Drafting - L2A

Question 1

What are some precedent key headings for a license to assign?

Answer 1

Heading, Parties, Definitions (or Agreed terms and Interpretations), Background, Consent to assign, Assignees covenants, Tenant’s/Assignor’s covenants, AGA, costs, right of re-entry, indemnity, notices, liability, Contracts (RoTP) Act 1999/third party rights, law and J, execution, Schedule: AGA.

Question 2

What is on the front page of a license to assign?

Answer 2

Date, license to assign relating to lease of land at [property address including postcode] between [landlord] and [tenant] and [assignee].

Question 3

What goes in the headings/introduction above the parties?

Answer 3

This deed is dated Xx, HM land registry, landlords title number, tenants title number.

Question 4

What comes after the heading?

Answer 4

Parties - List out the parties in capital letters, inc and registered in X with company number X, whose registered office is at X (‘Landlord’). Remember LL, T and A are all parties.

Question 5

How many parties are there to a license to assign?

Answer 5

Three: landlord, tenant, assignee.

Question 6

What might go in the background section of a license to assign?

Answer 6

This license is supplemental and collateral to the lease, the Landlord is entitled to the immediate reversion of the lease, the residue of the term granted by the lease is vested in the tenant, the tenant intends to sign the deeds to the Assignee and under the terms of the lease, requires the consent of the landlord for that assignment.

Question 7

What might go in the agreed terms/definitions?

Answer 7

Authorised guarantee agreement, lease, property, 1954 act. The parties should have been defined in the parties section.

Question 8

How might you define AGA?

Answer 8

The authorised guarantee agreement in the form set out in the schedule to this license.

Question 9

How might you define a lease?

Answer 9

A lease of the property dated X and made between the landlord and the tenant, and all documents supplemental or collateral to that lease.

Question 10

How might you define the property?

Answer 10

List out the full address including the postcode, as devised by the Lease.

Question 11

How might you define the 1954 Act?

Answer 11

Landlord and Tenant Act 1954.

Question 12

What does ‘Landlord’ refer to?

Answer 12

Landlord includes a reference to the person entitled for the time being to the immediate revision of the lease.

Question 13

What does ‘Tenant covenants’ mean?

Answer 13

Tenant covenants has the meaning given to it by the Landlord and Tenant Covenants Act 1995.

Question 14

What does ‘Completion of the assignment’ refer to?

Answer 14

References are to the date on which the deed of assignment to the assignees is dated and not to the registration of that deed at the land registry.

Question 15

What does ‘A person’ include?

Answer 15

A person includes a corporate or unincorporated body.

Question 16

How is ‘Assignment’ defined?

Answer 16

Assignment means the assignment permitted by clause X.

Question 17

How is ‘Assignment Date’ defined?

Answer 17

Assignment Date means the date of the deed of assignment of the lease to the assignee.

Question 18

How is ‘Lease’ defined?

Answer 18

Lease means the lease of address dated X made between the landlord and the tenant and all documents supplemental or collateral to that lease.

Question 19

How is ‘Property’ defined?

Answer 19

Property means address as comprised in the lease.

Question 20

How is ‘Rent’ defined?

Answer 20

Rent means the rent or rents payable under the lease.

Question 21

What is the Consent to Assign clause?

Answer 21

In consideration of obligations on A and T in this licence and at T’s request, LL consents to T assigning the lease to A. Consent valid for 3 months from and including the date of this licence. If not contemplated, LL may give notice to extend the period of validity. If consent ceases to be valid and LL does not give notice extending, all terms of this license except 2.1 (LL consent) shall remain in force. It is a condition of this consent that T enters AGA. It is a condition of this consent that none of the circumstances set out in clauses X-Y of the Lease have come into existence before completion of the assignment. This consent does not obviate the need for consent or licence of any other person than the LL that might be required for the assign.

Question 22

What are the assignees’ covenants?

