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 existing 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 though, 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 need 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 – see Useful links. 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 in Useful links for more information.

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 Useful links. 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.

Useful Links
UnZip UnZip
Documents will download as zipped files and will unzip to Word documents.
You will need a zip utility to unzip the document - Windows XP and above contain a built in utility.
WinZip WinZip
World Pay
Maestro MasterCard Visa Visa Debit Visa Electron
The documents available on this site have been prepared for use in England & Wales. They may not be valid if used in other areas.