The following Property guidance note provides comprehensive and up to date legal information covering:
The more important a particular tenant is to the viability of a particular development, the more likely that the landlord will insist the tenant should not be able to assign its interest under the agreement for lease. Key decisions by the lender who is funding the development costs and the investor who is buying the completed development (and also, if the developer doesn’t own the development site, by the seller who is committing its land to the development), will have been based to a material degree on the covenant strength and profile of those tenant(s) with whom the developer has secured a pre-let agreement. Any dilution of that covenant and profile will significantly prejudice the developer.
The developer therefore expects the same tenant to sign the agreement for lease and to take the lease when it is granted. Consequently, the agreement for lease is often personal to the tenant. The developer will also prohibit underletting, charging, parting with or otherwise dealing with the tenant's interest under the agreement for lease, although a right to charge (with the developer’s consent) will often be conceded if the tenant needs to secure funding for its fit-out works.
However, tax considerations or an intra-group reorganisation may dictate that the tenant is afforded the flexibility of having the lease taken by another
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234