Getting lease plans wrong can have serious consequences, especially if you intended to demise more than is mistakenly shown on the plan. In those circumstances a deed of variation to remedy the original error would take effect as a surrender of the existing lease and a re-grant of the enlarged demise.

A surrender and re-grant could mean:

  • The re-granted lease will not be contracted out of the Landlord and Tenant Act 1954, irrespective of whether the original lease was, and could therefore unintentionally give the tenant security of tenure;

  • The surrender will release the liability of any former tenants and guarantors under the original lease (whether such rights accrued by virtue of an authorised guarantee or privity of contract);

  • Any necessary consents from a mortgagee or superior landlord will not have been obtained for the re-granted lease; and

  • SDLT implications for your tenant, which may impact on their negotiating stance on other elements of the transaction.

However, there are alternative courses of action available, such as granting a new supplemental lease of the additional land, most often on identical terms to the original lease, allowing the original lease to remain intact.

This is why it is important to get the plan prepared well ahead of completion of the lease, and double check it covers the full area required.