Assignment and underletting

Question 1

When is it reasonable to withhold consent for assignment? (2)

Answer 1

1. New tenant’s ability to pay rent
2. Proposed tenant’s use of premises

Question 2

What is assignment?

Answer 2

selling your lease on the exact same terms to someone else

Question 3

What if the lease is silent on assignment and underletting

Answer 3

free to assign/underlet

Question 4

What covenants apply to assignment and underletting?

Answer 4

same as alterations (3)

Question 5

Does s19 bump up apply to assignment? What other statute applies?

Answer 5

Yes.

Also s1 reasonable time (28 days)

Question 6

What is the original tenant’s liability under an old lease? How about the new tenant?

Answer 6

1. remains liable for all covenants for whole of lease term.
2. the new tenant must covenant directly with landlord to observe all tenant covenants

Question 7

What is the original tenant’s liability under a new lease (after 1 Jan 1996)? How about the new tenant?

Answer 7

1. original tenant is released from all covenants unless enter into an AGA which makes them liable for new tenant’s breaches
2. new tenant must observe all covenants

Question 8

When does liability under an AGA end?

Answer 8

If new tenant assigns lease again

Question 9

What if there is no provision in lease about an AGA?

Answer 9

can only be insisted upon if reasonable

Question 10

List the key procedural steps for assignment (4)

Answer 10

1. undertaking for costs
2. licence to assign
3. deed of assignment
4. formal notice of assignment to landlord within 1 month

Question 11

Can the head landlord enforce against undertenant?

Answer 11

No. Unless they enter into a direct covenant

Question 12

List the key procedural steps for underletting (5)

Answer 12

1. undertaking for costs
2. licence to underlet
3. agreement for underlease
4. pre completion searches
5. formal notice of underlease to landlord within 1 month