The following Property guidance note provides comprehensive and up to date legal information covering:
If a tenant wishes to take additional space in the same building or development, the parties may be tempted to vary the lease to include the additional space. However, a variation that increases the demise always results in surrender and regrant, regardless of the parties’ expressed intentions.
An unintended surrender and regrant can have the following disadvantages:
it can result in the loss of valuable covenants for the landlord (eg previous tenants and guarantors)
if the original lease was an old lease (granted before 1 January 1996), the regranted lease will be a new lease and the tenant will be automatically and irretrievably released on assignment where the regranted lease does not contain an obligation on the tenant to enter into an authorised guarantee agreement
if the original lease excluded sections 24–28 of the Landlord and Tenant Act 1954, the regranted lease will not be contracted out unless the correct statutory procedure has been followed
the regranted lease may trigger a charge to stamp duty land tax (SDLT) on the whole of the premises, old and new. The rent (and any premium) will count as chargeable consideration. The tenant is not entitled to a refund of the SDLT or stamp duty paid in respect of the original lease. Overlap relief is not available to the
**Trials are provided to all LexisPSL and LexisLibrary content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
0330 161 1234
To view our latest legal guidance content,sign-in to Lexis®PSL or register for a free trial.