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Licences To Assign Or Sublet Commercial Premises

If you are a landlord or tenant of commercial premises, the chances are that at some point you will wish to make or will receive an application for licence to assign or sublet those premises.

Whilst each lease will have specific provisions relating to what is required, here are some useful pointers:

Tenant applying for licence

  • Check the terms of the lease for any specific terms about how to apply for consent;
  • Provide the Landlord with all necessary supporting information, in one pack if possible;
  • If the matter is urgent, explain the reasons to the landlord and give details of any timescales;
  • Provide details of the assignee/subtenant, their business; bank/accountant’s references if possible; last 3 years’ accounts if possible; any other information required by the lease;
  • The landlord will require an undertaking for their legal and professional costs to be paid – find out the details as soon as possible to avoid delays, as usually the application will not be fully considered until the undertaking is given.

Landlord receiving an application

  • Check the lease for any specific terms about how to apply for consent;
  • Consider the strength of the assignee/subtenant and ask for financial information such as accounts and references (see above);
  • If appropriate and the lease allows, consider asking for a guarantor or rent deposit;
  • Acknowledge the application as soon as possible, asking for any missing information;
  • If you have a landlord yourself then check the headlease requirements and let the tenant know that this is required and see notes above regarding tenant’s application;
  • Give your decision in writing. It is likely that the lease will provide for a formal licence – if so, pass the matter to your solicitors as soon as possible with all relevant information;
  • The key point is to act “reasonably”. All responses should be prompt and considered.

If the process breaks down

Consider arbitration or mediation as an alternative to litigation.

Useful information

A useful “alienation protocol” can be found on the Property Protocols website – http://www.propertyprotocols.co.uk/the-alienation-protocol

If you need any further advice contact our Specialist Team