Assignment of part of the demised premises
Assignment of part of the demised premises

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Assignment of part of the demised premises
  • Introduction
  • Inadvertent assignment
  • Effect of assignment of part in law
  • Distress, CRAR and forfeiture
  • Apportionment of rent—‘old’ tenancies
  • ‘New’ tenancies
  • Rent and other tenant covenants
  • Forfeiture
  • Landlord’s consent
  • more

Introduction

Most leases contain an absolute prohibition against assignment of part of the demised premises. This is due to the potential complications in relation to:

  1. apportioning the rent, other payments and covenant obligations as between the divided parts

  2. fracturing the covenant strength of the tenants

  3. physically subdividing the premises

  4. a consequential adverse effect on rental values and/or the value of the landlord’s reversion

However, assignment of part is sometimes permitted under leases which were granted for a substantial term on payment of a significant premium or on a rent sharing basis, often with development obligations imposed on the tenant (this applies to both commercial and residential developments). Where the term is very long (potentially as much as 999 years), assignment may not even require landlord’s consent provided that the assignment meets pre-determined criteria and/or is notified to the landlord within a specified timescale after the assignment has occurred.

If the lease is silent on the point, an assignment of part will be permitted.

Inadvertent assignment

As an aspect of the rule that an underletting for a term which is certain to last as long as, or longer than, the tenant's own interest operates as an assignment (see Practice Note: Underlease taking effect as assignment), it is possible for an assignment of part to arise inadvertently if the tenant underlets part of the