It is usual for a commercial lease agreement to have a clause stating that if the tenant assigns the lease to a third party, they will enter into an AGA.  The AGA puts an obligation on the outgoing tenant to guarantee performance (such as paying rent and repair covenants) by the incoming tenant.

SDLT may be payable on commercial property transactions including:

• commercial property, e.g. shops or offices
• agricultural land
• forests
• any other non-residential use land or property
• where six or more residential properties are bought in a single transaction

A break clause is a clause included in a commercial lease allowing the landlord and/or tenant to end the lease early.  The right to break may be exercisable on a specified date or on a rolling basis at certain points during the term of the lease.

The Code for Leasing Business Premises in England and Wales 2007 states that before a break is exercised, the tenant should be up-to-date on rent payments, intend to cease occupation, and have no continuing sub-leases.  All matters relating to dilapidations can be settled later.

A forward funding agreement as it relates to property development is where the purchaser or fund (e.g. a pension fund) provides the finance to cover all costs of the development as it is needed, e.g. architects’ fees, building contractors, etc.  Although the developer may see less overall profit than if it had self-funded, a forward funding agreement significantly mitigates risk.