In an asset purchase involving leasehold properties, a property may be assigned in its entirety to the buyer or alternatively a new lease may be granted. Where a leasehold interest is involved (whether already in existence or newly created) particular points arise which are summarised in this note. Existing lease: points to consider Assignment provisions Where the transaction includes the sale of leasehold properties, the alienation provisions of the leases must be carefully checked to ensure that any conditions in relation to assignment are complied with. The other terms of the leases should also be checked to ensure that there are no provisions affected by an assignment, eg a break clause personal to the seller or a surrender back clause. If there are any leases with an absolute prohibition on assignment, the buyer may require a deed of variation (or other certainty) from the landlord, or instead may request that the property is withdrawn from the sale/purchase. Pre-emption rights In some instances, the landlord has a pre-emption right requiring that the property must

Property Disputes analysis: This appeal from the First-tier Tribunal (FTT) to the Upper Tribunal (UT) concerned the scope and operation of the leaseholder protections provided by Schedule 8 of the Building Safety Act 2022 (BSA 2022) and whether a leaseholder was liable to pay a service charge contribution toward the cost of insulation and fire-stopping works. In an appendix to the judgment, Martin Rodger KC, as Deputy Chamber President provided detailed guidance on how the FTT should approach the leaseholder protections in future cases and so is required reading for practitioners in this evolving area. Written by Lauren Godfrey, barrister at Gatehouse Chambers.

The Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993) provides rights for qualifying leaseholders of flats to acquire the freehold comprising their demises, and to obtain a lease extension at a peppercorn ground rent. The rights are exercised by serving notices, respectively under LRHUDA 1993, ss 13 and 42 on the relevant landlord. By LRHUDA 1993, s 9(1), where in connection with a claim to exercise the right to collective enfranchisement where the freehold is owned by the same person and it is not proposed to acquire any interests other than the freehold of the premises or any other

Leaseholder Action, on behalf of leaseholders, is filing a claim against landlords and insurance brokers over secret commissions. The claim seeks to recover commission payments, included within insurance premiums for buildings and terrorism insurance, that were shared between landlords and their insurance brokers without the knowledge of leaseholders. The firm, Velitor Law, funded by Balance Legal Capital, will bring a ‘no win, no fee’ claim on behalf of leaseholders.

This Practice Note considers the key features of leases and licences and the approach taken by the courts in determining whether an agreement or other occupation arrangement is a lease or a licence. As tenants often benefit from significant statutory protections compared to licensees, the difference between a lease and a licence can be extremely important. Disputes and uncertainty often arise where the parties allow the occupation of land or premises without accurately recording their agreement in writing. Best practice is for the parties to enter into a written lease or licence which accurately reflects the nature of the tenant’s or licensee’s occupation and practical guidance on entering into licences, tenancies at will and other short term letting arrangements can be found in Practice Note: How to enter into short-term lettings and licences of commercial premises. In the absence of an agreement as to the terms of occupation there is a risk that a periodic tenancy will arise. Further guidance on identifying a periodic tenancy (including in the context of a tenant taking

Definitions [to be added at the start of the lease] End of Term Environmental Report • an intrusive phase 2 soil and groundwater investigation including appropriate sampling and analysis commissioned by the Tenant to assess whether any New Contamination is present at on or under any part of the Premises. The End of Term Environment Report shall be addressed to both Landlord and Tenant or alternatively the Tenant shall procure that the Landlord is able to rely on its contents Environment • all or any of the following media, namely air (including air within buildings and other natural or man-made structures above or below the ground), water (including surface water and groundwater), land (including soil and sub-surface land) and any living organisms (including man) or systems supported by those media Existing Contamination • the presence of any Hazardous Substances at on or under the Premises on or before the commencement of the Term Expert • an independent environmental consultant appointed in accordance with clause 7 Hazardous Substances • any

