Commercial Lease Assignment Solicitors in London
Transferring a business lease to a new tenant? We handle landlord consent, the licence to assign, guarantees, SDLT and Land Registry, so your assignment completes on time.
A commercial lease assignment transfers an existing business lease from the current tenant (the assignor) to a new tenant (the assignee) for the rest of its term, usually with the landlord’s written consent. The new tenant takes over the rent, repairs and every other lease obligation; the outgoing tenant may be released or may have to guarantee the new tenant.
Adam Bernard Solicitors acts for outgoing tenants, incoming tenants and landlords on lease assignments across London, from our offices in High Holborn and Upton Park. We handle the landlord’s consent, the licence to assign, the deed of assignment, guarantees, SDLT and Land Registry registration. Call 0207 100 2525 or book a video consultation by Zoom, Teams, WhatsApp or Skype.
Selling a residential leasehold flat? That is handled by our residential conveyancing solicitors.
What is a lease assignment?
A lease assignment is the outright transfer of the tenant’s whole interest in a lease to someone else, who steps into the tenant’s shoes for the remaining term. The landlord and the lease terms stay the same; only the tenant changes.
Three parties are usually involved:
- Assignor — the outgoing tenant.
- Assignee — the incoming tenant (often the buyer of the business).
- Landlord — gives consent and usually sets conditions.
Each party normally instructs its own solicitor. Assignments are common when a business is sold, relocates or no longer needs the premises.
Assignment vs underletting vs surrender
Assignment passes the lease on; underletting creates a new lease beneath yours; surrender hands the lease back to the landlord.
| Assignment | Underletting (subletting) | Surrender | |
|---|---|---|---|
| What happens | Your lease moves to a new tenant | You grant a sub-lease and stay the tenant | The lease ends early by agreement |
| Landlord’s tenant afterwards | The assignee | Still you | Nobody |
| Landlord’s consent | Usually required | Usually required | Landlord must agree |
| Your ongoing liability | Released (post-1995 lease), often via an AGA | Full liability continues | Ends, subject to the deed’s terms |
If you simply want to end your lease, see our surrender of a commercial lease page.
Can my landlord refuse consent to assign?
If your lease says assignment needs the landlord’s consent, the law adds that consent cannot be unreasonably withheld, and the landlord must respond to a written request within a reasonable time.
- Absolute covenant — the lease bans assignment outright. The landlord can say no for any reason.
- Qualified covenant — assignment is allowed with consent. Under section 19(1) of the Landlord and Tenant Act 1927, consent cannot be unreasonably withheld.
- Pre-agreed conditions — for commercial leases granted on or after 1 January 1996, the lease can list conditions the assignee must meet (for example, a profits test). A landlord relying on them is not acting unreasonably — added by section 22 of the Landlord and Tenant (Covenants) Act 1995.
Once you make a written application, section 1 of the Landlord and Tenant Act 1988 requires the landlord, within a reasonable time, to give consent (unless refusal is reasonable) and to serve written notice of the decision with any conditions or reasons. Any condition must itself be reasonable, and it is for the landlord to prove a refusal was reasonable. A tenant who suffers loss from an unreasonable delay or refusal can bring a damages claim under section 4. Our civil and commercial litigation team handles these disputes.
How to assign a commercial lease: step by step
Most commercial lease assignments follow seven steps, and the timetable is driven mainly by how quickly the landlord deals with consent.
- Check the lease. Read the alienation clause: is assignment allowed, what conditions apply, and will an authorised guarantee agreement be required? Note whether the lease was granted before or after 1 January 1996.
- Agree heads of terms. The assignor and assignee agree the price (premium), any reverse premium, the completion date and what happens to fixtures and fittings.
- Apply for consent in writing. The assignor’s solicitor sends the landlord a written application with the assignee’s details, accounts and references. The landlord will usually ask for an undertaking to cover its legal costs.
- Landlord’s checks. The landlord assesses the assignee’s financial strength and may ask for a rent deposit, a director’s guarantee or an AGA from the outgoing tenant.
