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(APD) Leasehold > Procedures Assignment of a Lease > Flashcards

Procedures Assignment of a Lease Flashcards

1
Q

What are the stages of ASSIGNING a Lease?

(1) PRE-CONTRACT - (a)-(d)
(2) EXCHANGE
(3) PRE-COMPLETION - (a)-(c)
(4) COMPLETION
(5) POST-COMPLETION (a)-(b)

A

(1) PRE-CONTRACT
(a) Apply L’s CONSENT (to Assign)
(b) Deduction / Investigation of Title
(c) Pre-contract searches / Enquiries
(d) Draft CONTRACT

(2) EXCHANGE
(3) PRE-COMPLETION
(a) Pre-completion Searches
(b) Prepare TR1 / DEED OF ASSIGNMENT
(c) Prepare ‘LICENCE TO ASSIGN’

(4) COMPLETION
(5) POST-COMPLETION
(a) REGISTER ASSIGNMENT
(b) SDLT / LTT

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2
Q

What are the stages of ASSIGNING a Lease?

(1) PRE-CONTRACT - (a)-(d)
(2) EXCHANGE
(3) PRE-COMPLETION - (a)-(c)
(4) COMPLETION
(5) POST-COMPLETION (a)-(b)

A

(1) PRE-CONTRACT
(a) Apply L’s CONSENT (to Assign)
(b) Deduction / Investigation of Title
(c) Pre-contract searches / Enquiries
(d) Draft CONTRACT

(2) EXCHANGE
(3) PRE-COMPLETION
(a) Pre-completion Searches
(b) Prepare TR1 / DEED OF ASSIGNMENT
(c) Prepare ‘LICENCE TO ASSIGN’

(4) COMPLETION
(5) POST-COMPLETION
(a) REGISTER ASSIGNMENT
(b) SDLT / LTT

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3
Q

What is the ‘Assignment’ of a Lease?

A

Transfer REMAINING TERM of a Lease from Current Tenant to a New Tenant (assignee)

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4
Q

When ‘Assigning’ a Lease:
(1) What is the General Rule on whether the terms of the lease can be changed?
(2) What is the exception to this?

A

(1) A CANNOT Change Terms
(2) Unless L agrees + enters ‘Deed of Variation’

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5
Q

(1) PRE-CONTRACT

When DEDUCING & INVESTIGATING Title, what 2 titles should be done?

A

(1) Leasehold Title +
(2) Freehold Title

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6
Q

(1) PRE-CONTRACT

When DEDUCING & INVESTIGATING Title, is it best practice this is done on both (1) Leasehold Title and (2) Freehold Title.

How will this be done for:
(1) Leasehold Title
(a) Registered
(b) Unregistered

(2) Freehold Title
(a) Registered
(b) Unregistered

A

(1)
(a) Official Copies (of lease)
(b) Lease

(2)
(a) Official Copies (of freehold)
(b) Epitome / root of Title

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7
Q

(3) PRE-COMPLETION

(1) What is the purpose of a ‘Deed of Assignment’?
(2) What are the 3 Parties to it?
(3) Who is it drafted by?

A

(1) Record L’s consent for ‘Assignment’
(2)
(a) Landlord
(b) Tenant (Assignor)
(c) Assignee

(3) L’s Solicitor

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8
Q

(3) PRE-COMPLETION

What are the 3 likely key provisions of a ‘Deed of Assignment.
(1) Details ….
(2)
(i) New Lease (1 Jan 1996)
(ii) Old Lease (pre 1 Jan 1996)
(3) Covenant to….

A

(1) Details CONSENT
(2)
(i) New lease - AGA (between T and L)
(ii) Old lease - DIRECT COVENANT to observe covenants in lease (from A to L)
(3) Covenant Pay L’s LEGAL & PROFESSIONAL COSTS (A to L)

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9
Q

(3) PRE-COMPLETION

What are the 3 likely key provisions of a ‘Deed of Assignment.
(1) Details ….
(2)
(i) New Lease (1 Jan 1996)
(ii) Old Lease (pre 1 Jan 1996)
(3) Covenant to….

A

(1) Details CONSENT
(2)
(i) New lease - AGA (between T and L)
(ii) Old lease - DIRECT COVENANT to observe covenants in lease (from A to L)
(3) Covenant Pay L’s LEGAL & PROFESSIONAL COSTS (A to L)

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10
Q

(3) PRE-COMPLETION

In a ‘Deed of Assignment’ what is likely to be a condition of CONSENT for the Landlord to grant the ‘Assignment’ in a
(1) New Lease
(2) Old Lease

A

(1) New lease - AGA (between T and L)
(2) Old lease - DIRECT COVENANT to observe covenants in lease (from A to L)

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11
Q

On Assignment of a Lease, how does LIABILITY for BREACH OF COVENANTS shift from Tenant (T) to the Assignee (A) in:
(1) New Lease
(2) Old Lease

A

(1) AUTOMATICALLY passes from T to A on Assignment
(2) Passes from T to A ONLY for Covenants that ‘TOUCH AND CONCERN’ the land

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12
Q

In a Lease who are the following between:
(1) Privity of CONTRACT
(2) Privity of ESTATE

(3) Is there Privity of CONTRACT between a Landlord and an Assignee?

