What is a concurrent lease?

In the context of residential flat schemes, a concurrent lease is a lease of the reversion that is granted by a developer typically to a management company after it has granted the individual leases of the flats to the respective buyers of those flats. It is, therefore, an intermediate lease which ‘sits’ between the developer (as freeholder, or the owner of a superior leasehold interest) and the flat tenants. For further guidance, see Practice Note: Concurrent leases.

This form of lease is sometimes also called an ‘overriding lease’. However, this runs the risk of confusion with the form of lease to which a former tenant or guarantor is entitled under section 19 of the Landlord and Tenant (Covenants) Act 1995 (LT(C)A 1995). Consequently, it is preferable to use the term ‘concurrent lease’.

By granting a concurrent lease to a management company, the developer can:

1. •

   secure a regular income from the flats (in addition to the premiums paid by the flat tenants on the grant of the flat leases) by requiring the management