What Is The Alienation Clause In My Commercial Property Lease?

There are a lot of different terms, words and jargon included within the numerous clauses within your commercial property lease. This is why it is highly recommended that you speak to our professional commercial property solicitors. They will ensure that you understand the terms within the clauses, as a tenant or a landlord. We will make sure the commercial property lease is drafted and reviewed to ensure you and your business or investment are protected.

In this blog post we look at the alienation clause in your commercial property lease and what it could mean for you.

Businesses evolve; they grow, develop, expand and change. This is why the alienation clause is required within the commercial property lease. This clause governs when the tenant can assign, sublet or share occupation. This is commonplace in group companies or via serviced spaces for example.

Within the alienation clause there should be clarification surrounding reasonableness and process. This means that the landlord’s consent should not be unreasonably withheld or delayed. Within this part of the clause there will need be a clear checklist of the information a tenant must supply with their application.

The covenants and guarantees will also be covered within this clause of the lease. It is likely to state that the landlord may require an AGA, also known as an Authorised Guarantee Agreement. This will be required from the outgoing tenant. It could also request a guarantor for the new / incoming tenant. This needs to be clearly defined within the clause.

Underletting terms will also be included within the alienation clause too. This states that where subletting is completed it is not less than open market rate. The terms must not be more favourable that those within the commercial property lease. The coterminous rent review cycles will also be completed where possible.

The lease will also talk about group sharing and desks, where applicable. It will state is intro-group sharing or short-term desk licences with conditions are permitted. The conditions could include things like no exclusive possession and no security of tenure for example. A condition may also be that no registration is required. This is done to reflect modern occupation models for many businesses and organisations.

Within the alienation clause of the commercial property lease it will also talk about the change of control. This will be aimed at corporate tenants and address whether a change in control will count as an assignment. It will also clearly layout the circumstances in which consent it required.

If you need your commercial property lease drafted, negotiated or reviewed, speak to our commercial property lawyers in Peterborough now. We will happily talk you through the lease and ensure that it protects your best interests.