The following Property guidance note provides comprehensive and up to date legal information covering:
The general common law principle is that when a lease comes to an end any underlease automatically terminates.
Statute intervenes on surrender of a lease. It is a consensual termination and the tenant's interest is deemed to pass to the landlord subject to the rights of the undertenant. The effect of a merger is the same.
The same applies if the lease is surrendered (by deed or by implied surrender) for the purpose of granting a new lease. The tenant or new tenant has the same rights against the undertenant (insofar as they do not exceed those in the surrendered lease) and the undertenant has the same rights under the underlease as if the original lease had not been surrendered.
An underlease automatically terminates on the exercise by either the landlord or the tenant of a break clause in the lease. It is a unilateral act which does not need the consent of the other party. Even where the break notice is served by agreement between the landlord and tenant in a deliberate attempt to obtain vacant possession against the undertenant, the notice does not take effect as a surrender despite its consensual nature. This is a matter
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