- Due diligence and documents. The assignee’s solicitor raises enquiries, checks title and the service charge position. The documents are agreed: licence to assign, deed of assignment (or TR1), AGA and rent deposit deed.
- Completion. Documents are dated, rent and service charge are apportioned, the premium is paid and keys are handed over. Notice of the assignment is served on the landlord as the lease requires.
- After completion. The assignee files any SDLT return and registers the assignment at HM Land Registry where required.
Licence to assign vs deed of assignment
The licence to assign is the landlord’s formal consent; the deed of assignment (or Land Registry form TR1) is the document that actually transfers the lease.
- Licence to assign — signed by the landlord, assignor and assignee. It records consent and any conditions, and usually contains the assignee’s direct covenant to the landlord to observe the lease.
- Deed of assignment / TR1 — signed by the assignor and assignee. A registered lease is transferred on form TR1.
- Rent deposit deed — sets the terms on which the landlord holds a cash deposit as security for rent and other obligations.
- Authorised guarantee agreement (AGA) — the outgoing tenant guarantees the assignee’s performance (see below).
Is the outgoing tenant still liable after assignment?
It depends on when the lease was granted: for leases granted on or after 1 January 1996, the outgoing tenant is released on a lawful assignment, but the landlord can require an authorised guarantee agreement.
| Lease granted before 1 January 1996 | Lease granted on or after 1 January 1996 | |
|---|---|---|
| Outgoing tenant’s liability | Remains liable for the whole term, even after assignment | Released on a lawful assignment (s.5, 1995 Act) |
| Guarantee | Not needed — liability continues anyway | Landlord may require an AGA (s.16) |
| How far the guarantee reaches | — | Only the immediate assignee; ends when that assignee lawfully assigns on |
Either way, a landlord who wants to recover a fixed charge (rent or service charge) from a former tenant or its guarantor must serve notice within six months of the sum falling due, under section 17 of the 1995 Act. A former tenant who pays in full can ask for an overriding lease under section 19, giving some control back.
Who pays the costs of a lease assignment?
Each party pays its own solicitor; the landlord’s legal costs of giving consent are usually payable by the outgoing tenant under the lease, though the incoming tenant often agrees to cover them as part of the deal.
- Assignor’s own legal fees — paid by the assignor.
- Assignee’s own legal fees, searches, SDLT and Land Registry fees — paid by the assignee.
- Landlord’s legal (and any surveyor’s) fees for the licence — the lease usually puts these on the tenant applying for consent, i.e. the assignor. Who ultimately bears them is negotiable and should be fixed in the heads of terms.
The landlord cannot charge a fee or premium simply for granting consent, but it can require payment of its reasonable legal and other expenses — section 144 of the Law of Property Act 1925. Our fees page explains how we price property work.
Do you pay Stamp Duty on a lease assignment?
SDLT on an assignment is charged only on the price paid for the lease (the premium), not on the rent, using the same non-residential rates as a freehold purchase.
HMRC’s guidance on SDLT for leasehold sales confirms the new owner pays SDLT on the lump sum paid for the assignment, and must file a return if the price is £40,000 or more, even when no tax is due. Current non-residential rates:
| Premium paid | SDLT rate |
|---|---|
| Up to £150,000 | 0% |
| £150,001 to £250,000 | 2% |
| Over £250,000 | 5% |
A reverse premium (where the outgoing tenant pays the incoming tenant to take the lease) is not chargeable consideration (HMRC manual SDLTM04110). Any return must be filed and tax paid within 14 days of completion — see Stamp Duty Land Tax on GOV.UK. Property in Wales pays Land Transaction Tax instead.
Does a lease assignment need registering at HM Land Registry?
Yes, if the lease is already registered, or if it is unregistered and has more than seven years left to run.
- Registered lease — the transfer (form TR1) must be registered; until it is, the legal title stays with the assignor (section 27, Land Registration Act 2002).
- Unregistered lease with more than seven years left — the assignment triggers compulsory first registration (section 4), which must be applied for within two months (section 6).
