Head lease meaning

This Checklist is for use as part of a due diligence exercise when reviewing an option to renew a lease. It is chiefly directed at a buyer of a reversionary interest in the lease that includes the option, though it also flags matters a buyer of leasehold property benefiting from an option should consider. Ask whether the option gives rise to a perpetually renewable lease. Confirm the renewal provision clearly states the new lease will not itself include a further option to renew. Where each renewal lease carries another option, a perpetually renewable lease is created. A perpetually renewable lease is converted into: in the case of a head lease, the grant of a lease for 2,000 years; and in the case of an underlease, the grant of a lease for a term ending one day before the expiry of the term from which it is derived, and in both scenarios without any right to renew...

This Flowchart sets out the conditions that must be satisfied for the court to declare that a transaction constitutes a preference and grant relief. This diagram outlines the criteria that need to be met for the court to find a transaction is a preference and award appropriate relief...

Flowchart This flowchart outlines the requirements that need to be met to found a wrongful trading claim...

What are the restrictions on alterations and when is landlord's consent required? During any due diligence on acquiring a head lease, it is vital to assess the tenant’s scope to carry out alterations. Clauses that are overly restrictive can materially reduce value, obstruct a purchaser’s ability to raise finance, to let, to dispose of its interest in future, or otherwise deal with it, and can also present a continuing property management burden...

In this issue: Leasing property Transferring property Property taxes Key developments and horizon scanning Additional property updates this week Daily and weekly news alerts New and updated content Trackers New Q&As No Weekly Highlights on 24 April 2025 Leasing property Relief from forfeiture—residential sub-tenants of mixed-use building Derwent Lodge Estates Ltd v Signature Living Hotel Ltd (in administration) [2025] Lexis Citation 964 centred on an appeal from a District Judge’s decision setting the terms of relief from forfeiture for residential sub-tenants (the Appellants) of part of a mixed-use property after the head lease had been forfeited. The appeal was rejected, the court confirming, among other points, that the District Judge had lawfully exercised her discretion by granting relief via vesting a fresh lease of the entire building in the Appellants on terms matching those of the forfeited head lease. See: [2025] Lexis Citation 964. MCL Working Group publishes version 1.8 of MCL...

In this issue: Key developments and horizon scanning Service charges Disputes and remedies Repairing obligations and dilapidations Residential tenancies Property Disputes in Scotland LexTalk®Property Disputes: a Lexis®Nexis community Additional Property disputes updates Daily and weekly news alerts Dates for your diary New and updated content Trackers Latest Q&As Key developments and horizon scanning The Law Society has welcomed newly tabled amendments to the Leasehold and Freehold Reform Bill designed to limit sales of new leasehold houses and to ensure that, save in exceptional cases, every new home in England and Wales starts life as freehold. However, its President, Nick Emmerson, observed that, with no current measures to advance commonhold tenure, the Society endorses the Law Commission’s 2011 recommendations to modernise freehold law, making it simpler for houses on managed estates to be sold as freehold, and he urged the government to incorporate those reforms into the Bill. Emmerson also highlighted the...

In this issue Key developments and horizon scanning Residential tenancies Electronic communications Forfeiture Trespass and adverse possession Disputes and remedies Repairing obligations and dilapidations Neighbour and party wall disputes Easements and covenants Enfranchisement and right to manage Additional Property Disputes updates Daily and weekly news alerts New and updated content Dates for your diary Latest Q&A Key developments and horizon scanning BPF blog on the proposed ban of Upwards Only Rent Reviews The British Property Federation (BPF) has issued a Spotlight Series blog featuring insights from its Head of Communications, Dominic Curran, following the government’s 10 July 2025 announcement proposing a prohibition on Upwards Only Rent Reviews (UORRs). The article sets out what UORRs are and why they exist, assesses the government’s justification for change, and weighs potential impacts on investment, financing costs and the viability of development across the property sector. It also outlines the BPF’s position,...

Court of Appeal—professional negligence ARCHIVED : This Practice Note has been archived and is not maintained. The Court of Appeal upheld an appeal in a claim against solicitors, holding that the loss of a chance head of damage was too remote. At first instance, the judge concluded that Lewis Silkin LLP had fallen below the required standard by not advising their client to include a jurisdiction provision in his employment agreement with a franchisee involved in the Indian Premier League’s Twenty20 competition. Because no jurisdiction clause appeared in the contract, when the client later issued proceedings against the franchisee over a severance entitlement, he faced jurisdictional challenges (ultimately dismissed) brought by the franchisee, which postponed his obtaining judgment for £10 million in severance. The client’s case was that, with proper advice on jurisdiction, the contract would have contained an exclusive jurisdiction clause. On that footing, he said, he would have secured judgment for the severance sum sooner (as there would have been no hold‑ups arising from jurisdiction objections) and...

This Practice Note explains the changes to residential occupation in Wales introduced by the Renting Homes (Wales) Act 2016 (RH(W)A 2016). It outlines the revised terminology used by RH(W)A 2016, the bases on which a standard occupation contract can be ended, any preliminary requirements a landlord must satisfy before serving a valid termination notice, the steps for ending a standard occupation contract, and the format and service of notices under RH(W)A 2016. It also addresses possession proceedings under CPR Part 55. This Practice Note concerns only standard occupation contracts. For guidance on ending secure contracts, see Practice Notes: Renting Homes (Wales) Act 2016—when are occupation contracts secure? and Renting Homes (Wales) Act 2016—terms of secure contracts. Terminology under the Renting Homes (Wales) Act 2016 RH(W)A 2016 introduces terminology that differs from other housing legislation: lease, licence or tenancy agreement: occupation contract sub-tenancy: sub-occupation contract headlease: head contract tenant: contract-holder sub-tenant: sub-holder landlord: landlord head landlord: head landlord possession...

