Reversionary 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 outlines the prerequisites that must be met for the court to find a transaction occurred at an undervalue and to order suitable relief...

This Checklist is intended for situations where: a leasehold property is being purchased and the tenant (or a predecessor in title) entered into an agreement for lease prior to completion of the lease; or a reversionary interest is being bought and the reversioner (or a predecessor in title) entered into an agreement for lease before completion of an existing occupational lease, or an agreement for lease remains in place pending completion of a lease. In each case, the agreement for lease predates completion of the relevant lease. You should confirm whether any outstanding or continuing obligations in the agreement for lease (eg to rectify defects or undertake works) will bind the purchaser. Any surviving obligations that bind successors in title could adversely affect the property’s investment value. Note that this Checklist is not comprehensive and, depending on the nature of the transaction, other issues may arise from the agreement for lease and require consideration. This Checklist also does not address limitation periods...

This Practice Note sets out what is meant by a ‘lease re-gear’, identifies typical catalysts for re-gears and the commercial motivations for both landlords and tenants. It also highlights examples of lease provisions commonly revisited on a re-gear and outlines how a re-gear might be structured. What is a lease re-gear? A ‘lease re-gear’ is a commercial label for renegotiating the terms of a lease during its term. While the phrases ‘lease variation’ and ‘lease re-gear’ are often treated as equivalent, a re-gear does not necessarily include a formal lease variation. A formal variation is only one method to achieve a re-gear, and additional transactions are frequently required to give effect to the new commercial understanding between landlord and tenant. Depending on the agreed position, a re-gear can involve: a deed of variation a surrender and re-grant (for example, surrender of the existing lease by deed or by operation of law and the grant of a new lease on the revised terms) the...

A split reversion, sometimes termed a severed reversion, arises where the reversionary interest in one segment of a leasehold estate is vested in one reversioner, while the reversion to the remaining part is vested in another reversioner. The presence of a split reversion may create several difficulties in relation to: apportionment of rent (see Apportionment of rent and deeds of apportionment below) compliance with the landlord covenants in the lease (see Compliance with landlord covenants below) a buyer’s indemnity covenant (see Buyer’s indemnity covenant below) business tenancies (see Tenancies under Part II of the Landlord and Tenant Act 1954 below) forfeiture and notices to quit (see Forfeiture and notices to quit below) surrender (see Surrender below) Examples of split reversions Two or more landlords owning separate parts of the reversion This can occur where two or more landlords, each owning different properties, come together to grant a single lease of all or part of those properties to...

A ‘lease by reference’ is a word-saving device Before word processors, leases were drafted by hand or produced on typewriters. That process was slow and demanded significant effort from all involved. A lease by reference brings across the provisions contained in an earlier (or historic) lease, removing the need to set them out again in the new lease instrument. This method is widely regarded as a practical way to cut time and cost on a commercial lease deal, by allowing parties to readily adopt previously agreed terms. As a result, it is typically used to record renewal, reversionary or supplemental leasing transactions in such contexts. Still, a negotiated lease reflects a moment in time and a particular commercial arrangement. Other than in the most straightforward situations, carefully preparing and negotiating a lease by reference can be complex, with traps for the unwary. This Practice Note provides practical, accessible guidance on drafting and negotiating a lease by reference in a commercial context. It sets out when a lease by reference...

Under the Leasehold Reform, Housing and Urban Development Act 1993 and Leasehold Reform (Collective Enfranchisement and Lease Renewal) Regulations 1993 (SI 1993/2407), Schedule 2, paragraph 5(2). TENANT’S NOTICE REQUIRING DEDUCTION OF TITLE BY LANDLORD Concerning the dwelling identified as [ insert address of tenant’s property ] (‘the Flat’) To [ insert competent landlord's name ] [ of OR incorporated in England and Wales with company registration number [ insert company registration number ] whose registered...

HM Land Registry Prescribed Clauses LR1. Lease date [ date ] LR2. Title number(s) LR2.1 Landlord’s title number(s) [ title numbers from which this Lease is granted. Leave blank if unregistered ] LR2.2 Other title numbers [ any existing title number(s) against which entries relating to LR9, LR10, LR11 and LR13 are to be recorded ] LR3. Parties to this Lease Landlord [ name of Landlord ] [ of OR a company incorporated in England and Wales with company registration number [ number ] whose registered office is at ] [ address ] Tenant [ name of Tenant ] [ of OR a company incorporated in England and Wales with company registration number [ number ] whose registered office is at ] [ address ] Other parties [ Guarantor [ name of Guarantor ] [ of OR a company incorporated in England and Wales with company...