- Unregistered lease with seven years or less left — no registration needed.
HM Land Registry’s Practice Guide 25: leases – when to register sets out every case.
Security of tenure after assignment
An assignee inherits the lease exactly as it stands, including whether it is protected by the Landlord and Tenant Act 1954 or contracted out of it. A protected lease gives the right to renew at the end of the term under Part II of the 1954 Act; a contracted-out lease does not. Incoming tenants should check this before agreeing a price, especially when only a few years remain. For a brand-new lease instead, see grant of a business lease.
How our lease assignment solicitors help
We act for outgoing tenants, incoming tenants and landlords, and keep the consent process moving so completion is not held up.
- Outgoing tenants: drafting the consent application, limiting AGA exposure, negotiating who pays the landlord’s costs.
- Incoming tenants: due diligence on the lease, service charge and dilapidations; checking 1954 Act status; SDLT and Land Registry.
- Landlords: assessing the assignee, drafting the licence to assign, rent deposit deed and AGA. See acting for the landlord and tenant.
- Business sales: aligning the assignment with the sale agreement, with support from our legal contracts team.
Our solicitors are regulated by the Solicitors Regulation Authority. Speak to our commercial property solicitors on 0207 100 2525, or contact us to arrange a meeting in person or by video.
This page is for general information only and does not constitute legal advice. Last reviewed: 23 October 2026.
Frequently Asked Questions
Who pays lease assignment fees?
Each party pays its own solicitor. The landlord's reasonable legal costs of granting consent are usually payable by the outgoing tenant under the lease, but the incoming tenant often agrees to cover them. The landlord cannot charge a separate fee just for consenting.
What is a licence to assign in commercial property?
A licence to assign is the landlord's formal written consent to the assignment. It is signed by the landlord, the outgoing tenant and the incoming tenant. The lease itself is transferred by a separate deed of assignment or Land Registry form TR1.
Can a landlord refuse to let me assign my commercial lease?
Only if the lease bans assignment outright or refusal is reasonable. Where consent is required, it cannot be unreasonably withheld, and the landlord must reply to a written request within a reasonable time with its decision in writing.
Am I still liable for the lease after assigning it?
For leases granted on or after 1 January 1996, you are released when you lawfully assign, but the landlord may require you to sign an authorised guarantee agreement covering the new tenant. For older leases, you remain liable for the whole term.
What is an authorised guarantee agreement?
An authorised guarantee agreement (AGA) is a guarantee by the outgoing tenant that the incoming tenant will meet the lease obligations. It covers only the immediate assignee and ends when that tenant lawfully assigns the lease on.
Is Stamp Duty payable on a lease assignment?
SDLT is charged only on any premium paid for the lease, at non-residential rates of 0% up to £150,000, 2% to £250,000 and 5% above. A return is needed if the premium is £40,000 or more, even if no tax is due.
Does a lease assignment have to be registered at the Land Registry?
Yes, if the lease is already registered, or if it is unregistered with more than seven years left to run. Until a registered lease's transfer is registered, legal title stays with the outgoing tenant.
What is the difference between assigning and subletting a lease?
Assigning transfers your whole lease to a new tenant, who becomes the landlord's tenant. Subletting grants a new, shorter lease beneath yours, and you stay fully liable to your landlord.
Request a Consultation
Our Clients Share Their Success Stories.
Good service 👍 👌 many thanks for the great service you have provided to us. Our visa got approved just within 2 weeks only because of your hardwork and subject matter expertise. I am very thankful to you
For me, it was the attitude towards the job the lawyers displayed. Totally unmatched. I've been in and out of law firms because of the divorce with my wife and other related issues but Adam Bernard Solicitors was it for me guys. The best!
I want to thank Adam Benard team, they really helped me in my process of purchasing a property, their team are listen and respond to their customers fast. I really love your service, thanks alot.
Adam Bernard team helped me to purchase the best property for the best amount of time for the best money i have . i personally love dealing with them and i thank the team for all the efforts they made to make the task better .
