What is it: A Deed of Assignment

What is a Deed of Assignment?

A deed of assignment is a formal legal instrument used to transfer the benefit of contractual rights and burden of obligations from one party (the assignor) to another party (the assignee). Usually, the document is executed as a deed, with appropriate signing and witnessing, to be valid.

When is a Deed of Assignment typically used?

Such deeds are used in various contexts, including the assignment of arrears, options to purchase property, equitable interests in land, contractual rights, construction documents and security. In the context of commercial leases, a deed of assignment means the transfer of a lease, contractual rights, or security interests (such as rent deposits) from the assignor to the assignee.

Who pays for It?

As to who pays for the drafting of the deed of assignment, this usually depends on the negotiating strength of each party in the transaction. In some instances, each party will be responsible for their own costs, sometimes one party will pay the whole of the other’s legal costs or give a contribution towards the same.

Typically, on lease assignments, the incoming tenant (assignee) often pays the costs, but parties may agree otherwise. The outgoing party (assignor) may be required to pay the landlord’s legal costs for consent. Generally, the party seeking the assignment is expected to bear the legal fees, but market practice varies and should be confirmed in negotiations.

What does a Deed of Assignment cost?

There are no fixed costs for a deed of assignment. Costs depend on the complexity of the transaction and if the terms need to be heavily negotiated.

Does a Deed of Assignment need registering?

Registration requirements for deeds of assignment depend entirely on what is being assigned. Generally, a deed of assignment does not need to be registered at HM Land Registry unless it transfers a registrable interest in land, such as a lease of seven years or more. For company parties, assignments involving charges over assets may need registration at Companies House. Your solicitor will advise if registration is necessary in your case. Failure to register—where required—can jeopardise the enforceability of the transfer.

Who drafts a Deed of Assignment?

Conventionally, a deed of assignment is normally prepared by the solicitor for the outgoing party (assignor) or, where landlord consent is involved, sometimes by the landlord’s solicitor. The incoming party’s solicitor will review the document to ensure the assignment is properly effected and that their client’s interests are protected. It is essential all parties obtain independent legal advice to avoid unintended liability or loss of rights.

A deed of assignment is a key document especially in the context of commercial property. Legal advice helps ensure the deed reflects the agreed position and avoids disputes later in the lease. If you require assistance with a deed of assignment, please do get in touch with our Real Estate Team who would be happy to assist.