2.3 Leases - Assignment Flashcards
How is registered title deduced?
Assignor to provide Assignee
- Register official copies
- Title plan
- Lease (official copy)
Absolute leasehold title
- Guaranteed by HMLR
- Buyer NOT required to investigate title to freehold/superior leases
Good leasehold title
- NOT guaranteed by HMLR
- Buyer required to investigate superior titles
How is unregistered title deduced?
Assignor to provide Assignee;
- Epitome/Abstract of Title
Epitome/Abstract of Title
- Good root of title (assignment of lease > 15yo)
- Post-root docs (mortgages, subsequent assignment)
- Identifies lease as first pre-root doc
If superior title NOT sent to HMLR;
- HMLR will grant good leasehold title
- Buyer to investigate superior titles > HMLR can then register as absolute leasehold title
What should Seller include in their contract bundle for Buyer as part of pre-contract searches and enquiries?
Residential lease
1) Property Info Form > Replies (TA6)
2) Fittings and Contents Form > Replies (TA10)
3) Leasehold Info Form > Replies (TA7)
4) Enquiries made re Landlord/Managing Agent > Replies (LPE1/LPE2) (Landlord/Management Co can use)
- Service charge/management accounts (last 3 years)
- Landlord’s building insurance policy
- Ground rent receipt
- Info re deed of covenant/consent
Commercial lease
1) Draft sale contract
2) Leasehold title (Registered - Register official copies, Title plan; Unregistered - CLCS search vs Landlord and all owners from and including root onwards, Index map search, Epitome of title and referred docs)
3) Lease w coloured plans
4) Change (if any) of Registered Owner’s name and explanation
5) Relevant CPSEs > Replies
6) Freehold and intermediate titles
7) L’s consent
8) Planning permissions, buildings regulations consent, guarantees
9) Energy Performance Certificate
What is the rule for Landlord’s consent to assign?
Tenant
- Applies for consent (own expense) (all reasonable efforts)
TP
- Provide all info + references reasonably required
Landlord
- Provide consent (within 3 working days of completion)
NO consent given
- Either party may rescind contract > Non-fault basis > Serve notice on other party
Consent unreasonably withheld/NOT decided within reasonable time
- Continue assignment (NOT breach of covenant)
- Seek declaration of acting unreasonably + damages (tort - breach of statutory duty)
- Burden of proof => Landlord
When may optional clauses be included in a deed of assignment?
Assignee pays premium to Assignor
- Assignor pays reverse premium to Assignee
Assignee gives express indemnity covenant
- Rent
- Title docs
- Lease obligations
Lease is held over
Assignor commenced renewal proceedings
Party pays/contributes to legal costs
When are assignments registrable?
Term =< 7 years
- Registered land > Takes effect as overriding interest
- Unregistered land > Binding at large
Term > 7 years
- Registered land > Register within priority protection period (30 working days) > Change register (Form AP1)
- Unregistered land > Register at HMLR (Form FR1) (within 2 months of completion, otherwise void) > Bind world at large
What is required for applying to register assignments?
Registered land > Form AP1 (T’s solicitors)
- Completed transfer certified copy (TR1)
- Discharge evidence (if L’s title is mortgaged)
- New charge copy (if mortgage used to aid purchase)
- L’s licence to assign (if consent required)
- SDLT5 certificate
- Form D1 (overriding interests affecting property)
- Certified copies > Other docs needed to prove title and/or ownership
Unregistered land > Form FR1 => HMLR
- Form DL (deeds, docs of title > epitome of title (unbroken chain of ownership from Assignee to Current Buyer))
- Assignee’s pre-completion searches vs Assignor
- Assignee’s mortgage on assignment + Vacating receipt duly endorsed
- New charge copy (if T has mortgage)
- L’s licence to assign (if consent required)
- SDLT5 certificate
- Form D1 (overriding interests affecting property)
- Certified copies > Other docs needed to prove title and/or ownership
What is required after the assignment is registered?
Check title info of doc
Give notice to Landlord of dealing
Deal w deeds + docs
What is an authorised guarantee agreement (AGA)?
Landlord can require T to enter AGA
- Guarantee Assignee’s performance
- If Assignee breaches covenants => Landlord can sue T/Assignee (UNLESS term ends/subsequent assignment)
- Prevents T’s exemption from liability
a) Residential lease
- Reasonable to do so
b) Commercial lease
Absolute covenant vs assignment (L’s consent required)
- L can require T to enter AGA
Qualified covenant vs assignment (NO L’s consent required)
- Express provision (pre-condition to L’s consent) => L can require T to enter AGA
- NO express provision => Reasonable to do so
