Should the parties to a lease be concerned about an implied surrender and re-grant of the lease if they are negotiating a deed of variation to grant new easements?
Most tenants will wish to avoid a surrender and re-grant of their lease. An unintended surrender and re-grant may have costly SDLT and land registration consequences.
Landlords are similarly wise to be cautious. Implied surrender and re-grant could confer undesirable rights on the tenant. Notably, the re-grant of a Landlord and Tenant Act 1954 excluded business lease will mean that the lease is no longer excluded, thus conferring statutory renewal rights.
Should the parties be concerned? In Stevens v Ismail [2016] UKUT 43 (LC) the Upper Tribunal (Lands Chamber) thought not.
In that case a question arose as to whether a long residential lease had been impliedly surrendered and re-granted in 1998 when the parties completed a deed of variation. The deed added a new right for the tenant to park a private vehicle on the area edged blue on a new lease plan, and substituted that plan for the original lease plan.
Had the parties increased the demise? The Tribunal held not. The purpose of the deed of variation was simply to grant a new easement.
Purists might argue that since a demise includes appurtenant rights, grant of a new easement necessarily increases the demise. If this is the case, there would be an implied surrender and re-grant. However, the Tribunal did not deviate from the established principle that surrender and re-grant only follows where there is either an increase in the length of the term or the premises demised.
When considering grant of additional easements this, then, is one thing that should not worry landlords or tenants.
Our content explained
Every piece of content we create is correct on the date it’s published but please don’t rely on it as legal advice. If you’d like to speak to us about your own legal requirements, please contact one of our expert lawyers.