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Simon Newman

Assigning a Lease

What does it mean to assign a lease? 

Assignment is the term used to describe the process where a tenant under a lease transfers the lease to someone else (called the “assignee”). When the assignment has taken place, the original tenant ceases to be a tenant under the lease and the assignee becomes the tenant. If you think of the lease as being something that is owned by a tenant, then the lease is effectively sold to a new tenant.

The new tenant then takes over all the rights, obligations and liabilities under the lease and is accountable to the landlord.

Can all leases be assigned?

The question of whether a lease can be assigned and on what conditions will be contained within the lease. In other words, the lease itself will say whether the lease is assignable and if it is, then what conditions must be met as part of the process. Some leases prohibit assignment altogether, others allow an assignment but only on strict conditions.

In most cases, one of the conditions is that the landlord has to give legally binding written consent to an assignment. Usually, the landlord will also want to have vetted the new tenant/assignee in advance and approve them as a condition of the assignment.

Simon Newman

Case Study : Public Inquiry on Change of Entity

We recently represented two companies who were both called to the same public inquiry. Although separate entities, the companies were closely connected because of having the same set of directors. One of the companies (the Operator) had years previously been issued with a restricted goods vehicle operator’s licence. The other company had recently applied for the same kind of licence (the Applicant).

Over the previous year, the directors had decided to progressively move most of the Operator’s business interests to its sister company the Applicant. Without understanding the potential consequences, and before being granted its operator’s licence, the Applicant began using the Operator’s heavy goods vehicle. The Operator company had not informed the Traffic Commissioner (TC) of its change in business arrangements and of the apparent change of entity (though the companies were actually wholly owned subsidiaries of another company – see below).

The Public Inquiry was convened because of changes at this business group and a fundamental misunderstanding of the operator’s licence regime, and that there had been what appeared to be a change of entity involving the companies.

The TC needed to be satisfied as to whether the companies were not unfit to hold an operator’s licence due to relevant activities and convictions, and about the events relating to a change in the circumstances of the licence holder. The Operator risked revocation of its licence. The Applicant was at risk of not having its licence granted.

In advance of the inquiry, and to start building their case, we obtained as much information as we could about the businesses and provided each company comprehensive legal advice. We examined the companies’ compliance systems and made recommendations about immediate and longer-term changes that needed to be implemented. On our recommendations, the companies invested time and resources into their maintenance and other systems

As a result of our preliminary work and advice, the companies were fully prepared for the public inquiry hearing. In particular, to answer questions and provide evidence about the apparent change of entity.

At the hearing we demonstrated that the companies were running professional and competent businesses. With specific reference to the issue of the apparent change of entity, the TC accepted that Section 3(4) of the Goods vehicle (licencing of operators) Act 1995 was relevant and that this was not a typical “change of entity” case – because of the companies being subsidiaries. We were able to persuade the TC that the issues that lead to the inquiry arose out of ignorance rather than an attempt to mislead or gain financial advantage

The TC granted the new licence to the Applicant with the Operator company voluntarily surrendering its licence. The directors were delighted with the outcome of the public inquiry hearing and that they managed to avoid the damaging consequences they feared.
Simon Newman

Case Study : New PSV Application in the South East

We were approached by a small business owner to represent them at the a public inquiry which had been called to consider their application for a new passenger vehicle operator’s licence.

The person applying for the licence had a long background of work in the transport industry as a driver but had never before operated his own transport business. One of the key issues was that the nominated transport manager was also nominated some other licences and the Traffic Commissioner was concerned whether this meant that the transport manager would be able to properly carry out their duties on so many licences at once. 

Simon Newman

Introduction to the Construction, Design and Management Regulations

The current design and management regulations are set out in the Constructions (Design and Management) Regulations 2015 (“CDM 2015”). These regulations have an impact on pretty much everyone involved in construction, development and redevelopment work in Great Britain. Even small and domestic projects are covered. The regulations place various duties and obligations on different parties within the construction project. An outline of the main features are as follows:
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Simon Newman

What the difference between a share sale and an asset sale ?

There are two basic structures for transferring a business.  An asset sale is where the buyer purchases a collection of assets and legal rights (and sometimes liabilities) relating to the business.  An example of this might be a grocery shop business where the buyer purchases the business premises, fixtures, fittings and equipment used by the business, stock and takes on the employees.  Most transfers of small businesses are asset sales. 
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Latest Blogs

Assigning a Lease
August 18, 2019
What does it mean to assign a lease? Assignment is the term used to describe the process where a tenant under a lease transfers the lease to someone else (called the “assignee”). When the assignm...
The current design and management regulations are set out in the Constructions (Design and Management) Regulations 2015 (“CDM 2015”). These regulations have an impact on pretty much everyone involved ...
There are two basic structures for transferring a business.  An asset sale is where the buyer purchases a collection of assets and legal rights (and sometimes liabilities) relating to the busines...

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