Commercial lease assignment and subletting advice
Whether your business circumstances have changed or you simply have surplus space you are not using, assigning your lease or subletting part of your premises can be a practical and financially sound solution. However, both processes come with legal obligations, landlord requirements, and potential pitfalls that require careful handling.
Our RICS-qualified lease advisory specialists act on behalf of both landlords and tenants to negotiate favourable outcomes, protect your interests, and ensure every step of the process is compliant with your lease terms and the relevant legislation.
To discuss your situation, please complete our get in touch form. A member of our team will be happy to assist.
What is the difference between lease assignment and subletting?
Although both allow a tenant to pass on their lease obligations to another party, lease assignment and subletting are distinct arrangements, each with their own implications.
Lease assignment
A lease assignment transfers your entire interest in a commercial lease to a new tenant, known as the assignee. Once completed, the assignee takes over your rights and responsibilities under the lease agreement. This is often pursued when a business is relocating, downsizing, or ceasing to trade from a particular premises.
Subletting
Subletting, sometimes referred to as sublease or underlet, involves a tenant letting all or part of their leased premises to a third party, the subtenant, while retaining their own interest in the lease. The original tenant remains liable to the landlord under the terms of the head lease and is responsible for the subtenant meeting their obligations.
Understanding which arrangement is most appropriate for your situation is the first step, and our advisers can help you make that assessment with confidence.
When might you need to assign or sublet a commercial lease?
There are a number of circumstances in which assigning or subletting a commercial lease becomes a sensible course of action. Common scenarios include:
- Your business is relocating to new premises, and you want to exit your existing lease early
- You have more space than you currently need
- Your business has ceased trading and you want to reduce ongoing lease costs
- You want to generate rental income from unused areas of your building
- You are restructuring and need to review your property liabilities
Whatever your reason, our lease advisory team will help you identify the most appropriate route forward and manage the process efficiently on your behalf.
Landlord consent for lease assignment and subletting
In most commercial leases, you will require your landlord's consent before you can assign the lease or sublet the premises. This is commonly referred to as a licence to assign or a licence to underlet.
Landlords have the right to assess the suitability of a proposed assignee or subtenant and to impose reasonable conditions before granting consent. They cannot, however, unreasonably withhold or delay their consent, as this may give rise to a claim under the Landlord and Tenant Act 1988.
Our team can advise you on the process of applying for consent, help you compile the information your landlord is likely to require, and represent your interests during negotiations if any objections arise.
How does the lease assignment process work?
Every assignment is different, but the typical process follows a series of structured steps:
- Review your lease – Examine the terms of your existing lease to understand your assignment rights, any conditions and the process for obtaining landlord consent
- Identify a suitable assignee – Find a party with the financial standing and intentions that satisfy both your requirements and your landlord's criteria
- Apply for landlord consent – Submit a formal application and provide relevant supporting information about the proposed assignee
- Negotiate any conditions – Work through any reasonable conditions the landlord wishes to impose before granting consent
- Instruct solicitors – Your legal team will prepare the licence to assign and deed of assignment documents
- Complete the assignment – Once all parties are in agreement, execute the documents and formally transfer the lease
“Lease assignments and sublettings are often time-sensitive transactions, particularly when a business is undergoing significant change. Getting the right advice early ensures you are protected and that the process moves forward without unnecessary delays.”
How does the subletting process work?
Subletting a commercial property requires a similarly structured approach:
- Check your lease – Confirm whether subletting is permitted and under what conditions, including any restrictions on the type of use or the rent you can charge
- Establish the sublease terms – Decide which part of the premises you wish to sublet and for how long
- Find a subtenant – Identify a subtenant whose proposed use aligns with your lease and your landlord's expectations
- Apply for landlord consent – Obtain a licence to underlet from your landlord before proceeding
- Agree the sublease – Instruct solicitors to prepare the sublease agreement, which must be consistent with the terms of the head lease
- Complete the sublease – Execute all documents and hand over the agreed portion of the premises to your subtenant
Acting for landlords on lease assignment and subletting
If you are a landlord who has received a request from a tenant to assign their lease or sublet their premises, it is important to respond promptly and to handle the matter in accordance with your obligations under the Landlord and Tenant Act 1988.
Our team can help you assess the suitability of a proposed assignee or subtenant, advise on any conditions you may reasonably wish to impose, and draft the appropriate consent documentation.
We will ensure your interests are protected throughout while helping you avoid unnecessary disputes.
Why should I choose BTG Eddisons for lease assignment and subletting advice?
With over 180 years of experience in the UK property market, BTG Eddisons has built a strong reputation for delivering clear, practical lease advisory support. Here is why businesses across the UK trust us with their lease obligations:
- We are a RICS-certified firm with qualified lease advisory professionals
- We act for both landlords and tenants, giving us a thorough understanding of both perspectives
- We operate from 35 offices across the UK, with strong local and regional market knowledge
- We have more than 550 property professionals ready to support you
- Our advice is clear, straightforward and tailored to your specific circumstances
Speak to our lease advisory team
If you are considering assigning your commercial lease or subletting part of your premises, our specialists are ready to help. We will assess your position, explain your options, and guide you through the process from start to finish.
Complete the form below to arrange your free, no-obligation consultation. You can also explore our wider lease advisory services to see how else we can support you.
Frequently asked questions about lease assignment and subletting
Can a landlord refuse consent for a lease assignment?
A landlord can refuse consent if they have reasonable grounds for doing so, such as concerns about the financial standing of the proposed assignee. They cannot, however, withhold consent unreasonably or delay their response without good cause.
Our advisers can help you understand your rights and challenge an unreasonable refusal if necessary.
