This article first appeared in NewsBrief, Winter 2004/05
It is not infrequently that a Landlord and a Tenant wish to either extend the Lease term or to add to the land demised to the Tenant – for example to add an extra floor in the case of a multi-let building.
Great care needs to be taken and advice sought to avoid the spectre of surrender and re-grant being implied.
The danger for the Tenant is one of Stamp Duty Land Tax – without due care being taken the Tenant could end up having to pay SDLT as well as the Stamp Duty he has already paid.
The traps for the Landlord could include taking away the contracted out status of a Lease and replacing it with a tenancy protected under the Landlord and Tenant Act 1954. It can also have the effect of removing original tenant liability which still subsists on leases granted before 1996 and replacing that with automatic tenant releases on assignment.
Surrender and re-grant can have its place – the trick is to ensure this is something chosen and not imposed against the parties' will.
