If a freeholder agrees to allow a leaseholder to extend their demise, would the surrender and regrant facilitating this change be caught by the right of first refusal?

Right of first refusal

Part 1 of the Landlord and Tenant Act 1987 (LTA 1987) provides that in specified circumstances a landlord is obliged to offer to sell their interest to tenants before otherwise being allowed to dispose of that interest. The precise scope of these provisions is defined in some detail in LTA 1987, but they will apply to the typical private landlord who owns premises containing multiple residential flats that are not let on short-term tenancies. In considering any particular case there is no substitute for checking the statutory provisions carefully.

Where LTA 1987 does apply, the obligation on the landlord is not greatly onerous but it can be inconvenient as the offer to qualifying tenants must be kept open for at least two months. The obligation is reinforced by a criminal sanction under LTA 1987, s 10A, which is now an unlimited fine.

Surrender and regrant

The surrender of an existing lease and the creation or regrant of a superseding lease can occur for a variety of reasons. A frequently arising reason is the extension of the demise. For obvious reasons, the parties will often prefer not to grant a new separate tenancy in respect of the area to be added but rather to alter the existing tenancy to include that area. The inclusion of this new area still entails a fresh demise even t