Taking on a Commercial Lease: Assignments for Incoming Tenants

Taking Over a Commercial Lease? Here’s What You Need to Know

If you are about to take over an existing commercial lease from another business, you’re entering into a lease assignment as the incoming tenant, or assignee. This can be a quick and cost-effective way to secure premises, but it also comes with significant legal and commercial risks.

At Jonathan Lea Network, we provide practical, expert advice to help you fully understand the obligations you’re taking on, ensure the landlord’s requirements are met, and complete the transaction smoothly and efficiently.

Why Take on an Existing Lease?

Businesses choose to take an assignment of an existing lease for a number of strategic reasons:

• Faster access to premises: You avoid the time-consuming process of negotiating a new lease from scratch, which is especially helpful if you need to occupy quickly.
• Favourable lease terms: You may benefit from a lower passing rent, pre-negotiated lease terms, or incentives agreed with the original tenant.
• Established fit-out: Some leases are assigned with the benefit of an existing fit-out, saving you upfront investment.
• Location availability: In sought-after areas, lease assignments may be the only practical way to secure space.

However, these benefits can mask potential risks. That’s where our legal team adds real value.

Legal Process and Key Steps

The lease assignment process for incoming tenants typically involves:

1. Lease review: We carefully examine the lease terms to highlight any ongoing obligations, restrictions, or unusual clauses you’ll inherit.
2. Due diligence: We assess the property condition, compliance history, rent review terms, and service charge liabilities.
3. Landlord consent: You must usually obtain the landlord’s formal written consent to the assignment, often via a “licence to assign”.
4. Financial checks: The landlord will often assess your covenant strength and may require a rent deposit or personal guarantee.
5. Negotiation of documents: This includes the licence to assign, deed of assignment, and any side agreements.
6. Completion and (if needed) registration: If the lease is registrable, we ensure the transaction is correctly registered with HM Land Registry.

Each of these steps is time-sensitive and interconnected. We manage them all efficiently and communicate clearly throughout.

Common Concerns from Incoming Tenants

Clients coming to us as prospective assignees often want answers to the following:

• What am I legally responsible for? You step into the lease as if you were the original tenant. That means you accept the repairing obligations, rent levels, service charges, and any arrears (unless otherwise agreed).
• Can the landlord refuse me as a tenant? They can only refuse consent on reasonable grounds, typically financial. But they can require conditions, such as a guarantor or rent deposit.
• How do I protect myself from undisclosed liabilities? Through careful due diligence, we identify any arrears, disrepair, or breach of covenant that could become your problem.
• What if the lease is poorly drafted or outdated? We’ll help you spot the red flags, and if needed, negotiate a deed of variation or walk away before costs escalate.

Our role is to give you a clear picture of risk and options.

Our Legal Services for Incoming Tenants

We provide tailored, fixed-fee advice covering:

• Lease due diligence: Clear summary of lease obligations, unusual clauses, renewal rights, rent review mechanics, and forfeiture triggers.
• Landlord consent: We prepare the licence to assign and liaise with the landlord’s solicitors to get you approved.
• Negotiation support: If the landlord asks for a rent deposit deed or guarantee, we’ll ensure the terms are reasonable and time-limited.
• Assignment documentation: We review or draft the deed of assignment to ensure clear and enforceable terms.
• Registration support: Where applicable, we register your interest at the Land Registry and deal with SDLT filings.
• Coordination with seller and agents: We work closely with the outgoing tenant and their agents to keep the process moving.

Our solicitors are experienced, approachable, and commercially aware.

Benefits of Working with Jonathan Lea Network

When you’re taking over someone else’s lease, you need more than a box-ticking legal service. You need a proactive legal partner who will:

• Highlight hidden risks early before you’re contractually committed
• Push back on unreasonable landlord demands and negotiate better terms where possible
• Protect your financial exposure with clear documentation and limited liability mechanisms
• Keep the transaction on track, avoiding costly delays
• Ensure value for money, with fixed-fee clarity from day one
• We’ve helped hundreds of SMEs across the UK take on commercial leases with confidence.