Leases: Assignments

by Practical Law Property

A note that discusses the issues to consider when drafting and negotiating an assignment clause in a commercial lease. This note examines the restrictions on a tenant's ability to assign a lease, which landlords often include to maintain control over the identity and financial standing of their tenants. It explores the statutory framework governing landlord's consent, including the duties imposed by the Landlord and Tenant Act 1988 (LTA 1988) and the implications of section 19(1) of the Landlord and Tenant Act 1927 (LTA 1927). The guidance also details the use of section 19(1A) agreements in qualifying leases to pre-define reasonable grounds for refusing consent. A significant focus of this note is the role of Authorised Guarantee Agreements (AGAs) under the Landlord and Tenant (Covenants) Act 1995 (LTCA 1995), including their content and the complex rules surrounding guarantors, as clarified in cases like Good Harvest Partnership LLP v Centaur Services Ltd [2010] EWHC 330 (Ch) and K/S Victoria Street v House of Fraser (Stores Management) Ltd [2011] EWCA Civ 904.