If you need to exit your current assignment of business leasehold before the agreed date, you may be able to find a willing assignee to take over your lease. However, you will need to make sure that your landlord agrees to this arrangement before you make any plans. However, it is common to assume that your liabilities relating to the lease will cease once the assignee takes over. This is not strictly true in most cases. Therefore, it is likely that you will want to minimise the risk of being pursued by your former landlord for any breaches of the lease made by the assignee.
Depending on the age of your lease, your former landlord may be able to pursue you for any breaches made by your immediate or subsequent successors for the duration of your lease. If your lease was made pre-1996 then your landlord can look to you to be liable for breaches by the current tenant. If the lease was made post-1996, your landlord will be more restricted in who they can pursue. This means that they will require you to provide an authorised guarantee agreement when you assign the lease. This agreement will mean that your landlord can only pursue you for breaches made by your immediate successor, and not for any subsequent successors of the lease.
What are authorised guarantee agreements?
Authorised guarantee agreements are often imposed by landlords who give consent to the assignment of a lease. A solicitor will draw up the agreement and both parties can negotiate the terms of the agreement before it is signed.
The tenant who wishes to assign the lease will be giving their guarantee as to the performance of the lease obligations after you leave. If the assignee then breaches the terms of the lease, the landlord will look to you to be liable. If your successor assigns the lease to another party, you will no longer be liable for any breaches. If your successor does not re-assign the lease then you will be liable for breaches until the end of the lease. However, there are some cases where you would continue to be liable for breaches after your successor re-assigns, for example if your successor does not have the landlord’s consent to assign the lease you may still be liable.
Most landlords will not agree to assign a lease until you enter into an authorised guarantee agreement.