Commercial Lease -
Lease extension
If there is an
existing lease which is coming to an end then the parties may wish to continue
that arrangement for a further period. One simple way of doing this is to
grant a lease extension by reference to the terms of the exiting lease i.e.
just continue the same arrangement for a further period - perhaps at a
reviewed rent.
The main advantage of
this is that if the parties are happy with the terms of the existing arrangement
then these can be continued and there is no long lease document to negotiate.
This saves both cost and time.
On the downside this means
that the parties miss the opportunity to update the lease if there have been changes
in the law or drafting styles. You also have to be careful over repairing
obligations and alterations that may have been made to the premises during the
course of the previous lease. It is best to state in the lease extension how
these are to be dealt with. If the repairing and decorating obligations in the
first lease referred to the condition of the property at the date of the lease
then take care as the new lease extension will work from the date of that new
lease unless you expressly make reference to something different. Take care if
the existing lease is one which has been excluded from
security
of tenure - if this is so then the new lease will not be so excluded
unless the necessary formalities are dealt with - see
Reform of Business tenancies
for more information.
The
document will download as a Zip file. Once downloaded it will unzip to a Word
document
|
Lease extension |
£20
|
|
|
Lease extension excluding security of
tenure |
£25 |
|
The tenant will need to consider the
impact of Stamp Duty Land Tax - in just the same way as the grant of a new
lease - see
Stamp Duty Land Tax SDLT. If the
previous lease was granted on or after 1st December 2003 (when Stamp Duty Land
Tax was introduced) then the term and rent of that previous lease will be
taken into account
The
documents downloaded from this web site will be in the form of a Zip file. Once downloaded it will unzip to a Word
document. You will need a zip utility to unzip the document - Windows XP
contains a built in utility. Alternatively shareware versions suitable for
unzipping a file can be obtained from the Internet - for example, click the Winzip
button at the side of this page.
The
documents available on this site have been prepared for use in England &
Wales. They may not be valid if used in other areas.