A

(1) ORIGINAL L and ORIGINAL T
(2) CURRENT L and CURRENT T

(3) NO

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13
Q

(1) Who is an AGA between?
(2) Sketch a diagram of an AGA?

A

(1) L & T

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14
Q

What are the 2 main features of an AGA?
(clue LIABILITY & LOSS)
(1) T retains….
(2) L can pursue

A

(1) T retains LIABILITY for any breaches of Covenants by A
(2) L can PURSUE T for any LOSS (caused by A’s breaches)

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15
Q

If an Assignee (A1) assigns the Lease again to a new Tenant (A2):
(1) What will happen to the AGA?
(2) What should the L do as a condition to Consent to the Assignment?

A

(1) Falls Away
(2) Make A1 enter into an AGA with L

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16
Q

Sketch a Diagram showing the Assignment of a NEW Lease?

A
17
Q

Sketch a Diagram showing the Assignment of a OLD Lease?

A
18
Q

(3) PRE-COMPLETION

As part of the ‘Licence to Assign for a NEW LEASE it is common for an AGA (given between T and L).

To protect the original Tenant (T) if the Assignee (A) breaches the lease covenants and the Landlord (L) sues the T:

(1) What should the T get the A to enter into on Assignment?
(2) In what document would this be given?

A

(1) INDEMNITY Covenant
(2) TR1 / Deed of Assignment

19
Q

(3) PRE-COMPLETION

(1) What document is used to Assign the lease?
(2) What are the 2 types of Deeds of Assignment?
(3) Who drafts this?

A

(1) ‘Deed of Assignment’
(2)
(a) Deed of Assignment
(b) TR1
(3) Assignee’s solicitor (A)

20
Q

(3) PRE-COMPLETION

A ‘Deed of Assignment’ is used to Assign the Lease.

What form of ‘Deed of Assignment’ MUST be used for REGISTERED LEASE?

A

TR1

21
Q

(3) PRE-COMPLETION

What Pre-Completion Searches and Against whom should be carried out by A’s solicitor for the ‘Assignment’ of a Lease in:
(1) REGISTERED Lease
(2) UNREGISTERED Lease

A

(1) OS1 (against T’s LEASEHOLD Title)
(2) K15 Land Charges (against T’s NAME)

22
Q

(3) PRE-COMPLETION

If there is a FAILURE to Obtain CONSENT from the L to the ‘Assignment’ by the COMPLETION DATE when can EITHER Party RESCIND the Contract under:
(1) SCs
(2) SCPCs

A

(1) 3 Working Days BEFORE Completion Date
(2) 6 months AFTER Completion Date

23
Q

(4) COMPLETION

On COMPLETION, what 2 things does A PAY to T?

A

(1) Balance PURCHASE PRICE
(2) Rent paid by T AFTER COMPLETION (i.e. as rent paid in advance)

24
Q

(4) COMPLETION

On COMPLETION of the Assignment of a Lease, what are the 3 main documents that T provides to A?

A

(1) Original Lease
(2) TR1 / Deed of Assignment
(3) Licence to Assign (executed by L)

25
Q

(5) POST-COMPLETION

POST-COMPLETION of the Assignment of a Lease. What are the 2 main steps A must take?

A

(1) Pay SDLT / LTT (within 14 days of COMPLETION)
(2) REGISTER Assignment

26
Q

(5) POST-COMPLETION

POST-COMPLETION, one key step is to pay any SDLT due.
(1) When must this be paid?
(2) What is the main area SDLT may be charged on?

A

(1) Within 14 days of COMPLETION
(2) PURCHASE PRICE (NOT Rent - already been paid on grant of lease)

27
Q

(5) POST-COMPLETION

POST-COMPLETION, one key step is to REGISTER the Assignment.

(1) Will a REGISTERED Lease need the ASSIGNMENT REGISTERED?
(2) In what period must this be Registered in?

A

(1) YES (regardless of term remaining)
(2) Within OS1 Priority Period (30 working days)

28
Q

(5) POST-COMPLETION

POST-COMPLETION, one key step is to REGISTER the Assignment.

(1) Will an UNREGISTERED Lease need the ASSIGNMENT REGISTERED?
(2) What will this Trigger?
(2) In what period must this be Registered in?

A

(1) IF Unregistered Lease Term > 7 years REMAINING
(2) First Registration of LEASEHOLD TITLE
(3) Within 2 MONTHS (of Completion)

29
Q

Re Grant of SUBLEASE

What is a ‘SUBLEASE’?

A

Lease granted out a Tenant’s Existing Lease

30
Q

Re Grant of SUBLEASE

The ST’s solicitor should INVESTIGATE what 2 Titles?

A

(1) L’s Freehold Title
(2) T’ Leasehold Title

31
Q

Re Grant of SUBLEASE

(1) What document will ST likely have to enter into for L to grant CONSENT for T’s ‘Sublease’?

(2) What COVENANT will likely need to be given as a condition of Consent?

(3) What will this allow the Head Landlord to do?

A

(1) Licence to Sublet / Underlet

(2) DIRECT COVENANT from ST to OBSERVE covenants in (a) Headlease and (b) Sublease

(3) Take Direct Action against ST for Breach of Covenants

32
Q

Re Grant of SUBLEASE

What is the Rule on how long the TERM of a Sublease can be?

A

SHORTER Term of HEADLEASE

(APD) Leasehold (7 decks)

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