Find a Solicitor for your

Licence to Underlet

Hassle-free help from the UK's best commercial property solicitors.
In the last year, we helped 2,282 people across the UK solve their legal issues
Great Interaction
Great interaction. I had a simple question which would have cost a fortune going to see a local solicitor. It was all very professional but still friendly. The solicitor I spoke to was the chief executive of her law firm (I looked her up on LinkedIn). You are dealing with very good lawyers who earn additional money through Lawhive. I would definitely use this service again. Highly recommend.
Mark,
29 December, 23
The solicitor who was appointed to me was outstanding
Very simple to engage with instant confirmation in writing straight after. Daniel, the solicitor who was appointed to me, was outstanding in his approach, his understanding of the technicalities of the law and, crucially, a genuine care for the client. Would definitely advise using Lawhive, you won't regret it.
Tahir Idris,
04 October, 23
We were so pleased to find the Lawhive website
After struggling to find a solicitor willing to give us advice, and for a reasonable cost, we were so pleased to find the Lawhive website. At first we wondered how well it would work, but needn't have worried at all - the whole process was simple, straightforward and professional and great value for money. We felt extremely lucky to be matched with our solicitor, Sonay Erten, as she was exactly what we were looking for - knowledgeable, patient and kind - a refreshing change from solicitors we have used in the past. She showed a great deal of empathy for our situation and explained things in language that was easy to understand (rather than the usual "solicitor" talk, which can be intimidating). She's a shining example of what a solicitor should aspire to be and I wouldn't hesitate to recommend her to others or use her again in the future. We came out of our session reassured and confident of what we needed to do going forward, so a big "thank you!"
Julie Taylor,
01 June, 23
Fast and professional
I got the outcome I wanted regarding cease and desist to a competitor spreading defamatory statements about my business. Fast and professional, and at a much lower price than high street firms. Highly recommended thanks.
Jason Hunter,
23 July, 23
Very efficient! Can highly recommend.
I found the website very easy to use. Quick responses and I was even able to talk to someone who was friendly and competent. She rang me rather than emailed me. A solicitor was quickly found who could help me and once the relevant identification was approved he started work. Within two days the solicitor had checked documents and commented on them. Very efficient! Can highly recommend.
Pauline Piper,
15 February, 23
The service was fast and ultra professional
Sonay was really informative and understood my questions instantly, what I thought was complex Sonay simplified massively. She regularly checked in and the service was fast and ultra professional. Would highly recommend.
Jamie Crichton,
09 November, 23
Great service and very reasonably priced,
Great service and very reasonably priced, Kem was really helpful and professional. Would use again
Sarah Shanks,
21 November, 23
Great Interaction
Great interaction. I had a simple question which would have cost a fortune going to see a local solicitor. It was all very professional but still friendly. The solicitor I spoke to was the chief executive of her law firm (I looked her up on LinkedIn). You are dealing with very good lawyers who earn additional money through Lawhive. I would definitely use this service again. Highly recommend.
Mark,
29 December, 23
The solicitor who was appointed to me was outstanding
Very simple to engage with instant confirmation in writing straight after. Daniel, the solicitor who was appointed to me, was outstanding in his approach, his understanding of the technicalities of the law and, crucially, a genuine care for the client. Would definitely advise using Lawhive, you won't regret it.
Tahir Idris,
04 October, 23
We were so pleased to find the Lawhive website
After struggling to find a solicitor willing to give us advice, and for a reasonable cost, we were so pleased to find the Lawhive website. At first we wondered how well it would work, but needn't have worried at all - the whole process was simple, straightforward and professional and great value for money. We felt extremely lucky to be matched with our solicitor, Sonay Erten, as she was exactly what we were looking for - knowledgeable, patient and kind - a refreshing change from solicitors we have used in the past. She showed a great deal of empathy for our situation and explained things in language that was easy to understand (rather than the usual "solicitor" talk, which can be intimidating). She's a shining example of what a solicitor should aspire to be and I wouldn't hesitate to recommend her to others or use her again in the future. We came out of our session reassured and confident of what we needed to do going forward, so a big "thank you!"
Julie Taylor,
01 June, 23
Fast and professional
I got the outcome I wanted regarding cease and desist to a competitor spreading defamatory statements about my business. Fast and professional, and at a much lower price than high street firms. Highly recommended thanks.
Jason Hunter,
23 July, 23
Very efficient! Can highly recommend.
I found the website very easy to use. Quick responses and I was even able to talk to someone who was friendly and competent. She rang me rather than emailed me. A solicitor was quickly found who could help me and once the relevant identification was approved he started work. Within two days the solicitor had checked documents and commented on them. Very efficient! Can highly recommend.
Pauline Piper,
15 February, 23
The service was fast and ultra professional
Sonay was really informative and understood my questions instantly, what I thought was complex Sonay simplified massively. She regularly checked in and the service was fast and ultra professional. Would highly recommend.
Jamie Crichton,
09 November, 23
Great service and very reasonably priced,
Great service and very reasonably priced, Kem was really helpful and professional. Would use again
Sarah Shanks,
21 November, 23
Rated 4.8 / 5. Showing our 4 & 5 star reviews.

