This is why the alienation clause in a lease is very important. A written tenancy at will for one of the properties provides for the tenant to pay a monthly rent and is capable of termination at any time. At the same time, the landlord should be aware that if the alienation provisions are too restrictive, they could be regarded as onerous on rent review and depress the rent achievable. Service Charges and the Building Safety Bill – what is in the Legislative Pipeline? It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter. Herrington Carmichael LLP is authorised and regulated by the Solicitors Regulation Authority. Provision for ‘alienation’ is generally included in all but the shortest lettings and governs the tenant’s ability to: Assign the lease, i.e., to sell or transfer it to a different tenant; Underlet (or sublet) the premises or a part of them; or; Share occupation of the premises. A restraint on alienation is a restriction on one’s right to convey a real property interest. The tenant of the property has been in occupation under a business tenancy protected under the Landlord and Tenant Act 1954 (LTA 1954). © 2020 Herrington Carmichael LLP. Most commercial leases contain provisions dealing with the tenant’s ability to assign, sublet, charge, part with possession or otherwise deal with the tenant’s interest in the property. The exact terms of the AC depend on the lease. Depending on the type of business it may be an important feature of a business that they are allowed to sublease part of the premises to others. This content is no longer in use on Lexis, Alienation—a tenant’s practical lease negotiation guide, Corporate and structured property transactions. In this scenario, has the tenant lost their right to security of tenure? Assignation. The landlord is bound such that their consent should not be unreasonably withheld. 60 St Martins Lane, Covent Garden, London, WC2N 4JS, Building 2 Watchmoor Park, Riverside Way, Camberley, Surrey. Pre-emption. Should the landlord serve section 25 notices on both the tenant and subtenant and how should the landlord protect its position? For example, it could prohibit lease alienation, or could require lessor permission before alienating the lease. The contract provides that Y will give vacant possession. A lease will typically prohibit sharing of the property except where expressly permitted. A company (X) takes an assignment of a commercial lease from the outgoing tenant (Y). Imagine being able to quickly find up-to-date guidance on points of law and then easily pull up sources to support your advice. Building leases—alienation. A developer and a landowner can enter into an Option Agreement. This is a critical issue regularly considered by the courts. However, the landlord has made a large demand for service charge contributions towards the cost of a new lift at the premises. alienation clause: A type of acceleration clause requiring full payment of the balance of a mortgage upon the transfer of title of the mortgaged property. Alienation clause. A commercial property has been ‘let’ under an oral agreement to a company tenant which has subsequently been dissolved. A commercial tenant has breached various covenants in its lease and a section 146 notice has been served. What Is an Alienation Clause? The landlord does not want either the tenant or subtenant to be able to claim a new lease. When negotiating a lease this is a provision that the tenant should carefully consider. It identifies key tenant concerns, suggests possible tenant amendments and considers how the alienation clauses interact with other lease provisions. 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