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Assignments and Underletting
We act for both landlords and tenants in disputes concerning assignments and underletting of commercial leases. Disputes can arise for a variety of reasons - these include but are not limited to:
- A tenant wishing to assign or underlet but the landlord will not consent or will only consent subject to certain conditions being accepted by the tenant
- A tenant already entering into an assignment or underletting without the landlord’s consent
- A landlord wishing to assign its reversion and requires a release from the covenants given to the tenant in the lease but the tenant is unwilling to provide a release
- Whether the requisite notice of an assignment or underletting has been given
- The enforceability of a guarantee given on behalf of a party to an assignment or underletting
How JMW Can Help
Our team can advise on all aspects of assignment and underletting disputes, including the service of relevant notices. We can also assist before any dispute arises by providing advice on the ability to assign/underlet under the terms of a lease and any pre-conditions that may apply in the process.
Is consent from a landlord necessary in order to assign or underlet a lease?
This will depend on the terms of the lease; some leases do not impose any restrictions on a tenant’s ability to assign or grant an underlease. However, most modern leases provide that a tenant must obtain the landlord’s consent to an assignment or the grant of an underlease.
What are the consequences of assigning a lease or granting an under-lease without the landlord’s consent?
Subject to the landlord’s consent to an assignment or underletting being required by the lease, if there is an assignment or underletting without such consent, it can amount to a breach of the lease. For more information in relation to breaches of covenants in a commercial lease, click here.
Depending on when the lease was granted, an assignment without consent where required can also impact on whether the party that has assigned the lease is released from its liability for the covenants in the lease.
Can a landlord impose conditions for consent to an assignment or underletting?
Subject to the terms of the lease, it is possible for a landlord to impose conditions for consent to an assignment or underletting. Typical examples of conditions include:
- The entity taking the assignment or underletting is of sufficient financial standing
- The party making the assignment enter into a guarantee of the lease covenants and payment of the landlord’s legal costs in relation to the assignment or underletting
In relation to assignments, provided certain conditions apply, a landlord must not unreasonably withhold consent to an assignment. If the landlord is imposing onerous or irrelevant conditions, it is possible to ask the Court for a declaration that the landlord is unreasonably withholding consent as a result. Our team has experience of acting for both landlords and tenants in such applications.
Talk to Us
If you have a query with regards to assignments or underletting, please call 0345 872 6666 and one of our real estate litigation solicitors will be happy to discuss this with you. Alternatively, fill in our online enquiry form and we will get back to you.