Assignment / subletting
A lease normally provides that a tenant can assign (transfer) the contract to another party or sublet the premises to another occupier.
The subletting provisions may require the occupier to deal with the premises as a whole as opposed to part. The assignment provision will restrict dealing with the premises to the whole only.
On assigning a lease, due consideration must be given to the financial status of the assignee, as the landlord may reasonably withhold consent for an assignment to a new occupier of inferior status to that of the existing occupier.
Older leases often require that the rent agreed on a subletting shall be the higher of the actual rent passing under the head-lease or the open market rent.
More modern leases usually only require that the rent set by the subletting should be at market level.
There is often a conflict between an investor wanting to protect its investment value and an occupier wanting to mitigate its property- holding costs.
