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Business Lease Assignment UK: Transfer a Lease (2026)

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Part ofUK Property Law Guide

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
If you run a business from leased premises and your circumstances change, you may want to hand the lease over to someone else rather than see out the remaining term. That transfer is called an assignment, and it is one of the most common ways commercial tenants exit a lease early without paying out the balance of the rent. An assignment moves the leasehold interest from the outgoing tenant to an incoming one, but it almost always needs the landlord's agreement and it rarely frees the outgoing tenant of every obligation. This guide walks through how the process works in England and Wales, what the paperwork usually contains, and the practical issues tenants and assignees should think about before signing anything. Written by Brad Askew, Legal Tech Founder at LegalDocuments.co.uk, with a background in civil and commercial law.

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.

Common questions

Q Do I need the landlord's permission to assign my business lease?
In almost all commercial leases, yes. The alienation clause will usually prohibit assignment without the landlord's prior written consent. Where the lease says consent is not to be unreasonably withheld, the landlord cannot refuse on a whim, but they can impose reasonable conditions such as requiring an AGA or satisfactory financial references from the proposed assignee.
Q What is an Authorised Guarantee Agreement (AGA)?
An AGA is a guarantee given by the outgoing tenant to the landlord, promising that the incoming tenant will comply with the lease. It only covers the period during which the assignee holds the lease, and it falls away if the assignee later assigns to someone else. AGAs are common on post-1995 leases and are often a condition of consent to assign.
Q Am I still liable after I assign my lease?
For leases granted on or after 1 January 1996, the outgoing tenant is generally released from the lease covenants on assignment, but usually remains liable under an AGA for the immediate assignee. For older leases, the original tenant may remain liable for the full term under the doctrine of privity of contract. The exact position depends on the lease and the paperwork.
Q What is the difference between assigning and subletting?
Assignment transfers the lease itself to a new tenant, who becomes the landlord's direct tenant. Subletting keeps the original lease in place and creates a new, shorter tenancy underneath it, with the original tenant acting as landlord to the subtenant. Assignment tends to be a cleaner exit, while subletting can be useful if you only want to offload part of the space or time.
Q Can the landlord charge me for giving consent?
The landlord is generally entitled to recover their reasonable legal and surveyor costs of dealing with the application, and these are usually payable by the outgoing tenant whether or not the assignment completes. The lease itself will often spell this out. Costs can add up quickly, so it is sensible to ask for an estimate and a cap early in the process.
Q How long does it take to assign a commercial lease?
Timescales vary widely. A straightforward assignment with a cooperative landlord and a well-prepared assignee can complete in four to eight weeks. More complex deals, or those involving lender consents, guarantor arrangements or disputes over conditions, can take considerably longer. Delays at the landlord's solicitor are a common cause of slippage.
Q What happens if I assign without consent?
Assigning in breach of the alienation clause is a serious breach of lease. The landlord may refuse to recognise the new tenant, sue for damages, or in some cases forfeit the lease. Any AGA or guarantor arrangements may also be affected. If consent is being unreasonably withheld, the better route is to challenge the refusal rather than proceed without permission.

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.