Assignment of Lease to a New Tenant in Edinburgh

Assigning a lease permits a tenant of business premises to be free of their contract before the specified date. Whether you are a landlord or a tenant, if you are handling the assignment of lease you need to seek expert legal advice. A solicitor with experience in commercial leaseholds will be able to discuss your various options with you, explaining how the process works, negotiating a deal and finalising the legalities of the agreement.

How To Get Out of a Lease

A business lease is a formal contract between landlord and tenant, and is enforceable until the lease reaches its end. Sometimes, however, your circumstances as a tenant will change and you will wish to relinquish the lease on your commercial premises before the specified date. There are 3 main ways by which you can do this:-

1. Lease termination

When a lease agreement is drawn up, it often includes a number of break clauses. These are named dates that allow you to terminate the lease as you would at the end of your tenure. You need to be aware of when these break clauses are, as this is one of the quickest and most cost-effective ways of getting out of a lease, leaving you with no further liability for the premises.

2. Subletting

Depending upon the terms of the lease, a landlord may allow you to sublet your commercial premises. There may be certain stipulations – for example, you can sublet the first floor, or you can only sublet the premises in its entirety. Either way, you will need permission from the landlord. Furthermore, you will retain responsibility for the premises (unless the terms of the sublet lease state otherwise).

3. Assignment

Lastly, you may want to consider assigning the lease. Again, your ability to do this depends on the conditions laid out in the original lease, but if the landlord does agree, you will be able to sell the remainder of your lease to another tenant. Even if assignment is permitted, however, a landlord may still refuse a prospective tenant if he has reasonable grounds to do so.

Assignment of Commercial Property – What You Need To Know

Assignment is when the remainder of a lease’s term is transferred to a third party, allowing the existing tenant to move out. To assign your lease to someone else, you must first seek permission from the landlord. More often than not, a landlord will then want to run certain checks on the new tenant – namely, looking at financial references.

If there are reasonable grounds to deny a proposed tenant (for example because they are financially unstable) then a landlord is within his right to do so. Alternatively, a landlord may stipulate that you, as the original tenant, must take responsibility for the new tenant’s next payments. Therefore assignments do not always free you of liability.

Seek Legal Advice In Edinburgh

If you wish to bring your lease to an end by assigning it to a third party, you need to seek legal advice to discuss you options. If you do decide assignment is the best option for you, a solicitor who specialises in commercial property will be able to negotiate the deal on your behalf, before completing the legal requirements to make the assignment official. This includes preparing:-

The Licence to Assign
An Authorised Guarantee Agreement
Deed of Assignment

Simply call us for a free assessment immediately on 0131 222 8000 or complete the enquiry form on the right of this page and we will be delighted to help you.