This Practice Note forms part of a suite that explores commercial property contract clauses from a purchaser’s viewpoint, identifying practical amendments and matters to look out for in practice—see: Buyer’s practical contract negotiation collection. It concentrates on standard provisions, in particular those addressing arrears in a contract for sale that is subject to leases. In this setting, arrears are sums owed by tenants that have not been remitted to the seller as at completion (including any VAT in respect of those sums). This Practice Note reviews issues emerging from the buyer’s due diligence on arrears, the position under the Standard Commercial Property Conditions (Third Edition—2018 Revision), how arrears are typically managed in day‑to‑day practice, and it offers pragmatic due diligence and drafting suggestions for buyers. It does not address arrears where a headlease is in play—see instead: Due diligence—head lease rent arrears—checklist. The right to collect or sue for arrears The buyer should check exactly how the contract deals with who has the right to collect, or sue...

ARCHIVED : This Precedent has been archived and is not maintained. To: The [ directors OR partnership ] [ Insert the Tenant’s name, address and (if applicable) company registration number ] Dear [ insert organisation name ] [ Insert the name and address of the Property ] (the Property) 1 Scope of this report and reliance This report has been produced solely for your benefit, relating to your intention to take a lease of the Property from [ insert name and address of Landlord ] (the Landlord), at an initial yearly rent of £[ insert rent ] [ plus VAT ]. It proceeds on the basis that the Property will be used as a [ insert current use ] and that you do not plan to redevelop it [ or undertake any alterations to it ]. Our conclusions are drawn from a review of the Landlord’s [ and Head Landlord’s ] title, the Landlord’s replies to pre‑contract enquiries, and the results of searches....

Property: [ insert name and/or address of the Property ] (‘Property’) Landlord: [ insert name, address and (if applicable) the landlord’s company registration number ] (‘Landlord’) Tenant: [ insert name, address and (if applicable) the tenant’s company registration number ] (‘Tenant’) [ Guarantor: [ insert name, address and (if applicable) the guarantor’s company registration number ] (‘Guarantor’) ] 1 Executive summary 1.1 Scope of report This report is directed to you, [ insert tenant’s name ], and is produced solely for your benefit in relation to the Landlord’s proposed grant of a lease (‘Lease’) of the Property to you. You have advised that your intended occupation is as [ insert tenant’s proposed use ], and that you do not propose to redevelop or undertake any alterations to the Property [ (save as identified in this report) ]. This document must not be shared with, or relied upon by, any other person without our prior written approval. 1.2 Areas of...

HM Land Registry Prescribed Clauses LR1. Date of this lease [ date ] LR2. Title number(s) LR2.1 Title number(s) for the Landlord [ title numbers from which this underlease is derived (but omit if the Landlord’s title is not registered) ] LR2.2 Additional title number(s) [ current title number(s) against which entries of matters mentioned in LR9, LR10, LR11 and LR13 are to be recorded ] LR3. Parties to the lease Landlord [ [ OPTION 1—Landlord’s name (not an overseas entity) ] [ of, or incorporated in, England and Wales (company registration number [ number ]) with its registered office at ] [ address ] OR [ OPTION 2—Landlord’s name (overseas entity) ] [ incorporated or formed ] in [ territory of incorporation/formation ] (registration no. [ number ]) [ and registered with Companies House (company registration no. BR[ number ]) ] (overseas entity ID [ [ number...

Section 2 of the Landlord and Tenant Act 1987 (LTA 1987) Section 2 of the Landlord and Tenant Act 1987 (LTA 1987) states that a person is the landlord if they are (a) the direct landlord of the qualifying tenants of flats in the premises, or (b) where any such tenant is a statutory tenant, the person who, but for that statutory tenancy, would have the right to possession of the flat. Consequently, the relevant landlord is usually the immediate landlord of the qualifying tenants, so a transfer of a superior interest is generally outside scope. Intermediate headleases are often used to avoid the regime. However, s 2(2) LTA 1987 provides that where the immediate landlord is also a tenant of the premises under a tenancy that is either: a term under seven years, or a term exceeding seven years, but capable of termination within the first seven years at the superior landlord’s option, the superior landlord is also treated as the...

A person with an interest in property that has been disclaimed (for instance, a sub-tenant) retains that interest on the same terms and subject to the same rights and obligations as if no disclaimer had occurred. If they carry out the tenant’s obligations under the disclaimed lease, they cannot be removed; if they do not, the landlord may distrain or forfeit—as explained by Lord Nicholls in Hindcastle Ltd v Barbara Attenborough Associates Ltd: the sub-tenant’s interest is unaffected by the determination of the tenant’s interest. Thus the sub-tenant holds the estate on identical terms, and remains subject to the same rights and obligations, as would apply if the tenant’s interest had continued. If they pay the rent and perform the tenant covenants in the disclaimed lease, the landlord cannot evict them. If they fail to do so, the landlord may distrain upon their goods for the rent reserved by the disclaimed lease or commence forfeiture proceedings...

It is quite usual, in many cases, for an intermediary landlord to sit between the occupational long-leasehold tenants of a block of flats and the freeholder. The term of the intermediate lease is longer, although often only a little longer, than the duration of the occupational long leases (flat leases) for the individual flats. The typical set-up is a freeholder at the top, then a head tenant, frequently a management company, for the whole block, and beneath that the individual flat leases...