Q&As

What happens to an under lease/sub-lease when the landlord of the under lease lawfully assigns the head lease to the tenant of the under lease so that the tenant of the under lease in effect becomes the tenant of the superior landlord as he has been assigned the head lease? Is the under lease automatically extinguished or does it merge with the head lease?

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Published on LexisPSL on 26/05/2016

The following Property Q&A provides comprehensive and up to date legal information covering:

  • What happens to an under lease/sub-lease when the landlord of the under lease lawfully assigns the head lease to the tenant of the under lease so that the tenant of the under lease in effect becomes the tenant of the superior landlord as he has been assigned the head lease? Is the under lease automatically extinguished or does it merge with the head lease?
  • What is merger?
  • Practical steps to effect merger

What happens to an under lease/sub-lease when the landlord of the under lease lawfully assigns the head lease to the tenant of the under lease so that the tenant of the under lease in effect becomes the tenant of the superior landlord as he has been assigned the head lease? Is the under lease automatically extinguished or does it merge with the head lease?

What is merger?

A lease terminates as a result of merger when both the lease and the reversion of that lease become vested in the same person—see Rye v Rye. As set out in Merger in law: Hill and Redman's Law of Landlord and Tenant, 2:

‘For the purposes of the law of merger, the reversion is deemed to be the greater estate, notwithstanding that it is in fact shorter than the term; hence a term of 1,000 years can be merged in a reversionary term of 500 years. Where the term merges into the reversion, the covenants attached to it are extinguished.’

However, the position in equity is different. Where the reversion and the term of years granted by the lease are held by the same person in the same right, the question of merger is governed in equity by the intention of the parties and there is no merger if it is intended that the term should be kept

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