Licence = doc which LL grants formal consent to T to change use / assign / underlet / alter
premises
o Contain formal consent + covenants given by T/Assignee (A)/Undertenant (UT) to LL
Important LL refrains from confirming they have agreed to disposal or alteration ‘in principle’
o Could be construed as a grant of LL’s full written consent before a formal licence has
been entered into (Aubergine Enterprises v Lakewood International[2002])
Usually take the form of a deed entered into by LL and T + A / UT/ any guarantors
Draft licence prepared by LL’s solicitors (LLS) to be approved/amended by other party’s
solicitors
o Supplemental to lease so LLS must check lease AND supplemental docs e.g. deeds
of variation or assignment before drafting licence
Ensures licence made between correct parties + no variations to lease from
original grant affect the licence being given
Where UT wishes to assign lease, further underlet or make alterations to premises it will
require consent from both LL (the T under headlease) and any head LL
s.2 LTA 1988 – imposes duty on any party receiving written app for consent to deal with the
leasehold property (i.e. assign, underlet, charge etc.) to pass the app to any relevant 3 rd
party whose consent is required to do so
o + must do so in reasonable time
T + LL need to ensure any LL Mortgagee’s consent also obtained
, LICENCE TO ASSIGN
Assignment = T transfers lease to the assignee – permission usually granted by LL in the
Licence to Assign (L2A) which will contain:
COVENANTS BY THE ASSIGNEE
old lease – L2A will contain direct covenant by A with LL to observe and perform the
covenants in the lease
o Creates privity of contract between the parties
o E.g. The Assignee shall pay the rents and observe and perform the tenant
covenants of the Lease from completion of the assignment for the residue of the
term of the Lease.
new lease – direct covenant not required because already implied by statute – s.3(1)(b)
Landlord and Tenant (Covenants) Act 1995 (LT(C)A 1995)
o HOWEVER – LLS will in practice try to obtain direct covenant
s.5(2) LT(C)A – A of new lease benefits from T of new lease to be released automatically
from tenant covenants upon assignment
o AS should qualify phrase ‘for the residue of the term’ (above) and insert ‘throughout
the Term (until released by virtue of the LT(C)A 1995)’
Condition of consent may be provision of an authorised guarantee agreement (AGA) under
which the outgoing T will guarantee A’s performance of tenant covenants whilst lease
remains vested in A (s.16 LT(C)A)B
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