Defining long funding leases: commencement and transition: pre-existing heads of agreement: relating to two or more assets, examples
There is a pre-existing heads of agreement for four aircraft that are to be used to deliver a new service between London and New York. The aircraft could be used individually, even though they are expected to be used together to provide a particular service.
The aircraft are not constituent assets of a combined asset, even though all four aircraft were intended to service the same route.
Therefore, although there is a pre-existing heads of agreement for all 4 aircraft, the other conditions at BLM23035 would need to be met if the lease of all 4 aircraft is to be an excepted lease and so outside the scope of the long funding lease regime. To the extent the conditions are met in respect of any one or more of the aircraft the derived lease may be an excepted lease.
There is a pre-existing heads of agreement to construct two buildings adjacent to each other and intended to form part of the same substantial development. The two buildings would not constitute a combined asset unless one could not realistically be used without the other. The mere fact, for example, that they shared a common air conditioning plant would not make the buildings a combined asset.
In contrast, the fixtures (such as lifts, heating and air conditioning) in each building are likely to be a combined asset because it is unlikely that any one asset would be of any use without the others. Therefore, the start of construction of one of the fixtures for a particular building would allow the derived lease (or leases) of other fixtures for that building to be an excepted lease (or leases).