About

A Licence to Underlet is a legal document that allows a tenant to sublet their property to another person. The tenant is still responsible for the property and any damage caused by the subtenant. A solicitor can draft and/or proofread a license to underlet to ensure that it is legally binding and protects the rights of landlord, tenant and subtenant alike.Next steps

How much does a Licence to Underlet cost?

The cost for a licensed solicitor to help with a Licence to Underlet is dependent on many factors including the complexity and specific requirements of the case. On average it is expected to range from £250-£300 but in some cases it could cost as much as £500.

Money-back guarantee

If you're not satisfied, contact us for a full refund, no questions asked.

Transparent fixed-fees

No hidden fees. On average 40% cheaper than high street firms.

Expert legal help

We assign the best fully regulated UK based solicitors to your case.

Get your free case evaluation now

Tell us about your case and we'll assess your legal matter for free.

Licence To Underlet Solicitors

If you want to sublet your premises as a tenant you will first usually need to get permission from your landlord. This allows the landlord to have a say in how the tenancy is run and who the subtenant is.

Underletting is a useful option for the owner of commercial property who wants to dispose of part or all of their premises. When you underlet your premises, you become a landlord to a subtenant or undertenant. 

licence-to-underlet

If you are planning to enter a sublet agreement or you are already engaged in one, it is important to seek legal support to make sure you fully understand the obligations placed on you by the agreement and your rights and responsibilities as a landlord or underletter.

Our network of commercial property solicitors is on hand to help you navigate the complex world of underletting.

A solicitor can draft and proofread a license to underlet to make sure that it is legally binding and protects the rights of landlords, tenants and subtenants alike.

Get in touch with our legal assessment team for a free case evaluation and quote today.

What is a licence to underlet?

A licence to underlet is permission given by a landlord to a tenant that allows a tenant to sublet the entirety or part of a property they’re renting.

The tenant is still responsible for the property and any damage caused by the subtenant. As the original tenant you remain a tenant to your landlord so you must be aware of your responsibilities to them and not ignore them.

The original tenant and the landlord will sign a legal document which allows the tenant to sublet the property unless the landlord has a good reason for refusing. 

The landlord can use the licence to underlet to include tenant obligations relating to the proposed underlet. Landlords will typically grant permission to sublet through this formal notice. 

Whole Underlet Licence

A whole underlet licence gives the tenant permission to sublet the entire property that they’re renting. 

Part Underlet Licence

A part underlet licence gives the tenant permission to sublet part of the property that they are renting from their landlord.

Tenants with leases in smaller properties may only be permitted to underlet part of the building they occupy.

A larger building where a tenant leases several floors in an office building may allow the tenant to underlet part of their building by renting out a floor to a business that requires more space.

When might a commercial property owner grant a licence to underlet? 

When a tenant requests to underlet the property they’re renting it is up to the landlord to decide whether they want to grant a licence to underlet or not.