Answer 22

Assignees covenant not to occupy or take possession of whole or part of property before the assignment date. Within X days after the assignment date, give to landlord written notice of the date assignment completed, name and address of person to whom future rent demands should be sent, certified copy of the document relating to assignment for registration, registration fee specified in clause X of lease.

Question 23

What are the Tenant’s covenants?

Answer 23

Tenant covenants not to allow assignee to enter occupation/possession of whole/part of the property before the assignment date. On completion of the license, to pay reasonable costs and disbursements of LL solicitors and managing agents in connection with the license, extending to those assessed on a full indemnity basis and value added tax regarding those costs/disbursements except to the extent LL is able to recover VAT.

Question 24

What is the AGA section?

Answer 24

From and including the assignment date and throughout the period, assignees are bound by tenant covenants of lease, tenant must covenant with LL in terms of the authorised guarantee agreement set out in schedule. Obligations on T in AGA are made in consideration of consent granted in clause 2.1 and AGA made pursuant to condition in clause 23 (consent).

Question 25

What are the costs if not included in Tenant's covenants?

Answer 25

On completion of the license, T shall pay C+D of LL solicitors and managing agents in connection with the license. Extends to C+D assessed on a full indemnity basis and to any VAT in respect of those C+D except to the extent LL can recover VAT.

Question 26

How is the right of re-entry defined in the lease?

Answer 26

The right of re-entry in the lease shall be exercisable if any covenant/condition of license is breached as well as if any event stated in provision for re-entry in lease occurs.

Question 27

What is the indemnity clause?

Answer 27

The tenant and the assignees shall indemnify the landlord against all liabilities, costs, expenses, damages and losses suffered or incurred by landlord arising out of or in connection with any breach of their respective terms of this license.

Question 28

Does the license give rise to rights under the Contracts (Rights of Third Parties) Act 1999?

Answer 28

No, the license does not give rise to any rights under the Contracts (Rights of Third Parties) Act 1999 to force any terms of this license.

Question 29

How is the law and jurisdiction clause drafted?

Answer 29

The parties agree that this license shall be exclusively governed by and interpreted in accordance with the laws of England and Wales and has submitted to the exclusive jurisdiction of the English courts.

Question 30

How is the execution clause drafted?

Answer 30

This document has been executed as a deed and is delivered and takes effect on the date stated at the beginning of it.

Question 31

What headings might you find in the AGA?

Answer 31

Guarantee and indemnity, tenant's liability, tenant to take a new lease, variations and supplemental documents.

Question 32

What content goes in the guarantee and indemnity clause of the AGA?

Answer 32

T guarantees to landlord that he pays rent and observes and performs his TC of lease and if fails to, T shall pay or observe and perform them. Tenant covenants with landlord as principal applicable and as separate and independent obligation, and liability from obligations/liabilities as previously stated, and indemnify the landlord against failure of A to pay rent/observe perform TC of lease.

Question 33

What content goes in the tenant's liability section?

Answer 33

Liability of the tenant under clause 1 continues until the end of lease term or until A is released from covenants in lease by LTCA 1995 if earlier. Any sum payable by T under AGA shall be paid without deduction, set off, counterclaim against LL or A.

Question 34

What content goes under the heading tenant to take a new lease?

Answer 34

If liability is disclaimed and LL gives T written notice within six months of receiving notice of disclaimer, T shall enter new lease on terms set out at XX. Rights and obligations under new lease shall take effect beginning on date of disclaimer and new lease shall: be granted subject to right of any person to have lease vested by court/term that expires on the same date as contractual term granted by lease/reserve initial annual rent at date of disclaimer in/otherwise be same terms as lease. T pays LL solicitors costs/deed on full indemnity basis and any VAT regarding new lease and execute and deliver to LL counterpart of new lease within one month after service. Grant of new lease and acceptance by tenant without prejudice to any other rights of landlord against tenant or others in respect of the security LL may have in connection with Lease.