What is a Notice of Assignment ?

A Notice of Assignment is needed to record transfer of legal rights. It is generally a reasonably straightforward procedure, but all parties involved need to be aware of the assignment.

The most common example of when a Notice of Assignment is necessary regards the lease of a property. When a leaseholder sells their interest in a property to someone else, it is vital that the landlord and management company are aware of the transfer. A Notice of Assignment must be served to the landlord or management company under the Law of Property Act 1925.

There are various implications if appropriate notice is not served. The landlord or management company would be aware of a proposed transfer because a Licensed Conveyancer would be raising enquiries regarding the lease relating to a particular property. It is important, however, that they are informed of the exact date of the transfer. Until Notice of Assignment has been submitted, the previous lessee is responsible for ensuring that the terms of the lease are complied with. This may be with regard to cleanliness and maintenance of the premises. More importantly, they will be responsible for any ground rent and service charge payments. This is in accordance with Section 136(1) of the Law of Property Act 1925. If a management company are in charge of a block of flats, each tenant is likely to hold a share in that company. The Notice of Assignment will assign the existing shares to the new tenant. Landlords and management companies also need to be made aware of any charges over the premises. This is usually in the form of the tenant obtaining a mortgage in order to purchase the lease.

In respect of shares of a property, the new tenant or their Conveyancer will need to submit a Companies Form 128(4). This is pursuant to Section 128(4) of the Companies Act 1985. Once completed, this form should be sent to the Registrar of Companies in Cardiff.

Another example of when a Notice of Assignment is necessary is when a mortgage lender merges or is taken over by another company. The mortgagee may not be informed of the change straightaway. As a result, the mortgagee will be continuing to pay their original mortgagor. Once the Notice of Assignment has been received by the mortgagee, they have a responsibility to pay the new lender. Until appropriate notice has been served, it is the responsibility of the old lender to ensure that the new lender receives payment. For this reason, Notices of Assignment should be carefully thought out, taking into account every possible eventuality. They should be written in such a way that every party is clear as to their obligations.

An example of a typical Notice of Assignment in this respect may read: “Dear