Business Lease Assignment UK: Transfer a Lease (2026)

What this document is

An assignment of a business lease is the legal transfer of an existing commercial lease from the current tenant (the assignor) to a new tenant (the assignee). Unlike a subletting arrangement, where the original tenant stays on the hook and creates a separate tenancy underneath, an assignment puts the new tenant directly into the shoes of the old one.

The assignee takes over the rent, the repair obligations, the use restrictions and anything else the lease imposes. Most commercial leases contain a clause that restricts assignment. Typically the tenant can only assign with the landlord's prior written consent, which under section 19(1A) of the Landlord and Tenant Act 1927 can be made subject to conditions the landlord has set out in advance.

The consent itself is recorded in a separate document called a licence to assign, which is signed by the landlord, the outgoing tenant and the incoming tenant. For leases granted after 1 January 1996, the landlord will often also require the outgoing tenant to sign an Authorised Guarantee Agreement (AGA), guaranteeing the assignee's performance for the duration of their ownership of the lease.

How to use this document

1. Read your lease before you do anything else. The alienation clause in your lease sets out whether assignment is permitted, what conditions apply, and whether the landlord can insist on an AGA, a rent deposit from the assignee or references. Knowing what the lease allows before you approach a buyer or the landlord will save weeks of back-and-forth and help you price the deal realistically. 2. Find a suitable assignee and agree commercial terms. The incoming tenant needs to be financially credible enough to satisfy the landlord, so expect requests for accounts, bank references and trade references. You will also need to agree any premium or reverse premium between you, whether fixtures and fittings are included, and the intended completion date. These commercial points usually sit in heads of terms before lawyers get involved. 3. Apply to the landlord for consent to assign. The outgoing tenant formally asks the landlord for permission, providing information about the proposed assignee. Under the Landlord and Tenant Act 1988, the landlord must respond within a reasonable time and cannot unreasonably withhold consent where the lease says consent is not to be unreasonably withheld. The tenant typically pays the landlord's reasonable legal and surveyor costs. 4. Negotiate and complete the licence to assign. Solicitors will prepare the licence to assign, which records the landlord's consent and any conditions, such as an AGA from the outgoing tenant, a guarantor for the assignee or a rent deposit. All three parties sign it. Any required apportionments of rent, insurance and service charge are calculated up to the assignment date. 5. Complete the assignment and register the change. The assignment itself is effected by a deed, often called a transfer or assignment of lease. If the lease is registered at HM Land Registry (or has more than seven years left to run), the assignee must register their interest. The landlord should be formally notified, and utility accounts, business rates and insurance will need updating in the assignee's name.