher-quality players, Teut said. The league sends players to both colleges and feeder leagues for the National Hockey League, such as the Minnesota Wild-affiliated Iowa Wild, which plays at Des Moines' Wells Fargo Arena.

"Des Moines shows well," Teut said of attracting players, "but a new facility allows us to offer all of the things kids are looking for, things that we are lacking right now. A new arena would be a complete game changer."

The ice at Buccaneer Arena often is in poor quality, and the paint is faded. Teut said previously that lighting and sound systems need to be replaced.

"People love coming to Des Moines. The only drawback is they don’t love Buccaneer Arena," he said in November.

Still unclear is whether another Des Moines project that received a share ― $23.5 million ― of the state reinvestment district funds in 2021 will eventually be built. The planned pro soccer stadium on a remediated Superfund site in downtown Des Moines remains on hold amid elevated construction costs and a quest by the project's backers for more city funds.

Kevin Baskins covers jobs and the economy for the Des Moines Register. Reach him at [email protected] .

Philip Joens covers retail, real estate and RAGBRAI for the Des Moines Register. He can be reached at 515-284-8184, [email protected] or on Twitter @Philip_Joens.

The Federal Register

The daily journal of the united states government, request access.

Due to aggressive automated scraping of FederalRegister.gov and eCFR.gov, programmatic access to these sites is limited to access to our extensive developer APIs.

If you are human user receiving this message, we can add your IP address to a set of IPs that can access FederalRegister.gov & eCFR.gov; complete the CAPTCHA (bot test) below and click "Request Access". This process will be necessary for each IP address you wish to access the site from, requests are valid for approximately one quarter (three months) after which the process may need to be repeated.

An official website of the United States government.

If you want to request a wider IP range, first request access for your current IP, and then use the "Site Feedback" button found in the lower left-hand side to make the request.