With organised crime increasingly under scrutiny on Britain’s high streets, landlords should think carefully before agreeing to a change of tenant or business ownership without proper checks.
Stuart Bailey, Head of Commercial Property shares some insights on what that landlords should be thinking about:
For commercial landlords, an occupied property is generally preferable to a vacant one. Empty premises can mean lost rental income, continuing liabilities such as business rates (where payable by the landlord), insurance and maintenance costs, and the uncertainty of finding a replacement tenant. These pressures are particularly acute at a time when the retail sector continues to face significant challenges, with many businesses struggling with operating costs, subdued consumer spending and changing shopping habits. It is therefore understandable that landlords want to keep their premises occupied, maintain rental income and avoid unnecessary delays or legal costs when a tenant proposes a change of ownership or assignment of its lease.
However, the desire to keep premises occupied and avoid the financial burden of vacancy should not come at the expense of proper due diligence. Agreeing to a change of tenant without making appropriate enquiries may ultimately expose a landlord to risks far greater than the short-term costs of an empty property or the delay involved in obtaining professional advice.
A changing picture on Britain’s high streets
Investigations by the BBC have brought significant attention to allegations of organised criminality associated with certain mini-marts, convenience stores, vape shops and other high-street businesses.
The reporting has described alleged illegal working, the sale of illicit tobacco and vapes, suspected money laundering and arrangements involving so-called “ghost directors” — individuals whose names appear on company records but who may not actually control the businesses concerned.
The BBC has also reported on wider investigations into suspected criminal activity linked to high-street businesses. In response to growing concerns, the government announced a £30 million High Street organised crime unit in May 2026. In June 2026, it announced plans to extend the potential closure period for certain illegal shops to up to 12 months, allowing authorities more time to investigate suspected wrongdoing.
These developments demonstrate that the authorities are taking the risks associated with certain high-street businesses increasingly seriously.
It is important not to suggest that mini-marts or convenience stores generally are criminal enterprises. The overwhelming majority of businesses operate legitimately. Nevertheless, the investigations highlight how some commercial premises can be used as part of wider unlawful arrangements, with the identity of the true business owner or controller obscured behind other individuals or companies.
For landlords, that raises an important question: when a tenant asks to transfer a lease or change the identity of the business occupying the premises, how confident can the landlord be that the proposed arrangement is genuine?
Why a change of tenant should not be treated as a formality
We have received a number of enquiries from commercial landlords who have been asked to consent to a change in the ownership of a tenant’s business or to the transfer of a lease to another individual or company.
In some cases, landlords are inclined simply to issue a letter confirming their consent, without obtaining references, investigating the proposed assignee’s financial position or instructing solicitors to prepare a formal licence to assign.
A landlord may understandably regard such a request as a straightforward administrative exercise, particularly where the existing tenant has paid rent reliably and the proposed transaction appears uncontroversial.
However, the incoming tenant may have a very different financial position, business model or intention for the premises.
In some circumstances, a proposed change may involve a legitimate business sale or restructuring. In others, the individual or company named on the paperwork may not be the person who will actually operate or control the business.
A landlord who simply accepts the proposed change without making appropriate enquiries may lose an important opportunity to identify potential problems before they arise.
This does not mean that landlords must investigate every tenant as though they were conducting a criminal investigation. It does mean that a request to change the identity of the tenant deserves proper consideration, particularly where the proposed arrangements are unusual or the information supplied is incomplete or inconsistent.
The temptation to save time and legal costs
We regularly encounter the practical concern that instructing solicitors to prepare a formal licence to assign will prolong the process and add to the cost of the transaction.
Some landlords therefore prefer to issue a short consent letter, believing that this will enable the assignment to proceed more quickly.
There may be circumstances in which a letter is legally effective. A document does not automatically become invalid simply because it is not entitled “Licence to Assign”. Its effect will depend on its wording, the terms of the lease and the surrounding circumstances.
Nevertheless, a brief letter may fail to address important matters, including the conditions of consent, the identity of the incoming tenant, the provision of guarantees or rent deposits, and any authorised guarantee agreement that may be appropriate.
More importantly, the speed of the documentation process should not distract from the need to assess the proposed assignee.
A landlord who saves a relatively modest sum by avoiding professional advice may expose themselves to considerably greater expense if the transaction subsequently gives rise to rent arrears, disputes or difficulties enforcing the lease.
