UK Law and Practice Contributed by: Colin Rodrigues and Harminder Sandhu, Hawkins Hatton Corporate Lawyers Ltd
6.19 Right to Terminate a Lease The landlord is typically able to forfeit the lease if one of the following events occurs: • any rent is unpaid 14 days after becom - ing payable, whether it has been formally demanded or not; • any breach of any condition or tenant cov - enant in the lease; and/or • the tenant becomes insolvent. Additionally, both parties may have a contractual right to break the lease or negotiate a surrender of the lease. 6.20 Registration Requirements Commercial leases granted for a period of more than seven years are required to be registered at the Land Registry, and registration needs to be completed within two months of the comple - tion of the lease. The responsibility for registra - tion lies with the tenant, as it protects the tenant should the property change ownership. A lease for seven years or less can be noted on the landlord’s title. Any Land Registry fees are to be paid by the tenant and, prior to registra - tion, any SDLT which is payable (see 2.10 Taxes Applicable to a Transaction ) will need to be paid and a certificate obtained for filing at the Land Registry. 6.21 Forced Eviction A landlord can commence forfeiture proceed - ings to end the lease prior to the expiry date on the grounds of the tenant’s default. How long the process takes is dependent on various factors, including whether the tenant seeks relief from forfeiture.
• the landlord has offered the tenant the avail - ability of alternative accommodation; • a subtenant is in place at the property and possession is required for letting or disposing of the whole property; • the landlord intends to demolish or recon - struct the property; and/or • the landlord intends that its own business should occupy the building. 6.18 Right to Assign a Leasehold Interest Most commercial leases include the right for a tenant to assign its interest or to sublease. This is subject to obtaining the landlord’s consent by virtue of a licence to assign/sublease. A landlord will permit an assignment subject to conditions, including: • the new tenant (“assignee”) providing a rent deposit to the landlord (pursuant to a rent deposit deed) as security for performance of the obligations under the lease; and • an authorised guarantee agreement (AGA) whereby the original tenant (“assignor”) will guarantee the performance by the assignee of the obligations under the lease. Regarding a sublease, this is a contract between the original tenant and the new tenant (subten - ant) whereby the subtenant takes over the rented premises and pays rental directly to the original tenant, and the original tenant remains directly liable to the landlord. The landlord’s consent to the sublease should be obtained with the usual condition for consent being that the subtenant can only use the property for the purposes that the landlord has approved in the lease, and sub - ject to the sublease terms mirroring those of the head lease.
1077 CHAMBERS.COM
Powered by FlippingBook