An assignment of a lease is where the tenant / leaseholder (the assignor) transfers or sells its entire interest in the property for the unexpired term of the lease to another party (the assignee).
The assignment of a lease can involve the payment of a premium sum or receiving of a reverse premium payment by or to the assigning party (assignor) depending on the rent passing under the lease, the term to the next rent review, the lease term remaining, leasehold commitments and market conditions.
The transfer of a lease from one party to the other. Once a lease has been assigned, the assignee becomes responsible to the landlord for paying the rent and fulfilling all other obligations of the lease. However, in the event of default, the landlord may be able to revert back to the assignor to pay the rent and fulfil all other lease commitments under an Authorised Guarantee Agreement (AGA) if such a clause is included in the assigned lease (best to assume so until proved not to be the case).
Assignee covenant strength becomes an overriding issue with lease assignments.
We have extensive experience of advising on and dealing with lease assignments.