Whether a landlord decides to grant the licence will depend on the type of property, their relationship with the tenant and the landlord’s circumstances.

A landlord should get legal advice before entering into a licence to underlet to ensure the terms and conditions are worded correctly and will be legally binding.

A landlord may choose to grant a licence in the following circumstances:

  • When the rent for the sublease is no less than what the current pays under their lease.

  • When the sublease includes rent review controls which reflect those of the main lease.

  • When the tenant does not benefit from a fee paid by the subtenant.

  • When the subtenant is not granted a rent-free period.

  • When the subtenant provides a deposit or guarantee.

  • When the subtenant must comply with the obligations in the lease.

  • When the sub-lease is excluded from the renewal provisions of the Landlord and Tenants Act 1954, otherwise a subtenant can benefit from the rights of security of tenure.

What is the difference between a licence to underlet and a sublease?

A sublease and underlet are essentially the same.

Both underleases, granted by a licence to underlet, and subleases create new leases from an existing lease.

The terms can be used interchangeably, one might be used in one location or region while the other could be used elsewhere.

Can a tenant underlet part of their commercial property to another party without a licence?

In some circumstances, this may be possible. However, in the majority of cases, a lease will say that a tenant must get permission from the landlord if they want to sublet a property in part or whole.

If you are unsure, your lease it should outline whether subleasing is possible and under what circumstances it is allowed.

What are the rights and responsibilities of tenants who are granted a licence to underlet?

When a tenant is granted a licence to underlet a new lease will be created between the tenant and the undertenant.

As the original tenant named on the lease, you will be responsible for observing the tenant covenants specified in the lease until it comes to an end. You can be held personally liable if the sublessor breaches the lease.

Can a licence to underlet be revoked? 

A licence to underlet can be revoked:

  • When a tenant applied for the licence with fraudulent documents or a forged identity.

  • When someone other than the licensee is using the premises.

  • If the tenant is prosecuted or receives a disposal.

  • When the tenant does not have the right to work in the UK, this doesn’t apply to directors of UK-registered companies.

  • When there has been a breach of licence criteria or the landlord decides a tenant is unfit to hold a licence.

How do rent payments work for a subtenant under a licence to underlet?

When you apply for a licence to underlet, you’ll need to be comfortable that your subtenant will be able to afford the rent on the premises and trust that they’ll comply with the terms of the underlease. 

Typically, the rent charged to a subtenant follows the rent paid in the original lease or is calculated against the market rent.

When a subtenant breaches the terms of the lease, by not maintaining the property for example, your lease will be breached and you’ll have to cover the costs of rectifying any issues.

Can a subtenant make alterations to the commercial space under a licence to underlet?

Most commercial leases don’t allow tenants to make alterations to a rented commercial space without the permission of the landlord.

If a landlord consents to any alterations planned by a tenant or subtenant, this will be recorded in either of the following legal documents:

  • Licence to alter – should establish what the proposed works are, how they comply with relevant legislation and require the tenant to remove works at the end of their tenancy

  • Licence to sublet – the works allowed will usually be specified in the document

A tenant who makes alterations to their property without consent may be in breach of their lease. A landlord can respond by evicting a tenant. Tenants may also be charged for the landlord’s costs when removing any alterations and or evicting a tenant. 

Consent can be applied for after alterations have been made, as long as a landlord okays them.

Using Lawhive

Transparent fixed-fees

Know exactly what you will pay. On average 1/3 of the cost of a high street firm

Hassle-free

Receive a custom quote in as little as 5 minutes. No hassle, no obligation.

Conveniently online

Follow your case from the comfort of your home with our online platform.

Brilliant support

Our world-class support will be with you every step of the way.
Traditional Law Firms

Pay by the hour

Hourly charges mean costs are hard to predict and you could be charged more than you expect.

Frustrating

It can be take days or weeks to hear updates from your solicitor.

Outdated and offline

Offline and slow procedures will require you to visit firms in-person.

