Lease Management Solicitors
Whether your portfolio is big or small, we can help with the day to day tasks of lease management, allowing you to focus on the needs of your business. Through experience, we know how important it is to have leases completed fast but with extensive attention to detail, which is why our team of lease specialist solicitors focus on working with you to deliver the best results.
Assignment of a lease
Assignment of a lease allows for you to pass the lease to another business, allowing for you to leave the lease early. A clause allowing for the assignment of a lease is typically found within commercial property contracts and permission will then usually be given as a formal License to Assign by the landlord when discussed.
With an assignment of a lease, the new tenants have to meet the terms set out in your contract from the original landlord as you remain responsible under this contract. It is important for you to check your original lease for time constraints, as it may not be possible to assign a lease if you are on a short term lease or close to the end of the lease. The landlord will also likely want to check assignee is suitable, similar to any pre-lease checks you may have gone through. This will likely include:
●checking the 3rd parties' finances
● viewing their references
●reviewing the 3rd parties' use of the premise and whether they will need alterations to the building
We can help you with this. Just get in touch!
What responsibility will the original tenant have?
As the original tenant, you still have liability if the assignee breaches the contract, including if they miss a payment. To ensure you are protected when you assign a lease it is advised that you contact a solicitor specialising in lease management.
Alternative options to the assignment of a lease
Assigning a lease can be a slow process, and it is more than likely you will incur costs. If you are looking to be free from your lease there are likely to be other options found within your contract allowing you to do this, such as a break clause, or you could negotiate with your landlord to leave the contract early.
Negotiating to exit the lease is likely to contain specific terms agreed on by you and your landlord. If there is no break clause within your lease then negotiating with your landlord could be useful. It is likely your landlord will include a fee and the end of the lease is more likely to be a clean break than a lease assignment meaning you will no longer have liability over the property. As this is negotiating out-with your contract, you but to make sure you're doing it correctly and not creating conflict with your current contract as this could create issues for you in the future.
Subletting
Dependent on the terms of your current lease, you could sublet the property. This means you become a landlord while remaining under obligation to your landlord, and allowing for a new tenant to use the property.
How can I sublet my leased property?
To sublet you must have permission from your landlord, either within your lease or negotiated with after. Longer lets are more likely to include a term allowing you to sublet, but this isn't definite. The rights of the new tenant can not extend further than the rights that you have been given over the property through your initial lease. This includes the use of the property, it must remain the same use as when you used it unless you have written consent from the original landlord for a change of use.
What is involved in subletting?
Depending on the terms of your lease, it may be possible to sublet part rather than all of the property. There could be practical challenges involved in this and it is important to consider questions such as:
● Where and how much of the property are you going to sublet?
● How will the subtenant have access to this space?
● Will this impact on your business needs?
● Are there shared facilities across the areas, eg communal spaces, toilets, and kitchens?
● Will the subtenant have access to these or have their own?
You will be liable as far as your responsibilities under your current lease lie for security, utilities, services and repairs.
Renewals
Businesses often have protection under the Landlord and Tenant Act 1954, and in certain circumstances, this also gives rights when it comes to renewing a lease.
It is best to negotiate a renewal of your lease 6-12 months before end as this allows time for renegotiating, which is important for landlords and tenants. It is also important to note that the lease renewal process has to be initiated, if it is not then the same terms will continue in a process known as 'holding over'. Landlords can initiate this procedure under the legislation, but they can also refuse to renew a lease. If a landlord refuses a renewal, they have to explain why and on what grounds.
The most common reasons for a landlord to reject a renewal of a lease is;
●the landlord requires premises for the purpose of their own business
●redevelopment of premises
●non-payment of rent by the tenant
●breach of covenant to repair
Licences for alterations
Consent for alterations will likely be needed from the landlord in the form of a document known as the licence for alterations. Permission must be sought for any changes to the structure, including removing or adding walls or new service installations. The need for a licence for alteration depends on what work you want to be carried out along with what your lease states, but it is crucial you ensure you aren't breaching your lease.
Internal alterations
Your landlord is likely to be okay with internal alterations, but you still must seek permission, but the landlord could only refuse with a reasonable objection. It is important to check your lease as some won't require landlords' consent, but this is rare and you should consult a professional to ensure you aren't in breach of your contract.
Why do you need permission for alterations?
Licences for alterations are important to landlords as they keep a record of the work carried out in the property. For the tenant, there may be a reinstatement clause featured in your lease which will outline how the property must be returned to the landlord at the end of your lease. Knowing what alterations have been made will allow you to see what the property should be when returned.
Alterations could impact the financial value of the building, or even impact the safety of the building which has lasting consequences for the landlord that they must consider. There's also the possibility of the changes being very specific making it difficult to re-let the property in the future.
If planning is required for alterations, it would be advisable for the landlord to ensure this is actually in place otherwise you may be liable. It is crucial for both landlords and tenants to have this in place.
Licence for alterations process
Licenses for alterations have to be decided case by case. Generally, the process follows this pattern:
●the description is provided by the leaseholder (plans, drawings, structural calculations)
● review of plans by the landlord and their surveyor
●decision on if consent is to be given, and conditions of consent will also be reached
●the landlord may include clauses allowing them to monitor the progress, inspect the works and restrictions on when the work can be carried out.
●the conditions are discussed and agreed upon with the tenant
You should have licences for alterations before the work begins, and planning permission if it is needed.
Why choose us?
At Blacks Legal, we know that lease management is challenging. That's why we always aim to provide fast and efficient legal advice to help you get the best results possible no matter where you are on your commercial property journey.
With our client-friendly approach, we will always have your needs at the centre of what we do, keeping you updated every step of the way.
Commercial Property Solicitors London, Essex, Hertfordshire & Kent
Our expert team specialising in commercial property matters provide the professional service you are looking for, delivering the high-quality results you deserve.
Contact our team today on 020 3500 7471 or visit our online enquiry form and one of our team will get back to you.