The Rent Review Specialist
Underletting
Alienation
Alienation is the transfer of property from one person to another.
With business tenancy management, the term 'alienation' when used loosely includes assignment, underletting, sharing occupation, and parting with possession, either or the whole or any part of the premises.
With a business tenancy, assignment is the transfer of the whole of the remainder of the term of tenancy by the tenant to a new tenant.
Normally, the new tenant is sourced by the existing tenant; the tenant and proposed assignee would then either enter into a conditional contract, subject to obtaining the landlord's consent to the assignment, or apply for the landlord's consent before entering into a binding contract with the assignee. The landlord's legal costs, including surveyor's fees, would normally be the responsibility of the tenant. Whether the tenant can obtain any contribution to the landlord's costs from the proposed assignee would be a matter for their agreement. Usually, the landlord's costs would be payable whether or not consent is given and/or whether or not the assignment proceeds. An Undertaking on Costs would normally be required beforehand.
Whether the landlord would be obliged to give consent depends upon the terms of the lease but where the consent cannot be unreasonably withheld (or delayed) or if the Landlord and Tenant Act 1927 prevails then the landlord is obliged per Landlord and Tenant Act 1988 to process the application promptly and can be sued for damages in tort should any unreasonable delay buy the landlord result in the proposed assignee withdrawing from the transaction.
Following the change in the law re privity of contract and the introduction of the Authorised Guarantee Agreement ("AGA"), the lease is likely to specify the criteria that the proposed assignee would have to satisfy to avoid any claim the landlord is being unreasonable. In the early days after the change in the law, the criteria was often draconian, but has generally relaxed since to avoid any adverse effect at rent review. Even so, the criteria in the lease prevails and is not subject to any overriding legislation, regardless of what other landlords may be content with.
With business tenancy management, the term 'alienation' when used loosely includes assignment, underletting, sharing occupation, and parting with possession, either or the whole or any part of the premises.
With a business tenancy, assignment is the transfer of the whole of the remainder of the term of tenancy by the tenant to a new tenant.
Normally, the new tenant is sourced by the existing tenant; the tenant and proposed assignee would then either enter into a conditional contract, subject to obtaining the landlord's consent to the assignment, or apply for the landlord's consent before entering into a binding contract with the assignee. The landlord's legal costs, including surveyor's fees, would normally be the responsibility of the tenant. Whether the tenant can obtain any contribution to the landlord's costs from the proposed assignee would be a matter for their agreement. Usually, the landlord's costs would be payable whether or not consent is given and/or whether or not the assignment proceeds. An Undertaking on Costs would normally be required beforehand.
Whether the landlord would be obliged to give consent depends upon the terms of the lease but where the consent cannot be unreasonably withheld (or delayed) or if the Landlord and Tenant Act 1927 prevails then the landlord is obliged per Landlord and Tenant Act 1988 to process the application promptly and can be sued for damages in tort should any unreasonable delay buy the landlord result in the proposed assignee withdrawing from the transaction.
Following the change in the law re privity of contract and the introduction of the Authorised Guarantee Agreement ("AGA"), the lease is likely to specify the criteria that the proposed assignee would have to satisfy to avoid any claim the landlord is being unreasonable. In the early days after the change in the law, the criteria was often draconian, but has generally relaxed since to avoid any adverse effect at rent review. Even so, the criteria in the lease prevails and is not subject to any overriding legislation, regardless of what other landlords may be content with.