Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Underlease definition

What does Underlease mean? An underlease (sublease) is a lease granted by a tenant (the sub‑landlord or intermediate landlord) to a sub‑tenant out of the tenant’s own leasehold, rather than by the freeholder. It is carved out of, and strictly subject to, the headlease: it cannot run for longer than, or confer greater rights than, the headlease. In practice, the underlease term is often one day shorter than the residue of the headlease. Key features and risks: - Typically requires the head landlord’s consent where the headlease contains an alienation covenant; underletting without consent can be a repudiatory breach and expose the headlease to forfeiture. -...

Assignment of Part of the Demised Premises: legal effects, apportionment, CRAR and forfeiture, landlord’s consent, and 1954 Act issues (England and Wales)

Published by a LexisNexis Property expert

Practice notes

Introduction

Most leases impose an absolute bar on assigning part of the demised premises, owing to likely complications concerning and arising from:

apportionment of rent, other sums and covenant obligations as between the split parts
progressive dilution of tenants’ covenant strength
the physical subdivision of the premises
potential knock-on adverse effects on rental values and/or the value of the landlord’s reversion

Nevertheless, assignment of part is sometimes allowed in practice under leases granted for a substantial term on payment of a significant premium or on a rent‑sharing basis, often with development obligations on the tenant (this applies to both commercial and residential schemes).

Where the term is very long (potentially up to 999 years), landlord’s consent may not even be required if the assignment meets strictly pre‑determined criteria and/or is notified to the landlord within a specified period following the event. If the lease is silent on the matter, an assignment of part will generally be allowed...

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Web page updated on 21/05/2026

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