Lease variations

Lease variations

While this Overview primarily concerns commercial property matters, it also touches on residential considerations.

Parties often wish to renegotiate the terms of an existing lease. Following completion of a lease, landlords and tenants are free to negotiate a variation to the lease terms (although generally the other party is under no obligation to negotiate or agree any variation).

The parties will usually enter into a deed of variation to expressly record any agreed variation to the original lease. If the change to lease terms is a personal or temporary concession, the parties may agree to enter into a side letter instead—see Practice Note: Side letters to leases and Precedent: Side letter modifying lease terms.

Key areas of risk relating to lease variations include:

•
inadvertent surrender and regrant (by operation of law)
•
release of guarantors (or former tenants that remain bound by tenant covenants) and other issues relating to guarantors
•
failure to obtain necessary third-party consents (eg superior landlord, mortgagee)
•
unintended consequences, including in relation to superior leases, underleases or tax, and
•
failure to comply with registration requirements

For general guidance

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