A properly handled assignment provides an opportunity to review the incoming tenant’s financial standing, confirm the proposed arrangements and ensure that the landlord’s contractual position is protected.
What checks should landlords consider?
The appropriate checks will depend on the terms of the lease and the circumstances of the proposed transaction. Landlords should consider the following measures.
- Identity and ownership
Establish who the proposed assignee is. If the incoming tenant is a company, check its company details and consider who directs and controls the business. Where appropriate, seek clarification about the relationship between the proposed assignee and the person who will actually operate the premises.
- Financial standing
Obtain appropriate accounts, references or other evidence of financial capacity. A new tenant who cannot demonstrate an ability to meet the rental obligations may present a significant risk, even where the proposed business appears legitimate.
- Intended use
Understand what business will be conducted at the premises and whether the proposed use is permitted by the lease and relevant planning requirements.
- Unusual arrangements
Pay attention to unexplained changes in ownership, requests to put a lease in the name of someone who will not operate the business, or inconsistencies between the information supplied and the available records. These matters do not necessarily indicate wrongdoing, but they may warrant further enquiries.
- Formal documentation
Review the assignment provisions of the lease and take appropriate legal advice on the consent process. Where appropriate, use a formal licence to assign to record the landlord’s consent, any lawful conditions and the protections required for the transaction.
- Record keeping
Retain the application, supporting documents, enquiries, correspondence, consent and completed assignment documents. If concerns arise later, a clear record of the landlord’s decision-making may be valuable.
These checks are not a guarantee against future difficulties, nor does the law require every landlord to obtain every type of reference in every case. They are practical measures that can help landlords make informed decisions and protect their commercial interests.
Are commercial landlords likely to face tighter regulation?
This is where landlords should look beyond the immediate transaction.
Residential landlords are already familiar with a framework of statutory obligations, including the Right to Rent Scheme, which requires prescribed checks in relevant residential letting arrangements in England.
Commercial landlords are not generally subject to an equivalent blanket checking regime simply because they let business premises. Nor are they ordinarily responsible for carrying out an employer’s right-to-work checks merely because they have granted a commercial lease.
However, it would be unwise to assume that the current distinction between residential and commercial letting will never change.
The government’s increased focus on high-street organised crime, illegal working and the identification of those responsible for businesses raises the prospect of further regulatory intervention.
It is not currently established that the government intends to introduce a new statutory duty requiring commercial landlords to obtain references or verify the beneficial ownership of every incoming tenant. Equally, the precise direction of future policy remains uncertain.
Nevertheless, given the direction of enforcement and the problems highlighted by recent investigations, I would not be surprised if the government were eventually to consider imposing additional responsibilities on commercial landlords, particularly where changes of occupation or business ownership could be used to obscure accountability.
Landlords should therefore consider whether their existing procedures are sufficiently robust, rather than waiting for new legislation to be introduced.
There is a practical commercial reason to act now. A landlord who verifies the identity of an incoming tenant, understands the proposed business arrangements and documents consent properly is better placed to protect their investment, regardless of whether additional legislation is introduced.
Our advice to commercial landlords
Commercial landlords understandably want to keep their premises occupied and their rental income flowing. With business rates, insurance, maintenance and other costs to consider, the financial consequences of a vacant property can be substantial.
However, a vacant property is not necessarily the greatest risk a landlord faces.
An inadequately assessed incoming tenant, an assignment that has not been properly documented or a business arrangement in which responsibility is deliberately obscured may create much greater difficulties over time.
The recent investigations into organised criminality on Britain’s high streets provide a timely reminder that landlords should not simply assume that every proposed change of tenant is straightforward.
Although commercial landlords are not generally required by law to conduct comprehensive investigations into every incoming tenant, a proportionate and properly documented process is prudent. It can help protect the landlord’s investment today and put the landlord in a stronger position if regulatory expectations change in the future.
If you have been asked to consent to a change of tenant, a transfer of a commercial lease or a change in the ownership of a business operating from your premises, our commercial property team can advise on the lease requirements, the appropriate due diligence and the documentation needed to protect your position.
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This article is for general information only and does not constitute legal advice. The legal position will depend on the lease, the circumstances of the proposed transaction and the applicable law.