A deed of variation is an agreement between the lessor and the lessee to alter the terms of the lease. There are myriad reasons why a deed of variation might need to be entered into, which might include altering covenants, changing rent or service charge provisions, or inserting a break clause into a lease. A purported deed of variation which extends either the term of the lease or the extent of the demise operates at law as a surrender and re-grant of the lease (see Practice Note: Lease variations—surrender and re-grant issues). A lease operates as a contract between landlord and tenant. As a result they are able to vary the terms of the agreement

In theory, a landlord might have several remedies available in relation to unlawful alterations: (i) forfeiture; (ii) injunction and/or damages; and (iii) using them as a basis for challenging the right of a tenant to use the procedure under the Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993). Theoretically, one of these could be used to slow down, or stop, a claim for a new lease. Forfeiture Under LRHUDA 1993, the status of a claim to forfeit raised after service of a LRHUDA 1993, s 42 notice tends to favour the tenant. The service of a notice under LRHUDA 1993, s 42 operates as a type of statutory ‘contract for leasing’. And, under LRHUDA 1993, s 56, subject to issues about entitlement, the service of such a notice then obliges a landlord to grant

The request made under section 21 of the Landlord and Tenant Act 1985 (LTA 1985) is for a summary of 'costs incurred'. Those costs are 'relevant costs' in relation to service charges payable or demanded as payable by the leaseholders of a dwelling. 'Relevant costs' are costs or estimated costs incurred or to be incurred on behalf of the landlord or a superior landlord in connection with matters for which service charge is payable – LTA 1985, s 18. Those relevant costs are costs incurred or to be incurred in the period for which the service charge is payable or in an earlier or later period. Relevant costs could include overheads. Where

Section 101(1) of the Law of Property Act 1925 (LPA 1925) contains the ability for a mortgagee to appoint a receiver, who will be responsible for collecting income and protecting property over which they have been appointed. The right to appoint a receiver under LPA 1925 arises when the mortgage monies become due (LPA 1925, s 101(3)). For more information, see Practice Note: Effect of appointment

LPA receivers The Law of Property Act 1925 (LPA 1925) contains the ability for a mortgagee to appoint a receiver—the right to appoint a receiver under the LPA 1925 arises when the mortgage monies become due. A mortgagee would appoint a receiver to collect rent or other income from the mortgaged property and/or to manage the property generally, for example to deal with the management and maintenance of the property. For more information on LPA receivers, see Practice Note: Receivers appointed by statute, including LPA receivers. Appointment of an LPA receiver The effect of the appointment of an LPA receiver is significantly different from that of an appointment of an administrator, liquidator or trustee in bankruptcy. The appointment of an LPA receiver is a remedy of a mortgagee. It is not an insolvency procedure and does not necessarily mean that the

We refer you to Practice Note: Guarantor protections and how to exclude them in guarantee documentation—waiver of defences clauses, in particular the section: Change in identity of the parties. This provides: Any change in the identity of the principal or guaranteed party will revoke a guarantee as to future transactions

Under section 104(1) of the Law of Property Act 1925 (LPA 1925), a sale by a mortgagee exercising its power of sale will override all rights over which the charge has priority. LPA 1925, s 104(1) provides: ‘A mortgagee exercising the power of sale conferred by this Act shall have power,

In order for a secured lender to appoint, ordinarily, an event of default has to have occurred under the terms of the loan facility and/or associated debenture. In this scenario, the secured lender has made a loan to a company that is subject to a company voluntary arrangement (CVA), secured by way of legal charge, and it appears the loan and security has been advanced/granted after the date that the company

The inheritance tax (IHT) treatment of the loan will depend on the particular wording and terms of the loan in question (for example, whether or not the loan is secured). The Will of the lender may also need to be considered in case, for example, there is wording in the Will which releases the debt. It is possible that the effect of the distinction between whether the loan is treated as an asset of the death estate or whether it is a failed potentially exempt transfer immediately before death may ultimately be neutral as to the IHT payable. However,

The mortgagee has wide powers to enforce its security where the security over the land is in the form of a legal mortgage. The powers include: • take possession of the land • appoint a receiver (or in some cases, an administrator) • sell the land without resorting to the court, or • apply to the court for foreclosure (which is rarely used in practice) For further information, see Practice Note: Enforcement—security over land. The mortgagee’s rights and responsibilities vary according to the method of enforcement. A mortgagee in possession has certain rights and responsibilities. See Practice Note above and Practice Note: Mortgages and land—enforcement of mortgages and legal charges over land. However, a mortgagee will usually avoid possession and appoint a receiver instead,

A surrender by operation of law occurs when the unequivocal conduct of both parties is inconsistent with the continuation of the tenancy. This is demonstrated by the delivery of possession by the tenant and acceptance by the landlord. The landlord must have the intention to accept the surrender. When a surrender by operation of law is accepted, the tenancy and all ongoing tenant or guarantor liabilities end. The High Court recently discussed this in Padwick Properties Ltd v Punj Lloyd Ltd, where it emphasized that the unequivocal conduct of both parties is required—a tenant cannot unilaterally divest itself of its obligations under a lease. The parties' actions are considered objectively. The test is whether the landlord’s conduct is ‘so’ inconsistent with the continuation of the tenant’s lease that it could only be justified as being lawful on the basis that the landlord has accepted the tenant’s implied offer to give back possession,

Provisions intended to protect certain leaseholders of qualifying leases of ‘relevant buildings’ from the costs of rectifying certain historic defects, and making provision for the recovery of those amounts from persons who are landlords under leases of the building (or any part of it) are set out in sections 116–125 of the Building Safety Act 2022 (BSA 2022) and BSA 2022, Sch 8. Under BSA 2022, s 119(2), a ‘qualifying lease’ means a lease longer than 21 years of a single dwelling in a relevant building under which