Leasehold property issues arising on an asset purchase


Published by a ÀÏ˾»úÎçÒ¹¸£Àû Property expert
Practice notes

Leasehold property issues arising on an asset purchase


Published by a ÀÏ˾»úÎçÒ¹¸£Àû Property expert

Practice notes
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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 the conditions 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 request to withdraw the property from the purchase.

Pre-emption Rights

In some instances, the landlord has a Pre-emption right requiring the property to first be offered back to the landlord. Where the

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Jurisdiction(s):
United Kingdom
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Key definition:
Alienation definition
What does Alienation mean?

Assigning, underletting, parting with or sharing possession or occupation of premises. Typically a lease will contain restrictions on a tenant’s ability to do so, without the landlord’s prior written consent.

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