When you are a Tenant under a Lease you have an agreement with the Landlord until the Lease ends. A Tenant’s plans can change during the Lease and the Tenant may no longer want the Lease.
There are three ways for a Tenant to dispose of the Lease, all of which will require the Landlord’s consent.
Ellis Jones’ Commercial Property Team is able to assist Landlords, or Tenants, or the new Tenant (in the case of an assignment) or sub Tenant (in the case of a subletting) with all Legal aspects involved.
Assigning a Lease
Before a Lease can be assigned the Lease needs to be checked to see if assigning is allowed and what must be done to allow assigning.
The Landlord’s consent is usually needed as the Landlord will want to be sure the new Tenant is suitable and able to pay the rent.
The outgoing Tenant will usually have to pay the Landlord’s legal costs for the consent.
The Landlord may have a number of requirements, such as an Authorised Guarantee Agreement (AGA) where the outgoing Tenant guarantees the new Tenant, a Rent Deposit or any other requirements that the Lease may identify.
A Landlord cannot unreasonably refuse or delay in giving consent where a Lease allows Assigning.
Subleases (also known as Underleases)
The information below is a basic outline of the process of Subletting. There are a number of other elements that
As with Assigning a Lease, before a Sublease can be created, the Lease needs to checked to see if Subletting is allowed and what must be done to allow Subletting.
The Landlord’s consent is usually needed in common with Assigning a Lease
The Sublease will usually have to reflect the Lease
The Sublease must be shorter than the Lease
A Landlord cannot unreasonably refuse or delay in giving consent where a Lease allows Subleases.
A Sublease is a new lease, and so will involve all of the process of granting a lease – for further information please see “Drafting and Negotiating Leases”
Surrenders of Lease
A Lease can be surrendered if the Landlord and the Tenant agree. A Surrender brings the Lease to an end.
Either the Landlord or the Tenant can ask for a Surrender but neither is obliged to agree to such a request.
There are numerous ways for a Surrender to take effect but the most common method is a signed written document.
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For all of your commercial property needs please contact:
Charminster: 01202 636227
Canford Cliffs: 01202 709898
or email: commprop@ellisjones.co.uk
