Completion and post-completion steps (Procedural steps for the grant of a lease or underlease)- FS

Question 1

What is a Licence to Underlet and when is it required?

Answer 1

It is formal consent from the original landlord permitting the head tenant to sublet. Required when a lease includes a subletting arrangement.

Question 2

What documents are typically gathered before lease completion?

Answer 2

• Agreement to lease
• Draft lease/underlease
• Land Registry title documents
• Landlord’s insurance policy
• Licence to underlet (if applicable)

Question 3

What is apportionment in lease transactions?

Answer 3

In a commercial lease, where the seller (current tenant) has paid rent in advance to the landlord and completion falls between rent payment dates the buyer reimburses the seller for the period from completion to the next rent payment date.

Question 4

Is SDLT (Stamp Duty Land Tax) payable on leases?

Answer 4

Yes, SDLT is potentially payable on:

• Any premium (capital sum paid on the grant)
• The rent payable under the lease

Question 5

Is it compulsory to register a lease of exactly 10 years?

Answer 5

Yes. Leases of 7 years or more must be registered at the Land Registry with their own title, even if the landlord’s freehold is unregistered.

Question 6

Can a lease of less than 7 years be registered at the Land Registry?

Answer 6

No, not in its own right. However, it can be voluntarily noted against the landlord’s title, but it won’t receive its own title number.

Question 7

Does the registration requirement depend on whether the freehold is registered?

Answer 7

No. Leases ≥7 years must be registered regardless of whether the freehold title is registered or not.

Question 8

What happens if a 5-year lease is granted—can it be registered in its own right?

Answer 8

No. Leases under 7 years are not capable of standalone registration at the Land Registry.