Underlease taking effect as assignment
Underlease taking effect as assignment

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

  • Underlease taking effect as assignment
  • What if the underlease is not in writing?
  • Landlord and Tenant Act 1954
  • Land Registration
  • Landlord and Tenant (Covenants) Act 1995
  • Can the landlord undo an unintended assignment by its tenant?

An underlease that is granted for as long, or longer, than the original lease operates as an assignment and not as an underlease. Consequently, an underlease must be for at least one day less than the original lease. If an underlease takes effect as an assignment:

  1. the tenant divests himself of the entirety of his interest in the premises (whether the disposition takes effect as a transfer of the legal estate or, due to the absence of a deed, in equity only)

  2. as the tenant has divested himself of his entire interest, the only person to whom possession can be delivered up is the head landlord

  3. as the tenant no longer has a reversion in the premises, no landlord and tenant relationship exists between that tenant and the subtenant