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Licence to Assign Commercial Lease UK (2025)

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Part ofCommercial Property

Written by Brad Askew Solicitor (non-practising)
Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice.
Updated June 2026 · England & Wales
When a business tenant wants to pass their commercial lease over to someone else, they usually cannot just hand over the keys. Most commercial leases contain a clause requiring the landlord's written permission before any transfer takes place, and that permission is typically documented through a Licence to Assign. It is the formal paperwork that records three things at once: the landlord agreeing to the transfer, the outgoing tenant stepping away from the property, and the incoming tenant accepting responsibility for what comes next. Getting this document right matters because a flawed assignment can leave the outgoing tenant stuck with ongoing liabilities, or leave the landlord without the protections they expected. In this guide I walk through how the Licence to Assign works in England and Wales, what it normally contains, and the practical points tenants and landlords tend to trip over.

What this document is

A Licence to Assign is a three-way agreement that gives a commercial tenant permission to transfer their existing lease to a new tenant. The current tenant is known as the assignor, the incoming tenant is the assignee, and the landlord is the party granting consent.

Rather than creating a fresh lease, this document simply allows the original lease to continue in force with a different tenant named on it. The existing lease terms, including rent, repairing obligations, permitted use and remaining term, all stay the same.

What changes is the identity of the person responsible for meeting those obligations. In practice, the Licence to Assign sits alongside a separate deed of assignment, which is the document that actually moves the leasehold interest from one party to the other.

The licence is what makes the assignment lawful under the terms of the original lease, and without it the assignment would usually be a breach of covenant. It is most commonly used when a business is being sold, relocated, downsized, or restructured, and the premises need to move with it, or stay behind without it.

How to use this document

  1. Check the lease for the alienation clause. The starting point is always the original lease itself. Look carefully at the clause dealing with assignment, often called the alienation provisions, because this sets out whether consent is needed, what conditions the landlord can impose, and whether the tenant must offer the lease back to the landlord first.
  2. Submit a formal request to the landlord. The outgoing tenant writes to the landlord asking for consent, usually including details of the proposed assignee, their trading history, accounts, bank or trade references, and how they plan to use the premises. Under the Landlord and Tenant Act 1988, the landlord must then respond within a reasonable time and cannot unreasonably withhold consent.
  3. Negotiate the conditions of consent. Landlords commonly attach conditions, such as requiring an authorised guarantee agreement from the outgoing tenant, a rent deposit from the assignee, or guarantors for the new tenant. These conditions need to be reasonable and consistent with what the lease allows. This stage often involves back and forth between solicitors on all three sides.
  4. Draft and agree the Licence to Assign. Once the principles are settled, solicitors prepare the licence itself. It names the three parties, confirms the landlord's consent, records the conditions that have been agreed, and sets out covenants by the assignee to comply with the lease going forward. The outgoing tenant, incoming tenant and landlord all sign.
  5. Complete the assignment and register where needed. The deed of assignment is then signed, formally transferring the lease. If the lease is registered at HM Land Registry, or has more than seven years left to run, the assignment must be registered so that the new tenant appears as the legal owner of the leasehold interest.

Common questions

If you're dealing with this kind of situation, speak to an experienced legal adviser who can walk you through it — from £149.

Common questions

Q Can a landlord refuse to grant a Licence to Assign?
A landlord can refuse, but under the Landlord and Tenant Act 1988 they cannot unreasonably withhold or delay consent where the lease requires it. What counts as reasonable depends on the circumstances, but typical grounds include concerns about the assignee's financial standing or their intended use of the premises. A landlord who refuses without good reason may be liable for the tenant's losses.
Q What is an authorised guarantee agreement and why does it come up?
An authorised guarantee agreement, often shortened to AGA, is a separate document under which the outgoing tenant guarantees that the incoming tenant will comply with the lease. It is common in leases granted from 1996 onwards, and landlords frequently require one as a condition of consent. The outgoing tenant remains on the hook for the immediate assignee's performance, though not for any later tenants.
Q How long does it take to get a Licence to Assign in place?
Timescales vary, but a straightforward assignment often takes between four and eight weeks from the initial request to completion. Delays tend to come from references, negotiation of conditions, or the landlord's managing agents and solicitors. More complex deals, especially those involving group structures or unusual assignees, can take considerably longer.
Q Who pays the landlord's legal costs?
In most commercial leases, the outgoing tenant is required to cover the landlord's reasonable legal and surveyor fees for dealing with the consent, regardless of whether the assignment actually completes. This is usually set out in the alienation clause. It is sensible to ask for an estimate early, and to agree a cap where possible before work begins.
Q Is a Licence to Assign the same as a deed of assignment?
No, they are two different documents that work together. The Licence to Assign is the landlord's permission for the transfer to happen, with conditions attached. The deed of assignment is the instrument that actually moves the leasehold interest from the outgoing tenant to the incoming tenant. Both are typically completed at the same time.
Q What happens if a tenant assigns without consent?
Assigning without the landlord's consent where it is required is a breach of the lease. The landlord may be able to forfeit the lease, claim damages, or refuse to recognise the new tenant. The purported assignment may still be effective between the outgoing and incoming tenant, but it leaves both of them exposed. It is a situation worth avoiding through proper paperwork.
Q Does the incoming tenant take on rent arrears from the old tenant?
Generally no, rent arrears and other breaches that existed before the assignment remain the responsibility of the outgoing tenant. However, ongoing obligations, such as repairs that have built up over time, effectively pass to the new tenant because the state of the property is what it is. Careful due diligence before completion is important to understand what is being inherited.
If you're dealing with this kind of situation, speak to an experienced legal adviser who can walk you through it — from £149.

Sources

This guide is based on primary UK law and official guidance.

Brad Askew, Solicitor (non-practising)

Written & reviewed by

Brad Askew Solicitor (non-practising)

Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice. LegalDocuments.co.uk is not a law firm and does not provide regulated legal advice.

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Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.