Transferring a commercial lease, known legally as a lease assignment, involves passing the rights and obligations of an existing lease from one tenant to another. It requires landlord consent, careful review of the original lease terms and proper legal documentation throughout.
Our commercial lease solicitors handle the full assignment process for both outgoing and incoming tenants across England and Wales. Fixed legal fees and no hidden costs, guaranteed.
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What is a commercial lease transfer?
A commercial lease transfer, or assignment, is the process by which an existing tenant passes their leasehold interest in a property to a new tenant. The incoming tenant takes on the rights and obligations set out in the original lease, though some terms may be renegotiated as part of the process.
Lease assignments are common when a business is sold, when a tenant can no longer occupy the premises, or when a landlord agrees to allow a change of occupier. In all cases, the landlord's written consent is required before the transfer can proceed.
The commercial lease transfer process
The process of transferring the lease typically involves:
1. Reviewing your existing lease agreement
Review the lease agreement carefully to ensure you understand all the conditions and terms for the transfer. Be sure to pay attention to clauses that pertain to subletting, ownership change, and landlord consent.
2. Getting the landlord's approval
It is essential to get the landlord's/freeholder's written permission before transferring the lease. Most landlords have certain criteria they require to be met in order to approve a transfer of tenancy. It may be necessary to evaluate the new owner's financial stability and ability to run a business and if the building is fit for purpose.
3. Creating a lease agreement
A lease agreement is required to formalise the transfer. It must be signed by both parties. This document details the responsibilities and obligations of the new tenant, while releasing the original tenant.
4. Signing the lease agreement
Both parties must sign the agreement in front of witnesses or a notary public once the finalisation is complete.
5. Submitting all required documentation
Provide all the documentation required to transfer the lease, including the signed agreement, financial statements and business plans.
6. Notifying relevant parties
It is important to inform all parties involved, including vendors, suppliers and customers, once the transfer of lease has been approved. Update all contact information to ensure smooth transitions for all parties involved.
Documents required for a lease assignment
Your solicitor will handle the preparation and review of documentation throughout. The key documents typically involved are:
- The original lease agreement
- The landlord's written consent to assign
- The deed of assignment, signed by both parties
- Financial information about the incoming tenant (to satisfy landlord requirements)
- Evidence of buildings insurance obtained by the new tenant
- Any licence to assign, if required under the terms of the original lease
Additional documents may be required depending on the specific terms of the lease or the landlord's conditions. Your solicitor will advise you on exactly what is needed once they have reviewed the lease.
How long does a commercial lease transfer take?
A straightforward lease assignment typically takes 6 to 8 weeks from instruction to completion. The main variable is the landlord's responsiveness, as delays in obtaining consent are the most common cause of transactions taking longer. Starting the process as early as possible gives all parties adequate time to review and approve the transfer.
Commercial lease transfer fees
Our fees are fixed and transparent. For a straightforward lease transfer, our legal fees start from £850 plus VAT, giving a total legal fee from £1,020.
Disbursements
In addition to legal fees, you should budget for the following:
- Land Registry fee: £40 to £910 depending on the lease value
- Search fees: £350 to £500 where searches are required
- Bank transfer fee: £35 per transfer
- ID verification: £10 per person
- Stamp Duty Land Tax: variable, calculated on the lease premium or rent (see FAQ below)
We will itemise all expected disbursements in your quote so you know the full cost before you commit.
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Get in touch for your commercial lease transfer
Whether you are the outgoing or incoming tenant, our solicitors are ready to help. Fill in the form below for an instant quote, or call us free on .
Frequently asked questions about commercial lease transfer
What is the difference between a lease transfer and a lease assignment?
They are the same thing. "Lease transfer" is the common term people use; "assignment" is the correct legal term. Both refer to the process of transferring an existing lease from one tenant to another with the landlord's consent.
Do I need a solicitor to transfer a commercial lease?
Yes. A lease assignment is a legally binding transaction involving complex documentation and landlord negotiations. A solicitor ensures the deed of assignment is properly drafted, the landlord's consent is obtained correctly and your interests are protected throughout.
Does the landlord have to agree to a lease transfer?
In most cases, yes. Most commercial leases require the landlord's written consent before an assignment can take place. Landlords can refuse consent on reasonable grounds, such as concerns about the incoming tenant's financial standing, but cannot withhold consent unreasonably.
How long does a commercial lease transfer take?
Most straightforward assignments complete in 6 to 8 weeks. The main factor affecting timescales is how quickly the landlord responds and whether any conditions are attached to their consent. Starting the process early gives all parties sufficient time.
What is a deed of assignment?
A deed of assignment is the legal document that formally transfers the lease from the outgoing tenant to the incoming one. It sets out the transfer date, any changes to the original lease terms and the obligations of each party. It must be signed by both parties and witnessed.
Will I pay Stamp Duty Land Tax on a lease assignment?
SDLT may be payable depending on whether a premium is paid for the assignment and the level of rent under the lease. Your solicitor will calculate any SDLT liability and file the return with HMRC within 14 days of completion if applicable.
Does a lease assignment need to be registered at Land Registry?
If the lease has more than seven years remaining at the point of assignment, the transfer must be registered at HM Land Registry. Your solicitor will handle this as part of the post-completion process.
What happens to the original tenant's liability after assignment?
This depends on when the lease was granted. For leases granted after 1 January 1996, the outgoing tenant is generally released from future obligations once the assignment completes. For older leases, the original tenant may retain some liability. Your solicitor will advise you on your specific position.