No support

No dedicated support team. You'll have to deal with issues on your own.

What happens if the main lease is terminated while a licence to underlet is in place?

If the lease between the landlord and the original tenant is cancelled consensually the tenant’s interest in the property passes to the landlord, without neglecting the rights of the undertenant. 

When a licence is created the licensee benefits from the non-exclusive use of a property, the licensor therefore, can also occupy the property at the same time, and grant additional licences to other businesses.

This is unlike a lease that grants a tenant exclusive possession, so not even a landlord can enter a property without the tenant’s permission. 

A licence to underlet can unintentionally become a lease. This is a risk to both landlords and tenants who enter into this type of agreement on the understanding it will be a short-term arrangement.

How long does a licence to underlet last? 

A licence to underlet typically last 6-12 months, however, they can continue longer if both parties agree. Usually, the agreement is for a set period.

When a licence to underlet continues for a significant time past 12 months a court may determine that it has become a lease.

Is a licence to underlet typically subject to rent review clauses?

The landlord will want to ensure that the rent in the sublease is at least at a similar level to the rent in the main lease, meaning the landlord maintains their income if the original lease is terminated.

Rent review clauses may be included in a licence to underlet which allows for the adjustment of rent at various intervals. 

There are a few main types of rent review clauses in licence to underlet agreements:

  • Index-linked rent review where the rent is adjusted periodically following an index, such as the Retail Price Index or Consumer Price Index which account for inflation 

  • Market rent review where the rent will be reviewed regularly in line with market rates for similar properties. In this case, the rent paid by the undertenant would reflect what tenants in similar properties pay. The lease must specify the frequency of rent reviews and how new rent adjustments are calculated

  • Fixed percentage increase where the rent will increase by an agreed percentage at specified points. This benefits both parties as they know how much rent to pay and to expect to collect respectively

How should a tenant protect their interests when negotiating a licence to underlet?

Tenants can take several steps when looking to protect their interest during a negotiation for a licence to underlet. 

Key points to consider include: 

  • A heads of terms agreement which sets out the key terms to be included in a contract, providing clarity for both parties before they sign on the dotted line

  • Contract drafting, usually be done by the landlord's solicitor. At this stage, the tenant and undertenant can request changes to the licence

It is best practice for three copies of the agreement to be created, one for each interested party. The landlord, tenant and undertenant should all keep a copy of the document.

A single document can also be created if this makes things easier, including separate sections for each party

You should always seek legal advice before entering into a complex legal arrangement like a licence to underlet. They can have serious ramifications if entered into lightly, or without considering their legal implications.

How can Lawhive help?

Our network of commercial property solicitors can assist with the drafting of a licence to underlet ensuring your rights are fully represented.

We can also review the language used in the licence to ensure that the relationship between all parties remains a landlord-tenant relationship under the terms of a licence and not a lease.

If you’re a landlord worried about a tenant under a licence receiving security of tenure we can ensure this isn’t the case.

If you’re a tenant with a subtenant we can help you when you’re being pursued for your subtenant’s lack of care maintaining a property.

Get in touch today for a free case evaluation to discuss your requirements with an expert commercial property solicitor. 

Money-back Guarantee
Get a quote now

We pride ourselves on helping consumers and small businesses get greater access to their legal rights.

Lawhive is your gateway to affordable, fast legal help in the UK. Lawhive uses licensed solicitors you can connect with online for up to 50% of the cost of a high-street law firm.

Lawhive Ltd is not a law firm and does not provide any legal advice. Our network includes our affiliate company, Lawhive Legal Ltd. Lawhive Legal Ltd is authorised and regulated by the Solicitors Regulation Authority with ID number 8003766 and is a company registered in England & Wales, Company No. 14651095.

For information on how to make a complaint about an experience you have had with our SRA regulated affiliate company Lawhive Legal Ltd click here.

Lawhive Legal Ltd is a separate company from Lawhive Ltd. Please read our Terms for more information.

© 2024 Lawhive
86-90 Paul Street, London EC2A 4NE

Version: 69de4d1