Procedural Steps for the Assignment of a Lease

Vocabulary flashcards outlining the legal terms, documents, and procedures involved in the assignment of a commercial lease under English law and SQE1 requirements.

Assignment

The transfer of an existing lease by the tenant, referred to as the seller or assignor, to a third party, referred to as the buyer or assignee.

Assignor

The tenant in a lease transaction who is transferring the existing lease to a third party.

Assignee

The third party in a lease transaction to whom an existing lease is being transferred.

Licence to assign

A formal document, which must be in the form of a deed, where the landlord grants consent to the assignor to assign the lease to the assignee.

Authorised guarantee agreement (AGA)

A covenant where the assignor guarantees that the assignee will perform the tenant’s covenants, typically required for a 'new lease' granted on or after $1\,January\,1996$.

Old lease

A lease granted before $1\,January\,1996$, where the assignee is liable under the doctrine of privity of estate for covenants that 'touch and concern' the land.

New lease

A lease granted on or after $1\,January\,1996$ under the Landlord and Tenant (Covenants) Act $1995$, where the assignee is released from covenants upon a future assignment.

Privity of estate

The legal relationship between landlord and assignee of an old lease, making the assignee liable for covenants that 'touch and concern' the land while the lease is vested in them.

Privity of contract

A direct contractual relationship which is often created between a landlord and an assignee via a direct covenant in a licence to assign.

TR1

The prescribed form under the Land Registration Rules $2003$ used for the assignment of a registered lease or an unregistered lease exceeding $7$ years in length.

Deed of assignment

A format used for the transfer of legal title for a lease of $7$ years or less, as it does not trigger compulsory first registration.

Good leasehold title

A Land Registry title designation where there is no guarantee of the soundness of the freehold title, typically requiring the assignee to insist on deduction of the freehold title.

Absolute title

A Land Registry title designation where the leasehold title is guaranteed, meaning the assignee generally does not need to investigate the freehold title.

OS1

An official search of the registers of the leasehold title carried out pre-completion to check for new entries and secure a priority period for registration.

Apportionments

The process on completion where the assignee reimburses the assignor for outgoings paid in advance, such as rent or insurance premiums, for the period from completion until the next payment date.

Section $45(2)$ of the LPA $1925$

The statutory provision stating that upon production of the receipt for the last rent due, the assignee must assume the rent has been paid and covenants performed.

SCs (Standard Conditions) regarding consent

Contractual conditions allowing either party to rescind if landlord's consent is not given $3\,working\,days$ before the completion date.

SCPCs (Standard Commercial Property Conditions) regarding consent

Contractual conditions providing that if landlord's consent is not obtained by completion, completion is postponed and rescission is only possible after $6\,months$.