1 Definitions Contamination • the presence or accumulation of any Hazardous Substances at, in, on, under or around the Premises Environment • all or any of the following media, namely air (including the air within buildings and the air within other natural or man-made structures above or below ground), land and water (including surface water and groundwater) and any ecological systems or living organisms (including humans) supported by those media [Environmental Information • [list any environmental reports that have been provided to the Tenant (eg desktops, phase

1 Definitions Contamination • the presence or accumulation of any Hazardous Substances at, in, on or under the Premises Aggravated Contamination • any accumulation, increase, discharge, spillage, leaching, disposal, dispersal, emission, changes to substances, escape, release, migration, acceleration or exacerbation of any Existing Contamination which has been caused or knowingly permitted by the Tenant or its agents, contractors or employees Environment • all or any of the following media, namely air (including the air within buildings and the air within other natural or man-made structures above or below ground), land and water (including surface water and groundwater) and any ecological

Title When taking a lease or buying from a heritable creditor in possession, the title deeds should include: • the original or a certified copy of standard security under which the heritable creditor purports to have title • evidence that the power to enforce the standard security has arisen (ie a default has occurred and calling up procedures have been followed), see Practice Note: Standard security in Scotland—enforcing The standard security will be registered against the title to the property, but you should also check that it: • has been registered at Companies House • has been properly executed, see Practice Note: Execution of documents under Scots law and Registers of Scotland—guidance on execution of documents in counterpart • contains provision to allow the heritable creditor to call up and sell or lease Most standard securities will contain an express power

Title Compulsory liquidation The title deeds should include: • a certified true copy of the interlocutor ordering the winding up of the company and appointing the liquidator • certified copies of either: ◦ the resolution passed at the creditors' meeting appointing the liquidator; or ◦ the resolution passed at the contributories’ meeting appointing the liquidator together with a certificate issued by or on behalf of the liquidator that a creditors meeting was duly held and either confirmed the contributories’ appointment or did not pass a resolution nominating a liquidator, or ◦ the court’s order appointing the liquidator under either: ‣ section 139(4) of the Insolvency Act 1986 (IA 1986), (overruling the creditors’ appointment, which otherwise takes precedence over any appointment contained in the winding up resolution—see IA 1986, s 139(3)), or ‣ IA 1986, s 140 (for any winding-up following administration or voluntary arrangement) Creditors’ voluntary liquidation The title deeds should include: • a certified copy of the winding up resolution passed at the company’s general meeting and either:

Title Compulsory liquidation The title deeds should include: • an office copy of the winding up order and unless the liquidator is the official receiver (as appointed by the court under the winding up order), should also include certified copies of either: • the resolution passed at the creditors' meeting appointing the liquidator, or • the resolution passed at the contributories’ meeting appointing the liquidator together with a certificate issued by or on behalf of the liquidator that a creditors’ meeting was duly held and either confirmed the contributories’ appointment or did not pass a resolution nominating a liquidator, or • the court’s order appointing the liquidator under either: ◦ IA 1986, s 139(4) (overruling the creditors’ appointment, which otherwise takes precedence over any appointment contained in the winding up resolution — see section IA 1986, s 139(3)), or ◦ IA 1986, s 140 (for any winding-up following administration or voluntary arrangement), or • the liquidator’s appointment by the Secretary of State on the application of the official receiver Creditors’ voluntary liquidation The title deeds should include:

Title When taking a lease or a disposition from a receiver or an administrative receiver, the title deeds should include: • the original or a certified copy of the floating charge under which the receiver has been appointed • a certificate from the chargee (or their solicitor) that the power of appointment under the floating charge has arisen • the original or a certified copy of the instrument of appointment of the receiver either under IA 1986, s 53 (by holder of a floating charge) or under IA 1986, s 54 (by the court), and • (in the case of any appointment under IA 1986, s 53) a certified copy of the receiver’s notice of acceptance of the appointment (the original will be held by the chargee) It is also necessary to check that the floating charge: • has been registered at Companies House • has been validly executed (see Practice Note: Execution of documents under Scots law) • contains provision to allow the receiver to be appointed